Nigerian food procurement startup Vendease, backed by Y Combinator, has introduced a sweeping overhaul to its compensation structure and is actively seeking new funding, following the layoff of 44% of its workforce — approximately 120 employees — last month.
This marks the company’s second round of job cuts in five months.
According to internal documents obtained by TechCrunch, the 5-year-old startup has now replaced traditional salaries with a performance-based compensation model backed by an Equity Share Option Plan (ESOP). The changes come as Vendease attempts to pivot toward profitability and reduce its operational expenses.
Under the new plan, employees were paid $90 across the board in February, regardless of their previous salaries. From March to May, workers can earn 30% of their former wages, but only if they hit unspecified performance targets.
The phased pay restoration plan looks like this:
- June–August: 60% of former salaries (if targets are met)
- September–November: 90%
- By December: Full salaries could be restored — contingent on both individual and company performance.
The unpaid salary portions will be converted into stock options, with 50% vesting over 10 months and the remaining 50% over three years. However, these options can only be exercised at a board-approved fair market value.
In response to enquiries, the company confirmed the new pay structure and emphasised that it is currently operating at break-even.
“Vendease has restructured both its business and operations. We only spend what we earn, which keeps us consistently at break-even and focused on profitability,” a spokesperson said.
With just over 150 employees remaining, Vendease is focusing its efforts on becoming a lean, software-driven enterprise. That means pulling back from warehousing and logistics and doubling down on:
- Sales and payments platforms
- Buy Now, Pay Later (BNPL) services
- AI-powered operational efficiency
Vendease, founded in 2019 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, aims to modernise food supply chains across Africa. The startup claimed to have moved 400,000 metric tonnes of food for over 2,000 businesses by 2022, saving customers around $2 million in procurement costs and reducing waste losses by nearly $500,000.
But the past two years have been rough for many Nigerian startups — especially those without dollar-denominated revenue. Despite Vendease tripling its revenue in local currency since its $30 million Series A in 2022, a sharp depreciation of the naira has eroded those gains in dollar terms.
Since 2022, the Nigerian naira has lost more than 60% of its value against the U.S. dollar, while inflation continues to drive up operating costs. For a people- and capital-intensive business like Vendease, the effect has been significant.
The company’s BNPL product — which helps food businesses access credit through Vendease’s marketplace — has been a bright spot. Vendease claims a default rate below 1% over the last two years and has issued over $70 million in credit as of September 2024.
However, profitability remains elusive, prompting the appointment of CFO Mohamed Chaudry in January 2024 to tighten financial controls and optimise the business. Insiders say that despite progress, the company’s cash runway could run dry within months, fuelling its current efforts to raise a bridge round to fund technology growth.
Reports have also surfaced of Vendease exploring a possible sale to other players in the HORECA (hotels, restaurants, and catering) and FMCG sectors. But the company denies this, claiming that it has only received interest, not initiated any such conversations.
“It’s normal to get approached for M&A when you’re growing fast in a unique space like food. But the founders are focused on scaling — not selling,” said the company spokesperson.
