iProcure Faces Administration Despite $17.2 Million Funding. This Kenyan agritech company that helps to connect agricultural product distributors to manufacturers has now been placed under administration since April 26, 2024, following the failure to pay creditors.
iProcure Faces Administration
Following financial distress, Kenyan agritech startup iProcure has been placed under administration, with KPMG’s advisory arm tasked with reviving the company. If efforts to revive iProcure fail, liquidation will be considered as a final option to settle debts owed to creditors.
Makenzi Muthusi from KPMG Advisory Services has been appointed to lead iProcure indefinitely, managing all aspects of the company’s affairs, including properties, operations, and handling creditors’ claims.
Claims Submission Deadline
Creditors of iProcure are required to submit their claims in writing, along with relevant documentation, to the Administrator by May 14, 2024, for consideration.
Former Directors’ Authority
The former directors of iProcure will no longer have any power or authority to handle matters concerning the company, as stated in the notice released by KPMG.
Background of iProcure
Founded in 2013 by Stefano Carcoforo, Nicole Galletta, Patrick Wanjohi, and Bernard Maingi, iProcure aimed to connect suppliers and retailers in the agricultural sector to facilitate the distribution of inputs like fertilizers.
Additionally, the Nairobi-based firm provided inventory management and credit facility services to all players in the agricultural value chain.
Fundraising Efforts
Since its inception, iProcure raised $17.2 million from investors in five funding rounds to enhance its services and expand across East African markets. Notably, the startup secured $10.2 million in Series B funding and conventional debt in August 2022 to expand to Tanzania.
In March 2023, it received $1.2 million from the United States Agency for International Development (USAID) to support food production in Kenya.
Challenges Faced
Despite significant fundraising, iProcure faced challenges, including cash flow issues and a high burn rate, according to a former employee. The exact amount owed to creditors and the reasons behind the company’s financial struggles remain unclear.
Management Change
In a bid to secure the company’s future, iProcure appointed Niraj Varia as Group CEO in 2022. However, Varia left the company in 2023 and stated that he had no additional information beyond what is publicly available.
Current Status
iProcure has yet to address the situation publicly, while the court-approved administrator, Muthusi, has commented on the new development.
Conclusion
The placement of iProcure under administration reflects the challenges faced by the agritech startup despite its significant fundraising efforts.
With the appointment of an administrator, efforts are underway to revive the company and settle outstanding debts, highlighting the complexities of navigating the startup landscape in East Africa’s agricultural sector.
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