Kenyan food delivery startup Kune shuts down after a year — Quartz Africa

Kune, a start-up that caused a stir last year for its white founder’s claim to have invented the delivery of “good food at a cheap price” in Kenya, has closed its doors. Midway through last year, the company raised $1 million in pre-seed funding to the anger of many who believed it was aiming to solve a problem that didn’t exist.

CEO Robin Reecht blamed his company’s closure on its inability to raise more money from investors due to the ongoing global recession. The company set out to break into Nairobi, Kenya’s capital, at a low-margin price of $3 per meal, while managing the value chain from preparation to on-demand delivery. It didn’t work.

“Coupled with rising food prices deteriorating our margins, we just couldn’t keep going,” Reecht said in a LinkedIn post June 22.

Startups fail all the time everywhere. Building a fast-growing business is tough. But Kune’s failure drew reactions beyond flippant shrugs or empathetic goodbye tweets.

Kune ran out of money

Reecht told employees, in a June 22 virtual meeting announcing the closure, that Kune “was completely out of money.”

This pushed back a French investor who agreed to give them 30 million shillings ($250,000). The investor had funded other Kenyan food companies whose margins were shrinking due to rising prices, said Reecht, who is French, according to an audio recording of the meeting reviewed by Quartz. The CEO’s address to employees at the meeting was first reported by Techspace.africa, a Kenyan outlet.

“I have spoken to 100 investors since the beginning of the year. I have exhausted all my options. I am no longer able to raise funds. It’s impossible,” Reecht said.

Reecht founded Kune (pronounced koo-nay) in December 2020 because he believed there was no company delivering affordable quality food in Nairobi. “It’s impossible because either you go to the street and you eat street food, which is really cheap but with not so good quality, or you order on Uber Eats, Glovo or Jumia, where you have quality but you have to pay less than $10”, he says TechCrunch nearly a year ago after Kune raised $1 million in a round led by Launch Africa Ventures.

That Reecht succumbed to yet another impossibility is a bit ironic, but perhaps validates the skepticism — and a certain rage — that greeted his comments last year (he later apologized for his choice of words.) people who led the backlash last June are back to saying “of course you failed”.

Kune could not find distressed buyer

Reecht’s statement, in which he apologizes to the 90 employees who have now lost their jobs as well as disappointed investors and banking partners, highlights Kune’s actions. They sold 55,000 meals this year and had 6,000 individuals and 100 businesses. He didn’t say how much money the company made.

The company may have been loved by some of its customers. “Kune had really good food, no lie. I enjoyed their meals,” one person said. But not being able to overcome the low food delivery margin exposed a weakness: Kune was hoping to burn cash for a while toward profitability.

Reecht may have gotten the money he needed in a different venture capital climate. As Kune divided last year, not least because Reecht was seen as another white man ousting local Kenyan founders and hadn’t run a food company, some investors believed in the opportunity of cloud kitchens in Africa.

That said, Reecht has offered to sell Kune to at least five Kenyan food companies. None would buy. “We don’t sell enough meals every day and we’re still a niche product,” Reecht said among the reasons given.

“I’m so sorry you’re all losing your jobs. I’m just really sorry,” he said.