After launching barely a year ago in Kenya, food-tech startup Kune Food has decided to wind up its operation. The startup is the most recent in the line of food tech start-ups to exit the industry and roll back operations as funding becomes more scarce.
Shutting Down Kune Food As Investment Tightens Up
The startup’s founder and CEO, Robin Reecht, in a LinkedIn post on Wednesday, said, “Sad day. Kune Food closed down today. With the current economic downturn and investment markets tightening up, we were unable to raise our next round. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going.”
Kune Food secured $1 million in pre-seed funding in 2021 and took up an undisclosed loan from a Kenyan bank. Century Oak Capital GmbH, Consonance, and the pan-African venture capital firm Launch Africa Ventures all participated in the pre-seed funding.
Kune Food Was Before Closure
With the promise of producing and delivering freshly made meals to online customers at affordable prices, the startup started operations as an online restaurant or internet-based kitchen. However, the startup switched to utilizing apps like Uber Eats, Glovo, and Bolt Food to fulfill their orders after an unsuccessful attempt to raise fresh capital ($3.5 million) to survive in a cutthroat market.
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According to Reecht’s LinkedIn post, Kune Food sold more than 55,000 meals last year and added more than 6,000 individual and 100 corporate customers. But at $3 per meal, it was simply insufficient to sustain our growth. Many things could have been done differently, and undoubtedly better. We will have time to consider Kune’s failure in the coming month, and I intend to talk about it when the time is appropriate.
The Founder’s Dilemma
Kune’s take-off was shaky, with founder Reecht irking Kenyans with remarks indicating that he launched the startup after failing to get affordable ready-to-eat meals in the country.
His remarks drew quick criticism, and many Kenyans took to online forums to highlight the various restaurants offering inexpensive meals all through the country. Kune apologized and expressed regret for the way the message was received.
Kune hoped to boost production capacity and increase its operations prior to the indefinite closure of its operations. By 2024, a countrywide footprint was the goal.
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In a previous statement, the firm claimed that it has made substantial investments in research and development to have a “fully devoted in-house team working regularly on menu advancement so as to fulfill the changing wants of customers while also bridging the nutrition and price gap.” In order to be closer to its target client, it had also established hubs across Nairobi.
In 2021, VCs made big investments in logistics and health tech companies. However, many people have had trouble getting funding after the Series A round. Both sectors, which were estimated to overtake Fintech as Africa’s next big thing, are now seen as victims of their own success.
