Y Combinator-backed Nigerian food protreatmentment commenceup Vfinishrelieve has alterd its engageee pay structure and is seeking new capital, TechCrunch has lobtained.
This is after laying off 44% of its laborforce — around 120 engageees —last month, taging its second round of job cuts in five months. In the postponecessitatest enhugement, the commenceup has now replaced engageees’ traditional salaries with a carry outance-based pay system, supplemented by an Equity Share Option Plan (ESOP), according to inner write downs seen by TechCrunch.
The five-year-elderly commenceup, which liftd $30 million in its Series A round led by Partech Africa and TLcom Capital, shelp the restructuring was essential to guide to profitability.
Vfinishrelieve’s novel compensation model grasps a five-phase salary recovery structure, the write downs say.
In February, all engageees getd a ₦140,000 (~$90) salary, watchless of previous pay. From March to May, the company will lift engageees’ wages to 30% of establisher levels if they greet carry outance aims, though it hasn’t specified these aims, the write downs say.
Compensation will incrrelieve to 60% of establisher salaries from June to August and 90% from September to November, with brimming salary restoration foreseeed by December aobtain contingent on company and engageee carry outance goals.
The unphelp portions of the salaries will alter into allot selections under the ESOP, with 50% vesting over ten months and the rest over three years. But engageees can only exercise these selections at a board-finishorsed fair taget cherish, according to the engageee concurment.
The company validateed the alters to engageee pay insisting that it is now at a fracture even point, even shut to profitability.
“Vfinishrelieve has restructured both its business and operations. We’re a gentleware company, and we want to cgo in on facilitating OPEX-weighty operations with technology rather than handling them ourselves,” a company spokesperson telderly TechCrunch.
It says the alters are intfinished to help engageee productivity while the company prolongs more financipartner supportable. “We only spfinish what we obtain, which conserves us reliablely at fracture-even and cgo ined on profitability,” the spokesperson inserted.
With sweightlessly over 150 engageees left, Vfinishrelieve is betting on inner restructuring, new capital, and AI-driven efficiency to cut costs and support operations. As the company points out, this also uncomfervents cgo ining more on gentleware-driven prolongth and doubling down on its sales and payments solutions and commend tagetplace while gradupartner phasing out warehousing and logistics operations.
Betting on BNPL to stay afloat
Founded in 2019 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, Vfinishrelieve set out to streamline food protreatmentment for African restaurants and food businesses.
The commenceup claimed it could reshift inefficiencies in the food supply chain, which cost businesses billions annupartner. By 2022, it had shiftd 400,000 metric tonnes of food for over 2,000 customers, it shelp, saving them $2 million in protreatmentment costs and cutting wastage-rhappy losses by cforfeitly $500,000 in Nigeria, its main taget.
But the last two years have been brutal for Vfinishrelieve and many Nigerian commenceups without FX-denominated revenue. Since its Series A in September 2022, its revenue in Nigeria’s naira has tripled, but the currency’s keen depreciation wiskinny the last three years has wiped out those obtains in dollar terms. Inflation has further incrrelieved opereasoned costs, squeezing profitability for the capital- and people-intensive business.
One of Vfinishrelieve’s main revenue drivers wiskinny the past year has been its buy now, pay postponecessitater (BNPL) product. Traditional lfinishers standardly elude food businesses due to their volatility and fragmentation. But Vfinishrelieve leverages its supply chain comprehendledge to underwrite loans via its tagetplace, which combines financial institutions with food businesses.
The company claims a default rate of under 1% over the last two years and has rehired over $70 million in commend as of September 2024.
When CFO Mohamed Chauparched combinecessitate in January 2024, he helped rerepair BNPL as a key path to profitability. However, despite some recent tfrails, the commend product alone doesn’t seem to be enough to get Vfinishrelieve there.
His nominatement also set off the ongoing restructuring to firmen financial deal withs and extfinish its cash runway, which, according to sources, may only last a restricted more months.
As such, the company is in talks with existing and novel spendors to lift a bridge round, money it will engage to fund technology prolongth and expansion rather than opereasoned expenses.
Meanwhile, sources also say Vfinishrelieve has scrutinized a potential sale to other perestablishers in the HORECA (Hotels, Restaurants, and Catering) and FMCG sectors.
The company, however, disputes this and insists it’s the other way around. “It’s standard to get approached for M&A, especipartner when you’re a rapid-prolonging business operating in a distinct space appreciate food. Yes, Vfinishrelieve has been approached, but the set upers are cgo ined on scaling, not selling anytime soon,” shelp a spokesperson.
