Kune Foods Collapses

News & Politics
21

Not sure he was out to scam. He is part of a group of professional entrepreneurs. He is not a entrepreneur at heart but seeks to make a living as such. There’s a group of them from Scandinavian countries , Norway , Sweden… as well as UK and Germany. They form start ups from any conceivable opportunity. Out of every 5, one may hit it big. And because they have a resume, it’s easier for them to draw venture capitalists. They target 3rd world countries in Asia, Africa and South America.

Problem with his business model is that he didn’t take time to understand Kenyan spending culture. So you can’t jump with a blueprint from Thailand and throw it in Kenya. The supply chain in those countries is refined. For example you will find street vendors selling a common product eg Githeri. But they all buy that ready-made githeri from a common supplier. Because it’s cheaper to prepare when made in bulk. But who cares anyway, there are financiers ready to throw in hard cash.

22

Someone was asking the same question
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23

It was a scam from the get go, wanted to compete na “shiro machapo” wa kibanda.
How the scam works is corporate spends a huge chunk of the capital raised on salaries, office space, travel… Peanuts is spent on the actual biz. And having a failed biz under your belt is not bad for your CV!

24

Agreed.

The concept was rock solid but execution and pricing was way off.

Hii market ni ya Ugali-Managu or Chapo-Madondo at sh70-100. Huku you don’t package Croissants, sijui pasta, sijui salads at sh400… That is gibberish for mtu wa mjengo na mama wa salon who will of course also snub your prices and that’s where the mass market is in this poor economy.

For 100 bob meals, you will have razor thin margins per sale but once you get the critical mass and you have the economies of scale and first mover advantage offered by your platform, you will take off.

The investor who succeeds in Kenya is one who understands the needs of the very common mwananchi and tailors an exact product or service to match them in a way that’s quickly understood and taken up by the common bonobo.

There will be another player succeeding in this foodtech space, following this exact advice. Mark this post.

25

Ni msee wa rugby?

26

Uende kwa vending machine, put 500 halafu iteme spaghetti bolognaise? Don’t see that working here… Most Kenyans want to know if there’s something with the food, utaita waiter and point it out. An example would be this company that does school feeding programs, they have a centralized kitchen in Ruiru and in Coast, then they distribute food… The one Sakaja and Ruto used for school feeding PR. They’ve mechanized some aspects of food preparation for consistency and cost cutting, they have school kids who form a sizeable chunk then parents, schools pay them to deliver food to their kids…and also those who work around the towns they operate in. They can afford cheap food as they already have some level of scale . And also the market segment they’re serving will not demand the sophistication,taste, presentation that me and you will expect, hence further reduction in cost. It’s kibanda type of food at scale. You don’t take fancy fancy standards to kibanda.

27

Savage! :D:D:D

28

https://pbs.twimg.com/media/FV4InSJXoAAqj21?format=jpg&name=large

29

Kuna ka local huwa naingia naona vile watu hujaa na ni mandazi choma, githeri, mboga kienyeji, mseto nk yaani hiyo ka small hotel haina kitu imepita 50bob, small qty though but no one is complaining. Hii si uchumi ya kushiba ni ya kushikilia tumbo

30

hawa ni part of the so called serial entrepreneurs, as mentioned above they try many business idea, they are not afraid to throw money at what might seem petty to most, they learn from it, they document the whole thing so even the investors get to learn from that. Wakiona its not working hakuna delay, they close shop and go looking for the next thing.
I think their mantra is failure in the mundane things breeds possible success in future. Lakini kenyans deride failure, they would all have cheered if that 1m was used to buy land somewhere ajenge nyumba za rentals.
All the stories naona ati solving problems, ati kutafuta market gaps, problem statements - solving problems achia ngo’s and charities and problem statements achia mba’s - an entrepreneur objective is to make money, whether they are solving a problem or not.

31

[SIZE=7]Raising Funds isn’t Sufficient, Lessons from Kune’s Untimely shut down[/SIZE]

What could have gone wrong, a year after raising a $1 million pre-seed funding?

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Robin admitted on his page that many could have been done differently, “The coming months will allow us to reflect on Kune’s failure, and I hope to share about it when the time will be right.”

However, beyond Robin’s reflection, Some Kenyans have complained that the startup was an unnecessary food delivery platform in the country.

In an article shared by Quartz Africa in June 2021, Kenyans had said that the solution to the challenge Robin had spotted in Kenya’s food delivery is non-existent and it was only Robin’s white privilege that got him the $1 million funding. :D:D

Why did he get so much backlash?
Robin in an interview with Techcrunch had mentioned how challenging it was to get both cheap and quality food in Kenya, after spending 3 days.
One may encounter a variety of issues while building a startup that either directly or indirectly influence the entire company.

From the backdrop of Kune’s shutting down, this article explores some challenges food tech startups tend to encounter

Lack of funds
Startups in the food-tech industry need a lot of money to get off the ground. Lack of f funds is a severe issue because it makes it impossible to satisfy client demands. The majority of companies are one- or two-man bands driven by enthusiasm, yet they fail for a lack of resources (money and labor).
Therefore, having enough finance is crucial, and acquiring money from investors who are interested in other tech ecosystems is challenging given how competitive the food-tech industry is in Africa.

But was funding Kune’s challenge? Probably not, They raised money, and sold food to both individuals and corporates, however, the meal charge couldn’t sustain Kune’s growth.

Competitive Environment
Startups are comparable to a child in a large market, due to competitors having been in the market longer and are more familiar with it, they must deal with competition as a significant obstacle.
Food tech startups must always exercise caution and stay one step ahead of the competition to gain the attention they need to survive.
Therefore, remember that issues exist everywhere, but only those who are able to manage them and develop solutions can achieve lasting success.
As the saying goes, if things are failing, you’re not innovating enough. Since the market is cutthroat, new innovations must be introduced to stay relevant and provide the greatest possible client experience.

There were lots of local food delivery platforms offering what Kune was doing. What was kune doing differently?

Special deals and offers
Customers respond quickly to discounts and incentives. Customers no longer buy unless they are receiving a great price because of changes in the culture of purchasing.
However, for a startup, this is not sustainable, therefore, it is challenging for startups to offer discounts and operate on low-profit margins.
Customers are continuously looking for a food tech startup with either free delivery or a discount on the purchase price, even though it is not advisable to offer discounts all the time.
As stated by Robin, the $3 offering price for Kune, was already unsustainable, from all indications, the startup couldn’t afford to offer special deals and offers.

Variable profit margins
There is fierce competition on the market, as numerous producers battle with one another to draw in clients and increase profits. As a result, many businesses sacrifice quality for low-profit margins.
Maintaining quality while competing on pricing is a difficult task for entrepreneurs. Additionally, this puts food-tech in a challenging position where they must decide whether to offer clients a good quality for a high price or low quality for a low price.
Robin admitted that the rising food costs had deteriorated Kune’s margins, thus it couldn’t keep going.

Technology
Technology is advancing rapidly right now. As more and more people become digitally savvy and educated, those who use food tech do not want to struggle to place their orders; as a result, food tech with decent technology is likely to quickly lose clients.
To better serve their clients, food technology businesses must ensure that their technology is improved and most especially their delivery time.

Bottom line
Robin had also stated that, with the current economic downturn and investment markets tightening up, Kune couldn’t raise its next round. Robin had tendered his apologies to his team, fellow entrepreneurs, kune’s investors and its partners.
Beyond this, we hope that upcoming startups would learn that sustainability goes beyond raising funds. After you have acquired customers, can you make sales and acquire a reasonable profit margin?

https://techbuild.africa/raising-funds-sufficient-lessons-kunes-shut-down/

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32

@Mangele, this was a conman. his financiers are panzies.

33

People who know nothing about business should shut their mouths please. Go fuck yourself with your rock solid.
Why dont YOU start a rock solid business we all learn from you?

34

Umeambiwa uko soft juu ya kuenda app ya mangeus

35

Dude doing the bare minimum and still failing. When a biz is failing, you can feel it months in advance and brace up. I’m seeing “impromptu” meeting for a dismissal, and not for a salvaging plan.

CON

36

Ooh no. TikTok is no longer an app for softies