Vendease’s Restructuring Deepens as Layoffs Continue Amid Profitability Push

Vendease, the Y Combinator-backed food procurement startup, has implemented another round of layoffs, marking a significant shift in its business strategy. The company is restructuring to extend its financial runway and achieve profitability, a move that comes as macroeconomic challenges weigh heavily on Nigerian startups.

The layoffs affect 120 employees, nearly half the company’s workforce, and follow an earlier reduction five months ago. Vendease’s leadership maintains that these changes are part of a phased restructuring process aimed at making the business more capital-efficient. The company is in the middle of a Series A extension round, with existing investors reportedly backing its strategic pivot.

Navigating a Tough Market with a New Business Model

Despite securing $33 million in funding since its inception, Vendease has faced mounting economic headwinds. Rising inflation and the devaluation of the naira have inflated operating costs, making it more difficult to sustain growth. The company’s revenue reportedly grew significantly in local currency, but dollar-denominated gains have remained relatively flat, complicating expansion efforts.

As part of its restructuring, Vendease is transforming its buy-now-pay-later (BNPL) offering into a revenue-generating product. Previously, the company absorbed interest costs on long-term financing for restaurant supplies, attracting customers with accessible credit. Under the new model, interest is charged daily, allowing Vendease to monetize its lending operations while maintaining its competitive edge in food procurement.

AI and Automation to Drive Efficiency

Beyond cost-cutting measures, Vendease is integrating artificial intelligence into its operations, automating key processes like demand forecasting and resource planning. While the company has not disclosed exact cost savings, it asserts that these technological advancements are improving efficiency and optimizing capital allocation.

Vendease’s restructuring reflects a broader shift in Nigeria’s startup ecosystem. Investors and founders are moving away from aggressive expansion strategies toward profitability-driven models. The company’s ability to successfully execute its pivot will likely determine its prospects for future funding rounds.

What’s Next for Vendease?

The startup remains optimistic about its path to sustainability, with leadership expressing confidence that the restructuring will position the company for long-term success. With support from investors and an ongoing push for operational efficiency, Vendease is betting on a leaner, more profitable future. However, in an increasingly challenging market, the real test will be whether these changes translate into sustained growth and financial stability.