Vendease’s Revival Plan – Can A Performance-Based Pay System Save the Startup?

Vendease, a Nigerian food procurement startup, is shaking up its business model with a drastic move—switching to a performance-based pay system after laying off 44% of its workforce. This unconventional strategy is designed to keep the business afloat while pursuing profitability, but it also raises critical questions about employee motivation, financial stability, and the future of food-tech startups in Africa.

The Pay Shift: Risk or Reward?

Under the new system, employees receive a base salary of ₦140,000 (~$90), with additional earnings tied to performance metrics—which have yet to be fully defined. The company plans to restore full salaries by December, but only if financial targets are met. Any unpaid portions of salaries will be converted into equity shares, a move that ties employees’ earnings directly to the company’s success.

While equity-based compensation is common in Silicon Valley, it’s a rarity in Africa’s startup ecosystem, where cash flow challenges and economic uncertainties make stable salaries a necessity. For employees, this could be an opportunity to own a stake in the company’s growth—or a high-risk gamble with unpredictable returns.

The BNPL Bet: Can Credit Fuel Growth?

One of Vendease’s biggest plays is its Buy Now, Pay Later (BNPL) offering for food businesses, a sector often deemed too risky for traditional lenders. The startup claims a default rate of under 1% and has already disbursed over $70 million in credit. However, despite its success, BNPL alone hasn’t been enough to fully turn the company’s finances around.

To sustain operations, Vendease is now exploring a bridge funding round while rumors swirl about a potential acquisition. The company insists it is not looking to sell, but with Nigeria’s volatile economy and currency fluctuations, it remains to be seen whether this bold restructuring move will pay off—or push the company closer to the edge.

What This Means for African Startups

Vendease’s shift to performance-based pay reflects broader challenges facing African startups:

• Profitability pressure: Investors are increasingly demanding financial discipline over rapid expansion.
• Economic turbulence: The Naira’s depreciation and rising operational costs make fixed salaries harder to sustain.
• New funding realities: With fewer VC deals in 2025, startups must find innovative ways to cut costs and drive revenue.

As Vendease navigates this transition, the big question remains: Can this bold experiment in compensation create a leaner, more resilient startup—or will it backfire, driving away top talent? Either way, its success or failure could set a precedent for how African startups rethink payroll and profitability in an uncertain market.