Wasoko, the Kenyan e-commerce start-up, shut down its Zanzibar office and paused operations in Uganda and Zambia weeks before it finalises a merger with MaxAB.

It opened its Zanzibar office in 2022 as part of the Silicon Zanzibar initiative, a government-backed program to attract tech talents. Despite the closure of the Zanzibar office, Wasoko claims it will continue to serve as “private sector ambassador for the initiative.”

The company also said its Uganda and Zambia operations are “undergoing a temporary pause as opposed to a permanent closure.”

“This challenging decision was made as part of a broader company-wide restructuring to focus on the momentum we’ve built in our more mature markets,” the company told TechCabal via email.

“Unfortunately, this pause in operations necessitated a reduction in staff as well.”

The company did not disclose the number of people affected by the layoffs.

Following the 2023 merger, several high-profile executives left Waoko, including Josh Raine, one of the company’s co-founders. Sundararaman Pattabiraman and Tridiv Vasavada, who served as CFO and CTO, also left the business. Carolyne Mwaura, the head of human resources, also left the company in February 2024.

“Similar to most businesses undergoing mergers, overlaps in positions occur at every level of a company’s structure, including its executive ranks,” Wasoko said.

Apart from those executive departures, the company laid off 10% of its workforce in January due to overlapping roles in the newly combined entity.

“It is like the Kenyan team was swallowed after MaxAB’s arrival,” said an ex-employee who asked not to be named so they could speak freely. “They (Wasoko) are saying they are not moving their headquarters, but all its top leaders in Kenya have left. While they call it a merger or equals, we do not see where the equals are.”

“Both companies have been required to make similar adjustments as a result of this merger-of-equals. This has not been an easy process given many staff on both sides have been affected,” Wasoko said, disputing that ex-employee’s version of events.

Nine former employees have sued the company and allege that their exit packages were not satisfactory.

“Wasoko gave us the bare minimum according to Kenyan labour laws and the process was rushed in a bid to close the merger deal,” another ex-employee said.

Since its launch in 2013, Wasoko has secured $152 million across multiple financing rounds. After its initial funding round in 2015, Wasoko raised $125 million in a Series B round. This round saw participation from eight investors, with Tiger Global Management and Avenir Growth Capital leading the investment.

Wasoko’s head office is in Nairobi, Kenya, but it has a presence in other African countries, including Senegal and Cote d’Ivoire. The company will conclude its merger with MaxAB by the end of March 2024. The deal started as early as mid-2023 and was only revealed to employees in December of the same year. The merger also consolidated some roles that effectively put over 100 employees out of work.

Some of Wasoko’s top leaders have also left the company, including the then CFO and CTO, Sundararaman Pattabiraman and Tridiv Vasavada, respectively. The human resources head and the head of partnerships are no longer working with Wasoko. MaxAB has also taken over key departments, including finance, marketing and logistics.

Kenn Abuya Senior Reporter

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