Kune Food shuts down in Kenya citing funding inabilities and rising food costs

Barely a year after starting operations in Kenya, Kune Food has closed shop affecting over 90 employees.

The startup, which was created in December 2020 to provide ready-to-eat inexpensive meals, completed a trial in Kenya in early 2021 before formally launching later in the year.

Recently, concerns were expressed about the startup’s decision to employ other aggregators despite professing to dominate the whole supply chain. Despite this, the CEO of Kune Food, Robin Reecht, told The Netick they had reached a sufficient scale and were focused to keep providing affordable meals, which was their core business.

Robin Reecht, announced the closure in a LinkedIn post after failing to raise funding to continue operations, blaming the high costs of food prices in the country.

Kune Food raised $1 million in pre-seed funding a year ago and borrowed an undisclosed amount from a Kenyan bank. Earlier this year, the startup announced that it had plans to raise $3.5 million from local and foreign investors to expand its manufacturing capacity.

“Since the beginning of the year, we sold more than 55,000 meals, acquired more than 6,000 individual customers and 100 corporate customers. But at $3 per meal, it just wasn’t enough to sustain our growth. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going,” he wrote.

Kune’s beginnings were fraught with controversy, as most people assumed they were attempting to tackle a non-existent problem.

Kune had hoped to enhance manufacturing capacity and expand its activities beyond Kenya’s capital, Nairobi, prior to the indefinite closure. It aimed to have a nationwide presence by 2024.

In a previous statement, the firm stated that it had substantially invested in research and development to ensure it had a completely devoted in-house staff working regularly on menu advancement so as to fulfill evolving client requests while also bridging the nutrition and price gap. It had also set up hubs throughout Nairobi to be closer to its target client.

Kune’s backers included Launch Africa Ventures, a pan-African venture capital firm that led its pre-seed round last year, Century Oak Capital GmbH, and Consonance.

Kune joins SafeBoda and Swvl in closing their operations in Kenya, raising concerns about the Kenyan tech startup ecosystem.

Here is Robin Reecht’s full statement;

Sad day. Kune Food closed down today.

Since the beginning of the year, we sold more than 55,000 meals, acquired more than 6,000 individual customers and 100 corporate customers. But at $3 per meal, it just wasn’t enough to sustain our growth.

With the current economic downturn and investment markets tightening up, we were unable to raise our next round. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going.

My first thoughts go to my team. You put your heart and soul into building the Kune that so many people loved. I’m deeply sorry it didn’t work out.

To all my fellow entrepreneurs, please check the Kune “employee page” on LinkedIn and see if your recruitment needs could be filled by some of our team members. I know those are difficult times for you too. But they are terrific people who will bring tremendous value to your company. You can call me if you need any reference on a Kune employee.

My second thought goes to our investors. Some of you joined the Kune journey when it was just me and a Chef, delivering food on foot to a nearby office. Some others joined later and helped us grow into a foodtech startup with a tech platform, a factory, a kitchen studio, 7 distribution hubs, 6000 customers, and a team of 90 people. Not only did you invest in Kune but you gave us your time, brain-width, connections, and emotional support. I am deeply sorry that Kune’s vision didn’t come true. To betray your confidence is something for which I will never forgive myself.

My third thought goes to suppliers, customers, bankers, and partners of any sort who supported us along our way. I’m sincerely sorry for the outcome.

Many things could have been done differently, better certainly. 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.

If you know anyone who could be interested to acquire Kune’s IP or Assets, please reach out by PM.

Sincerely yours,
Robin