Sh93 billion at risk as more Kenyan startups collapse under financial pressure

Twiga Foods has entered administration after attracting hundreds of millions of dollars from investors, becoming the latest high-profile Kenyan startup to run into severe financial difficulties despite years of aggressive expansion and access to international capital.

The development puts fresh focus on the challenges facing Kenya’s technology and startup ecosystem, where large funding rounds have helped companies expand rapidly but have not always translated into sustainable profitability.

Twiga Foods operated a business-to-business (B2B) marketplace that connected farmers with urban retailers. Its model was designed to shorten the food supply chain by sourcing produce directly from farmers and distributing it to small retailers, including shops and kiosks.

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The company became one of Kenya’s best-known technology ventures and attracted approximately $185.4 million (about Sh24 billion) in funding, according to data compiled by [Crunchbase]. Its investors included Creadev, a French investment firm, alongside other international development and venture capital institutions.

The latest administration has nevertheless raised questions about what happens when a heavily funded startup struggles to secure additional capital, maintain cash flow and move towards sustainable earnings.

Twiga Foods Administration Begins

Mohamed Mohamed of Maawiy Financial Advisory Limited was appointed administrator of GT Flow Limited, formerly known as Twiga Foods One Limited, effective August 17, 2026.

The appointment was made under Kenya’s insolvency framework and gives the administrator control over the company’s business, assets and affairs. The development follows years of restructuring and financial pressure surrounding Twiga Foods.

A notice published in the Kenya Gazette confirmed the administration process, while creditors were given a period within which to submit their claims.

The administration process does not automatically mean that every part of the wider Twiga Foods business has ceased operating. Its immediate purpose is to place the affected company under professional management while the administrator assesses its financial position and determines the best way forward for creditors and other stakeholders.

Twiga’s difficulties also highlight the difference between raising substantial venture capital and building a business capable of generating consistent cash flows.

Startup investors generally provide capital to companies with expectations of rapid growth. Such businesses may operate at a loss for years while they invest in technology, staff, distribution networks and customer acquisition.

That strategy can work when additional funding remains available. Problems emerge when investors become more cautious, capital becomes expensive or a company cannot demonstrate a credible path towards profitability.

Sh20 Billion-Plus Startup Funding at Risk

Twiga Foods is not an isolated case.

A [Business Daily analysis] identified 13 Kenyan ventures that have collapsed, entered administration or been wound up over the past five years after collectively raising about $717.5 million, equivalent to roughly Sh93 billion.

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The companies operated across agriculture, e-commerce, logistics, financial technology, climate technology and consumer services, demonstrating that startup failures are not confined to one particular industry.

Copia is among the notable casualties. The e-commerce company raised approximately $123 million, or Sh15.9 billion, and developed a platform through which rural consumers could order products delivered through agents.

The company struggled to secure additional financing as 2024 began. It subsequently cut more than 1,000 jobs in May 2024 and warned that it could shut down before entering administration.

Copia was backed by investors including Kenyan venture capital firm Enza Capital and UK-based Lightrock.

Another major failure is Koko Networks, a clean-cooking company that raised more than $100 million.

Koko sold subsidised bioethanol cooking stoves and fuel to households while relying partly on revenue from carbon credits to support its business model.

The company entered administration in February 2026 after facing difficulties surrounding approval to sell carbon credits. The collapse affected more than 700 direct employees as well as thousands of agents involved in its distribution network.

Koko’s investors included Microsoft’s Climate Innovation Fund and French asset manager Mirova, underlining the international profile of many investors participating in Kenya’s startup economy.

Lipa Later, a technology-based consumer credit company, was also placed under administration in March 2025 after raising about $16.6 million, equivalent to Sh2.1 billion.

The company had more than 200 employees and a network of approximately 1,000 agents. Its investors included Cauris Finance and Lateral Frontiers.

From Agritech to Logistics

Kenya’s startup failures have also affected companies operating in sectors that were once regarded as major growth opportunities.

Gro Intelligence, an agriculture and climate data company, raised about $117.7 million, or Sh15.2 billion, before shutting down its operations in June 2024.

The company used artificial intelligence, satellite imagery and predictive analytics to provide information relating to agriculture and climate risks.

Gro Intelligence had already reduced its workforce by about 60 percent in March 2024 before ultimately closing after failing to raise enough additional capital.

Agricultural technology company iProcure, which raised approximately $17.1 million, or Sh2.2 billion, was placed under administration after filing for bankruptcy in April 2024.

The company operated a B2B platform linking agricultural input suppliers with agro-dealers, targeting inefficiencies within the agricultural supply chain.

Logistics startup Sendy also shut down in 2023 after raising about $24.7 million, equivalent to Sh3.2 billion. The company operated an application connecting delivery drivers with customers and counted Toyota Tsusho Corporation among its investors.

More than 200 employees were affected when the company closed after running out of money and failing to find a buyer.

MarketForce, another B2B e-commerce company, raised approximately $84.1 million, or Sh10.9 billion, before winding up in April 2024.

The platform allowed informal retailers to order fast-moving consumer goods directly from distributors and manufacturers. Its investors included V8 Capital Partners.

The collapse of these companies illustrates how similar business models can face different versions of the same challenge: achieving sufficient scale while keeping operating costs under control.

Mobius, Wefarm Among Other Casualties

The difficulties have extended beyond technology platforms.

Mobius Motors, a Kenyan vehicle manufacturer that sought to build affordable and rugged SUVs for African roads, shut down operations in August 2024 amid mounting debts and a tax dispute.

The company had raised about $56 million, equivalent to Sh7.3 billion, from investors including Kepple Africa Ventures.

Earlier financial records showed the company had accumulated significant liabilities, including debt of about Sh649.2 million by August 2020 and a shareholders’ deficit of approximately Sh389.1 million.

Mobius was subsequently acquired through a bankruptcy process in 2025 by Silver Box, a Middle Eastern firm.

Wefarm, a digital farmer-to-farmer network that allowed users to exchange agricultural information through SMS, raised about $32 million before shutting down in 2022.

The company cited difficult market conditions and challenges associated with scaling its operations.

Other smaller ventures have suffered similar outcomes.

Kune Foods, a ready-to-eat meals startup, shut down in June 2022 after raising approximately $1 million. E-commerce company Zumi closed in March 2023 after raising a similar amount, while Notify Logistics shut down in August 2022 after raising approximately $374,000.

Kenya Still Attracts Major Startup Investments

The string of failures comes against the backdrop of strong investor interest in Kenya.

Kenyan startups raised approximately $984 million, or Sh126.9 billion, in 2025, according to data from Africa: The Big Deal. That made Kenya Africa’s leading destination for startup funding during the year.

The figure represented a significant increase from the $638 million raised in 2024.

However, the composition of that funding is important. Much of the 2025 capital came through large debt and equity transactions, with energy-focused companies accounting for several major deals.

The numbers therefore demonstrate that investors have not abandoned Kenya’s startup ecosystem. Instead, they indicate that capital is increasingly being directed towards businesses and sectors where investors see clearer opportunities for growth, cash generation or strategic impact.

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For founders, the changing funding environment means that fundraising alone is becoming a less reliable measure of business health.

A startup can attract tens or hundreds of millions of dollars and still face difficulties if its costs grow faster than revenues, customer acquisition remains expensive or its business model depends heavily on continuous external financing.

What Twiga Foods Means for Kenya’s Startup Market

Twiga Foods’ administration is therefore significant beyond the company itself.

Its rise demonstrated the appeal of using technology to address inefficiencies in Kenya’s fragmented food distribution system. Its difficulties now illustrate the risks involved when rapid expansion meets tighter funding conditions and pressure to demonstrate financial sustainability.

Venture capital investors generally accept that some companies in their portfolios will fail. The model depends on a relatively small number of successful investments generating returns large enough to compensate for unsuccessful ventures.

That reality does not remove the economic impact of failure.

Startup collapses can affect employees, suppliers, customers, creditors and investors, while also leaving behind technology, distribution infrastructure and business models that may be acquired, restructured or repurposed.

The challenge for Kenya’s startup ecosystem is therefore not simply attracting more capital. It is building companies capable of converting investment into durable businesses.

Twiga Foods’ administration provides another reminder that funding can accelerate a promising idea, but long-term survival ultimately depends on the strength of the underlying business, disciplined financial management, market conditions and the ability to generate sustainable revenues.