Kenya-based cloud kitchen Kun Food has shut down today, affecting 90 employees, some of whom were hired as recently as last month.
The startup, founded in December 2020 to offer ready-to-eat affordable food, underwent a trial run in Kenya in the early months of 2021 before officially starting operations later that year.
in linkedin PostThe startup’s founder and CEO Robin Reicht announced the shutdown after failing to raise funds to continue operations, accusing it of an “economic slowdown and tightening of investment markets.”
A year ago, Kun Food raised $1 million in pre-seed funding and also borrowed an undisclosed amount from a bank in Kenya. Earlier this year, the startup said it was raising $3.5 million from local and international investors to increase its production capacity.
“Since the start of the year, we have sold more than 55,000 meals, acquired over 6,000 individual customers and 100 corporate customers. But at $3 per meal, that was not enough to sustain our growth… With food costs down our margins, we simply couldn’t keep up,” he wrote.
Kun’s take-off was unsustainable, with founder Reacht incensing Kenyans with remarks that he launched the startup after failing to get affordable ready-to-eat meals in the country.
His statement was met with immediate backlash, with many Kenyans taking to online space to showcase several restaurants serving affordable food across the country. Kun issued an apology, expressing regret for how the statement turned out.
Later, and buoyed by $1 million 2021 funding, the foodtech startup ramped up its operations with a promise to prepare and deliver fresh food at affordable prices to online customers. Initially, the startup handled everything including deliveries, but in the last few months it started using third-party apps like Uber Eats, Glovo and Bolt Food to fulfill its orders.
Until the indefinite closure, Kun was hoping to increase production capacity and expand its operations beyond Kenya’s capital, Nairobi. It had set a target of making its presence across the country by 2024.
The startup said in a previous statement that it had invested heavily in research and development to ensure that it has a “fully dedicated in-house team that is constantly working on menu advancement to bridge the nutritional and value gap.” As well as to meet the changing demands of the customers. It had also set up hubs in Nairobi, to be closer to its target customer.
Kun’s investors included Pan-African venture capital firm Launch Africa Ventures, which led its pre-seed round last year, Century Oak Capital GmbH, and ConsenSys.
Below is Reich’s full statement.
sad day. Kun Food closed today.
Since the beginning of the year, we have sold over 55,000 meals, gained over 6,000 individual customers and 100 corporate customers. But at $3 per meal, it wasn’t enough to sustain our growth.
Due to the current economic slowdown and tightening of investment markets, we could not extend our next round. With our margins declining coupled with rising food costs, we just couldn’t keep up.
My first thoughts go to my team. You have put your heart and soul into building the kun that so many people love. I’m deeply sorry it didn’t work.
To all my fellow entrepreneurs, please visit the “Employee Page” on LinkedIn and see if your hiring needs can be met by some of our team members. I know that is a difficult time for you too. But they are fantastic people who will bring tremendous value to your company. You can call me if you need any reference about Kun employee.
My second thought is to our investors. Some of you joined the Kun Yatra when only me and a cook were delivering food on foot to the nearby office. A few others joined later and helped us grow as a foodtech startup with one tech platform, one factory, one kitchen studio, 7 distribution hubs, 6000 customers and a team of 90 people. You not only invested in Kun but you gave us your time, brain-breadth, connection and emotional support. I am deeply sorry that Kun’s vision did not come true. Betraying your trust is something I will never forgive myself for.
My third thought goes out to the suppliers, customers, bankers and any kind of partners who supported us along our way. I am sincerely sorry for the result.
Many things could have been done differently, certainly better. The coming months will allow us to reflect on Kun’s failure, and I hope to share about it when the time is right.
If you know of anyone who may be interested in obtaining Kun’s IP or assets, please contact PM.