Food Distribution Company Twiga Acquires Three Distributors Amidst Controversy Surrounding a "Soft Liquidation" Tactic Strategy
Concerns about the financial health of Twiga Foods persist, with a report by local tech publication Tech-ish casting a shadow over the company's recent moves. The report claims that Twiga is actively engineering a soft liquidation strategy, restructuring operations under a newly incorporated entity referred to internally as "NewCo."
The allegations include a picture of a deeply fractured workplace culture, with micromanagement, operational inefficiency, and alleged racial bias in hiring practices. However, it's important to note that Twiga Foods currently appears to be operating without public allegations related to corporate restructuring or financial evasion.
Twiga Foods, founded in 2014, has gained global recognition for its digital approach to streamlining food supply chains. The company has raised over $160 million through several funding rounds, with investors including Goldman Sachs, IFC, and Creadev.
Despite its strong funding history, the whistleblower claims that the company remains stuck in a manual, outdated grind. This claim contrasts with Twiga's shift toward a more asset-light model within the African tech and agritech landscape, helping consolidate its presence in the continent's agri-supply chain sector.
The method and timing of Twiga's moves, coupled with the allegations of financial evasion and questionable governance, are raising red flags among stakeholders. The restructuring plan, set to take effect by August 2025, includes licensing the Twiga brand and customer database to NewCo, abandoning its current lease at Tatu City, using third-party logistics providers, and rehiring only 10-12 employees from the current workforce.
The whistleblower suggests that Twiga's new leader, Charles Ballard, is running a company held together by underpaid labor and fear. The allegations include delayed vendor payments and unpaid staff salaries. However, it's worth noting that none of the recent publicly available and credible sources mention allegations of financial evasion, fraud, or improper corporate restructuring related to Twiga Foods.
Twiga's recent acquisitions are part of a wider trend in Kenya's digital commerce and agritech sectors, where companies are diversifying their revenue streams amid tightening capital markets and rising operational costs. The company has acquired majority stakes in three local distributors: Jumra, Sojpar, and Raisons. These acquisitions are expected to bolster Twiga's procurement capabilities and extend its national presence across the Central, Western, and Coastal regions of Kenya.
The road ahead for Twiga may depend less on its strategic ambitions and more on whether it can restore trust among staff, suppliers, and investors alike. The company plans to resume its previously suspended operations in Western Kenya, and its brand and related hospitality arms under LMDV Hospitality have been involved in premium partnerships, such as a notable deal with AS Monaco, reflecting business expansion and positive corporate positioning.
However, some financial reports on "TWIGA" refer to Tanzania Portland Cement Public Limited Company, not Twiga Foods, and do not indicate financial irregularities in that context. The piece of land originally leased to Twiga Foods for maize production as part of Kenya's Galana-Kulalu Food Security Project was transferred to Selu Ltd, a company founded by Peter Njonjo, a former Twiga Foods CEO. This transfer was done to ease government financial constraints and ensure continued cultivation on the site. This kind of restructuring—moving asset control or operations to affiliated firms—is a standard practice to streamline operations and is not an allegation of wrongdoing.
In conclusion, while Twiga Foods faces allegations of questionable governance and restructuring, it's important to note that no explicit accusations of financial evasion have surfaced in credible sources. The company is undergoing normal business developments, including management changes and strategic asset transfers common in growing agritech businesses. The future of Twiga Foods will largely depend on its ability to address these allegations and restore trust among its stakeholders.
Technology plays a crucial role in Twiga Foods' operations, having gained global recognition for its digital approach to streamlining food supply chains. However, concerns about the company's financial health and alleged operational inefficiencies raise questions about its reliance on technology and its ability to adapt to the more asset-light model within the African tech and agritech landscape. The future of Twiga Foods, therefore, may hinge not only on its strategic ambitions but also on its capacity to effectively utilize technology and restore trust among stakeholders.
