Nigerian food procurement startup Vendease is undergoing a major transformation in a bid to survive tough market conditions and push toward profitability. After cutting nearly 44% of its workforce — around 120 employees — last month, the YC-backed startup has now restructured its employee compensation model, moving away from traditional salaries to a performance-based pay system supplemented by an Equity Share Option Plan (ESOP).
The new model reflects Vendease’s aggressive shift toward financial sustainability and leaner operations, as it also looks to raise new funding to extend its runway.
Internal documents reviewed by TechCrunch reveal that Vendease introduced a five-phase salary recovery plan starting in February. All employees received a flat salary of ₦140,000 (~$90) that month, regardless of their previous pay. From March to May, staff could earn up to 30% of their original salary based on meeting unspecified performance targets.
If milestones are met, wages rise to 60% from June to August, then 90% from September to November, with full salary restoration by December, again contingent on individual and company-wide performance.
The unpaid salary portions will convert into equity shares under the ESOP, with 50% vesting over ten months and the remainder over three years. However, exercising these options will depend on a board-approved market valuation, according to the new employee agreement.
Confirming the shift, Vendease insists the changes are strategic, not desperate. “We’ve restructured our business to prioritize technology-led growth. We’re now consistently operating at break-even and staying laser-focused on profitability,” a company spokesperson explained.
Founded in 2019 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, Vendease set out to streamline food procurement for restaurants and food businesses across Africa. Backed by top investors like Partech Africa and TLcom Capital, the startup raised $30 million in its Series A and quickly became a major player in Nigeria’s food supply chain.
By 2022, Vendease claimed to have moved 400,000 metric tonnes of food for over 2,000 businesses, helping clients save $2 million on procurement and cut wastage losses by $500,000.
However, macroeconomic headwinds — particularly Nigeria’s naira devaluation and soaring inflation — have battered the business. While Vendease’s revenue tripled in local currency, the gains were wiped out in dollar terms, squeezing profitability for its capital-heavy operations.
To weather the storm, Vendease is now pivoting hard toward software-driven growth. The startup plans to scale back warehousing and logistics operations and instead strengthen its sales, payments solutions, and credit marketplace, driven by AI-powered efficiencies.
One of Vendease’s brightest spots has been its Buy Now, Pay Later (BNPL) product, which offers food businesses much-needed credit. Traditional banks often avoid the sector due to its volatility, but Vendease uses its market knowledge to underwrite loans directly via its platform.
So far, Vendease has issued over $70 million in credit, claiming a default rate of less than 1% in the past two years — impressive figures in a risky sector.
The BNPL success became a major focus after CFO Mohamed Chaudry joined in January 2024. He identified the credit product as a potential pathway to profitability. Yet, despite its strong performance, BNPL alone isn’t enough to carry the startup.
With less than 150 employees remaining, Vendease is now pursuing a bridge funding round — not to cover operations, but to scale its technology and expand its product offering.
Meanwhile, sources say the company has also explored potential acquisitions or partnerships within the HORECA (Hotels, Restaurants, and Catering) and FMCG sectors. However, Vendease insists any talks of a sale are premature.
“It’s common to get approached for M&A when you’re growing fast in a unique space like food procurement,” a spokesperson noted. “Yes, we’ve had inbound interest, but our focus remains on scaling, not selling.”
Vendease’s story is a familiar one in Nigeria’s startup scene, where many local players are struggling under the weight of currency depreciation, high inflation, and limited access to foreign capital. The startup’s leadership hopes that this restructuring — combining cost control, employee ownership, and AI-driven scaling — will stabilize the business and attract the next round of investor support.
As the food procurement space evolves, Vendease is betting that leaner operations and a laser focus on software will be its ticket to surviving the downturn and eventually thriving.
