Vendease Seeks New Capital After Major Layoffs in Restructuring

STARTUP VENTURE CAPITALMarch 18, 2025 at 1:29 PM UTC

TLDR

Vendease, backed by Y Combinator, has made significant changes to its employee compensation model following a round of layoffs
The company, which recently cut 44% of its workforce—around 120 employees—has replaced traditional salaries with a performance-based pay system
Vendease confirmed that the changes are part of a broader restructuring to reduce costs and become more financially sustainable

Nigerian food procurement startup Vendease, backed by Y Combinator, has made significant changes to its employee compensation model following a round of layoffs. The company, which recently cut 44% of its workforce—around 120 employees—has replaced traditional salaries with a performance-based pay system, supplemented by an Equity Share Option Plan (ESOP). This restructuring comes as Vendease seeks to reach profitability.

The new pay structure includes a five-phase salary recovery plan. From February to May, employees will receive a percentage of their previous salaries based on performance targets, eventually restoring full pay by December if performance goals are met. Any unpaid portion will convert into stock options, with a portion vesting over 10 months and the remainder over three years. Employees can only exercise the options at board-approved fair market values.

Vendease confirmed that the changes are part of a broader restructuring to reduce costs and become more financially sustainable. The company, which started in 2019 to streamline food procurement for African restaurants and food businesses, aims to focus more on software-driven growth and reduce its reliance on warehousing and logistics operations.

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Key Takeaways

Vendease’s recent changes to its pay structure and ongoing restructuring efforts reflect the company’s struggle to maintain profitability in the face of Nigeria's economic challenges. The sharp depreciation of the naira and rising inflation have severely impacted the company’s operational costs, despite its significant revenue growth. The introduction of a performance-based compensation model is a strategic move to motivate employees while reducing fixed costs. At the same time, Vendease is doubling down on its buy-now, pay-later (BNPL) product, which has become a key revenue driver, helping food businesses access credit in a traditionally underserved market. However, the credit product alone is not enough to ensure the company's long-term profitability.

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