Twiga Foods halts Nairobi operations, considers new distribution hub 

Twiga Foods, one of Kenya’s most funded e-commerce startups, is temporarily suspending its Nairobi operations for two months as part of what the company calls “the final stage” of its ongoing business overhaul.

The move follows months of internal restructuring, acquisitions, and layoffs to cut costs and shift to a leaner, more data-driven distribution strategy. In a statement on Thursday, Twiga said the operational break will allow it to relocate from its current distribution hub at Tatu City in Kiambu County—where it has been negotiating a new lease with the landlord—to a more strategically located facility closer to Nairobi.

Twiga is weighing options in Baba Dogo, Mombasa Road, and Syokimau, the company told TechCabal.

Twiga’s pause in its Nairobi operations is the latest indication of pressure from investors and market realities forcing it to recalibrate its once capital-intensive supply chain model. After acquiring local distributors Jumra, Sojpar, and Raisons, Twiga now manages eight distribution centres across Central, Coast, and Western Kenya, but is avoiding further infrastructure investment in the capital. 

The shift signals a move toward an asset-light approach, focused on centralising operations and leveraging technology to optimise inventory, cut transportation costs, and better serve small retailers.

Despite raising over $180 million in funding over several funding rounds, Twiga’s business model has failed to prove scalable in the Kenyan market, according to three former employees who spoke with TechCabal. The former staffers, who requested anonymity to speak freely, said Twiga took too long to abandon its capital-heavy approach for an asset-light strategy focused on tech-enabled matchmaking between farmers, suppliers, and vendors, rather than owning logistics or inventory. 

“We were burning money trying to do everything,  farming, warehousing, and deliveries,” said one of the ex-employees. 

The company told TechCabal on May 16 that it is realigning its operational structure due to shifting market demands. Kenya’s B2B food distribution depends heavily on a network of regional hubs and last-mile delivery to reach thousands of small retailers across urban and rural areas. 

Managing this complex supply chain requires balancing inventory, transportation costs, and timely deliveries, challenges that Twiga promised to address by centralising key functions and using more data-driven operations. The company still claims it is committed to this goal, saying better tech and data will help improve efficiency and keep prices down.

Twiga believed in its original model of managing food distribution from farmers to urban retailers, expecting that complete control of the supply chain would eventually give it a competitive edge. That conviction, according to two other ex-employees,  kept the company from making necessary strategic adjustments until 2025.

One person with direct knowledge of Twiga’s operations told TechCabal that persistent losses stem from mismanagement in the logistics and supply chain departments. These problems have strained performance over time, leading to significant job cuts in those areas. 

“The supply chain department was mismanaged and cost Twiga a lot of money,” the person said, without disclosing how much Twiga was burning monthly at that time. 

Yet the repeated layoffs expose the tension between Twiga’s promises and its current reality. Cutting hundreds of supply chain roles undercuts its earlier vision of building a stronger, tech-powered distribution system and raises questions about how much of that work will now depend on third-party partners rather than Twiga’s teams.

“The internal reorganisation impacts a certain number of roles, mainly within supply chain functions,” Twiga said in a statement to TechCabal. 

The statement confirms the authenticity of the leaked Project Easter document—which Twiga had not disputed—which showed that supply chain roles would suffer the most. 

The startup’s last major funding round was a $35 million convertible note in 2023, and insiders say investors have been pushing for tighter discipline on costs and operations. With the Nairobi pause, Twiga hopes that consolidating its infrastructure and enhancing its tech capabilities will provide it the stability it needs to regain its footing and remain relevant in Kenya’s retail market.

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