[Breaking News] Yudala Acquires Konga in a $10m Deal

 

We hinted last month about an acquisition talk between Konga and Yudala, it has now been confirmed that it has finally closed and Konga’s journey as an independent company just came to an end.

Zinox group is being reported as the acquirer. Zinox being the parent company of Yudala acquired the company for $10m – $15m (according to our source close to the negotiation) and the two companies will be integration with potential to expand across Africa.

Yudala model is different, it combines offline with online commerce giving customers a complete experience. We see this as a strength and could help it better execute e-commerce strategies more than Konga could (given its burn rate).

The acquisition includes; Konga.com, Kongapay, and KOS-Express. This is a total package. The acquisition will also see the company recall some fired staff in a bind to revisit some products and build more capacity as it starts a new journey.

 

Yudala Chairman Takes Over as Konga’s chairman

We hinted earlier in the month that talks to acquire Konga is ongoing between Konga and Yudala.

We can report authoritatively that Yudala’s Chairman (Leo Stan Eke) as been appointed as Konga’s CEO. We expect an acquisition to close soon.

This put to an end, the tenure of Sim as the Chairman (ceremonial) of the company he founded years ago.

 

What this space.

Konga exits B2C e-commerce, shutdown KongaDaily and now a “JiJi” Clone

Konga, the poster child of Nigeria e-commerce is pivoting to pure-play marketplace helping merchant list and sell via WhatsApp. As we found out this morning, customers can no longer “Buy” on Konga, instead, they can only “contact seller” and chat up merchant to finalize order.

This is displeasing as we are currently concluding a report on e-commerce in Nigeria and a possible way it can re-invent itself going forward. With the hope that market players can adjust their strategy in the new year and “think different”! We will publish that later in the month.

Layoff as sign of trouble

Back in July 2016, Konga made its first significant layoff, the CEO had stated as well that the company will be downsizing every six months. It also made a whopping 60% layoff last November, we also learned from an insider that some were let go silently in December.

KongaDaily Shutdown

Sometimes, size could be a burden and the new vertical which looked like it could turn around the company, could not live up to expectation. At its height, the company was doing N700k daily in the transaction but was too small to move the needle at Konga. It’s also said that company has made a significant investment in suppliers and couldn’t sell enough to justify the need for such an investment.

Acquisition negotiation

There are rumors that Konga is currently pushing to sell itself as current investors as refused to back it and money in the bank is fast depleting. An acquisition talk was (alleged) to have been held with Yudala but the talk has not proceeded positively in recent days.

What this means for the industry

Our view is that, for as long as humans use the internet, commerce will remain a thing. As such e-commerce will not die but will need a radical model to execute in this market.

With Paystack recent report of N2.7b in transactions in December (mostly from Merchants), then e-commerce is actually working but not at scale. The question is, what’s the best way to do e-commerce in Nigeria?