Controversial food tech startup Kune folds less than a year despite raising Sh100m

Kune, a Kenyan-based cloud kitchen has shut down its operations barely a year after its launch, the company’s founder and Chief Executive Officer (CEO) Robin Reecht announced.

The startup which was founded in 2020 will see 90 employees laid off and lose more than 6,000 individual customers and 100 corporate customers it said it had acquired over time.

In a statement posted on his LinkedIn page, Reecht cited a stifled economy and inflated food prices as circumstances that contributed to Kune’s closure. “With the current economic downturn and investment markets tightening up, we were unable to raise our next round. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going,” he said.

A year ago, Kune Food raised Sh115 million ($1 million) pre-seed funding and also borrowed an undisclosed amount from a bank in Kenya.

Earlier this year, the startup said it was raising $3.5 million from local and international investors to ramp up their production capacity.

“Since the beginning of the year, we sold more than 55,000 meals, and acquired more than 6,000 individual customers and 100 corporate customers. But at Sh350 ($3) per meal, it just wasn’t enough to sustain our growth … Coupled with rising food costs deteriorating our margins, we just couldn’t keep going,” he wrote.

The announcement comes just four months after the startup began its commercial operations at established meal centers around Nairobi.

Addressing Kune’s investors, he said, “Not only did you invest in Kune but you gave us your time, brain-width, connections, and emotional support. I am deeply sorry that Kune’s vision didn’t come true. To betray your confidence is something for which I will never forgive myself,” he said.

“Many things could have been done differently, better certainly. The coming months will allow us to reflect on Kune’s failure, and I hope to share about it when the time will be right.”

Kune’s take-off was shaky, with founder Reecht annoying Kenyans with remarks indicating that he launched the startup after failing to get affordable ready-to-eat meals in the country less than a month after landing in Kenya.

“After three days of coming into Kenya, I asked where I can get great food at a cheap price, and everybody tell [sic] me it’s impossible,” he said during an interview with TechCrunch. “It’s impossible because either you go to the street and you eat street food, which is really cheap but with not-so-good quality, or you order on Uber Eats, Glovo or Jumia, where you get quality but you have to pay at least $10.”

Mr Reecht founded Kune just one month later.

Kenyans were aggrieved by his comments and did not hesitate to voice their critiques. 

They argued that Reecht’s ability to secure funding so quickly was due more to his white privilege than his business plan, which some believed aimed to solve a nonexistent problem. Those discussions gave way to a larger conversation about white privilege and favouritism in tech, as well as Kenya’s neglect of its local founders.

During an interview with Business Daily in March, Head Chef Roman Wamburu said that they had started serving and distributing meals including chapati, mbuzi fry, traditional greens, and Nigerian jollof rice, from its Nairobi’s Arboretum kitchen with pork and chicken being the most popular dishes followed by beef and goat.

“We saw an opportunity to cater to working people who want to order meals that are not fast foods,” said Brian Samoei, the operations director.

Most delivery services distribute food from third-party restaurants or supermarkets but Kune cooked its food from a central kitchen, with customers paying through Kune Foods website or a mobile app.

Reecht has now offered to sell off Kune Food's IP and assets even as he signs off the market, marking one of the shortest stint of any brand in the Kenyan market

“If you know anyone who could be interested to acquire Kune’s IP or Assets, please reach out by PM,” Reecht said.