Vendease, the Nigerian foodtech startup, is shaking things up in a big way.

In a bid to cut costs and boost profitability, the company has switched to a performance-based salary system while also looking for fresh investment. If you’ve been following the African tech space, you’ll know that times have been tough for many startups, and Vendease is no exception.

What’s Changing with Salaries?

Earlier this year, Vendease laid off nearly half of its workforce—about 120 employees. Now, for those who remain, the company has introduced a phased salary recovery plan. According to internal documents obtained by TechCrunch, here’s how the new system works:

On top of that, any unpaid salary portions will be converted into share options under Vendease’s Equity Share Option Plan (ESOP). Half of these shares will vest over ten months, while the rest will take three years. But here’s the catch—employees can only cash out based on the fair market value set by the board.

A Shift in Strategy

Vendease isn’t just changing how it pays employees; it’s also adjusting its business model. The startup, which raised $30 million in its Series A funding round from investors like Partech Africa and TLcom Capital, is moving away from directly managing logistics and warehousing. Instead, it’s doubling down on software, AI-driven efficiencies, and financial discipline.

According to the company, these changes have already helped it break even. But it still needs fresh capital to keep going. With about 150 employees left, Vendease is betting big on internal restructuring and technology to sustain operations. A major focus is its payments and credit marketplace, which could prove more profitable than its traditional procurement services.

Currency Struggles and BNPL Expansion

Since launching in 2019, Vendease has helped over 2,000 customers move around 400,000 metric tonnes of food, saving them significant procurement costs. But despite tripling its naira revenue since 2022, the company has been hit hard by currency devaluation. Inflation and rising costs have made profitability an even bigger challenge.

One of its lifelines has been its buy now, pay later (BNPL) offering, which provides short-term credit to food businesses. Over the past two years, Vendease has issued more than $70 million in credit, boasting a default rate of under 1%—a rare feat in Nigeria’s lending space.

Vendease’s CFO, Mohamed Chaudry, who came on board in January 2024, has been championing BNPL as a key path to profitability. But even with this focus, the company still needs more cash to fund its next growth phase.

Fundraising and Potential Acquisition Talks

Right now, Vendease is talking to both existing and new investors to raise a bridge round. According to TechCrunch, this money won’t go toward daily operations but rather to support technology growth and expansion.

The big question remains: will these changes be enough? With its restructuring efforts in full swing, the next few months will be crucial in determining whether Vendease’s strategy can secure its long-term future. If it plays its cards right, it might just navigate these financial headwinds and come out stronger.