Vendease switches to a performance-based pay system

Vendease, a Nigerian food procurement startup, is switching to a performance-based pay system after laying off 44% of its team, about 120 employees, per TechCrunch. Instead of fixed salaries, employees will earn based on performance, with an Equity Share Option Plan (ESOP) thrown in. The goal? To keep the business afloat and on track for profitability.

The new pay structure works in phases: everyone got ?140,000 (~$90) in February, regardless of their previous salary. From March to May, they can earn up to 30% of their old salary if they hit targets (which haven’t been clearly defined yet).

By December, salaries should be fully restored, if performance goals are met. The unpaid portions of their salaries will be converted into company shares, but they can only cash out under specific conditions.

Vendease insists these changes are about making the company leaner and more efficient. “We only spend what we earn,” a spokesperson said, explaining that the company has now reached break-even and is prioritising tech over expensive operations. With just over 150 employees left, they’re doubling down on their sales and payments solutions while phasing out warehousing and logistics.

One of the startup’s biggest bets right now is its Buy Now, Pay Later (BNPL) product. Many lenders avoid food businesses because of their instability, but Vendease uses its supply chain knowledge to offer loans. It claims a default rate of under 1% and has dished out over $70 million in credit since 2024. But while BNPL has been a major revenue driver, it hasn’t been enough to fully turn things around.

The company is now looking to raise fresh capital, with talks underway for a bridge round to fund tech growth and expansion. There have also been whispers of a potential acquisition, but Vendease says it’s actually the one getting approached, not the other way around. “Yes, people have shown interest, but we’re focused on scaling, not selling,” a spokesperson clarified.

With Nigeria’s tough economic climate and the naira’s struggles wiping out revenue gains, Vendease is making big moves to survive. Whether this restructuring plan will pay off remains to be seen, but one thing’s clear: it’s all or nothing for the food tech startup.