Jugnu, a B2B e-commerce supply chain player and another significant player in Pakistan’s startup ecosystem, has decided to discontinue its main business activities.
Jugnu, a B2B e-commerce supply chain player and another significant player in Pakistan’s startup ecosystem, has decided to discontinue its main business activities.
According to Jugnu’s team statement, the company is planning to shift its focus towards becoming a tech platform. By leveraging their extensive technology and data suite, Jugnu aims to enable commerce, enhance financial inclusion, and introduce other advancements. This will ensure that Jugnu continues to live up to its mission of empowering small and medium businesses.
The startup, Jugnu would also give up its current infrastructure for logistics, inventory, and self-managed fulfilment centres, according to the statement.
Jugnu, which has assisted over 100,000 small and medium-sized businesses, is dealing with a change in its business model as a result of the macroeconomic situation around the world.
The company is adjusting its business strategy in order to focus on capital efficiency and profitability. To assist in the transition of key enablers to their respective missions, the company is contacting organisations.
A former Business Development Executive confirmed that Jugnu has closed as a result of an investor’s withdrawal. He continued by saying that because of the thin profit margins on their high-cost products, E-commerce FMCG companies are unable to turn a profit.
The mission of Jugnu, which was established in 2019 by former Unilever executives and Salesflo co-founders, is to digitise, empower, and expand small- and medium-sized retailers. Jugnu connected with 30,000 retailers in Islamabad, Rawalpindi, and Lahore after raising $25.7 million in three funding rounds, with plans to expand to other cities.
Sary, Sarmayacar, and Systems Limited, three MENA-based eCommerce marketplaces, have already established contact with the business.
According to Haroon Javed, a former supervisor at startup Jugnu, “Jugnu was facing 10-15 percent losses in inventory management alone caused by the internal pilferage while the companies like Unilever manage to get their losses around 0.2 percent at some distributions.”
Additionally, he claimed that the senior management was rife with corruption and frequently charged the company three times the actual cost by using incorrect vouchers for some operations, then divided the money among themselves.
Mismanagement resulted in the purchase of third-class goods at market rates, which led to the purchase of 25,000 bags of milk with just one day left before their expiration date. This was done without adequate distribution time, which is between two and a month.
The store owner held the money, and if the company had been notified sooner, the goods that were about to expire could have been replaced. The management of logistics and route planning was also very poor.
Despite the significant funding round completed last year, the business reportedly fell behind on payments to its logistics partners, including a top startup to which it was required to make a one-time payment of Rs. 7.5 million for a short period of time.
“This outcome could only be the result of the toxic work environment and unprofessional behaviour of senior management,” Haroon continued. He also noted that despite the co-founders’ best efforts, office politics and preferential treatment persisted despite the fact that it was a great project and they were all extremely enthusiastic about it.
He claimed that the executives who were supposed to report to them were the ones who hired individuals with banking experience for positions in logistics management and then trained them.
The founders should be appreciated for their perseverance despite losses and an environment where promotions were based on personal references. This led to loyal employees leaving Jugnu, including former logistics management, and a loss of B2b experience.
Airlift and MedznMore, the third significant supply chain startup in the nation, has folded after raising millions of dollars. This follows the failure of other projects that were never funded. Startups frequently spend venture capital funds on marketing to boost sales, relying heavily on outside funding without improving operational management.