Wasoko, a popular online shopping platform in Kenya, kept its merger with Egypt’s MaxAB under wraps for over six months to prevent leaks that could disrupt the deal, according to two former employees who disclosed this information to Techcabal.
The merger is set to be finalised by the end of March 2024.
The startup, which focuses on business-to-business (B2B) sales, was established in 2013 and has secured over $140 million in funding from investors like 4DX Ventures and Avenir Growth Capital.
Employees were informed about the merger during a surprise video call in early December 2023, attended by MaxAB executives.
Despite suspicions among some employees, the announcement of layoffs in mid-January caught many off guard. Over 100 employees from various departments in Kenya and India were let go.
Nine former employees took legal action against Wasoko, claiming they were unfairly dismissed without adequate notice or compensation. They argued that the severance package favoured long-serving employees.
The court intervened, preventing Wasoko from terminating these nine employees. Some workers revealed they had taken loans assuming job security, prompting Wasoko to negotiate with its bank, Standard Chartered, to ease repayment for six months. The company also pledged to provide health insurance until March 2024.
In response to inquiries, Wasoko stated that it had followed legal procedures regarding layoffs but declined to address specific allegations due to ongoing legal proceedings.
In light of the lawsuit, Wasoko introduced an exit agreement preventing employees from suing after receiving their severance packages.
The court is scheduled to hear the case on February 13th.
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