Food startup Vendease moves to performance-based pay salary system
Nigerian food procurement startup Vendease has revamped its compensation system from a traditional model to one based on performance after experiencing two rounds of layoffs within five months.
The Y Combinator-supported company, which let go of 44% of its staff—roughly 120 individuals—last month during its second job cut in five months, has shifted to a performance-driven salary structure, replacing traditional pay with a model linked to employee performance, along with an Equity Share Option Plan.
Vendease, which secured $30 million in its Series A funding round from investors like Partech Africa and TLcom Capital, indicated that this restructuring is crucial for achieving profitability and attracting new investments.
Company documents reveal that Vendease has introduced a phased salary recovery plan for the employees who remain.
In February, all staff members received a flat salary of ₦140,000 (~$90), irrespective of their prior salaries. From March to May, wages will rise to 30% of former salaries for those who reach performance goals—though the company has not publicly specified what these goals are. Salaries are expected to increase to 60% between June and August and then to 90% from September to November, with full salary restoration anticipated by December, depending on both company performance and individual efforts.
In addition to these modifications, the unpaid salary portions will be transformed into share options under the ESOP, with 50% vesting over ten months and the remaining portion over a three-year period. However, employees can exercise these options only at a fair market value approved by the board, in accordance with the agreement.
Even with the significant pay restructuring, Vendease claims to be at break-even and approaching profitability.
“Vendease has reorganized its business and operations. We’re a software company, and our aim is to use technology to support OPEX-heavy operations rather than managing them directly,” a company spokesperson told TechCrunch.
The startup is confident that the new compensation approach will enhance employee productivity while ensuring financial sustainability. “We only spend what we earn, which keeps us continually at break-even and focused on attaining profitability,” the spokesperson added.
With just over 150 employees still on board, Vendease is now emphasizing internal restructuring, new capital infusion, and efficiencies driven by AI to cut costs and maintain operations.
The company is redirecting its attention towards software-driven growth, improving its sales and payment offerings, and broadening its credit marketplace. As part of this strategic shift, Vendease is gradually discontinuing its warehousing and logistics functions, aligning its business model with a more streamlined and technology-centered approach.
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