The on-demand logistics space in Kenya is about to scale to a new height following Sendy’s announcement. The logistics start-up announced the successful series B round that raised $20 million. Atlantica Ventures led this round backed by Toyota Tsusho Corporation.
Atlantica Ventures is a venture capital fund with a focus on tech start-ups in Africa. The fund started in 2019 and is still new in the African logistics space. The Japanese automotive firm, Toyota provides capital funding to start-ups through its investment arm, Toyota Tsusho Corporation.
Other participants in the Series B round included Sunu Capital, Kepple Capital, Asia Africa Investment, and Vested World. Sendy was officially in 2015 and has since expanded its operations from Kenya to Tanzania and Uganda.
Evanson Biwott, Meshack Alloys, Don Okoth, and Malaika Judd co-founded Sendy. Over 5,000 vehicles are already registered on its platform. Some of the major clients that Sendy serves include Safaricom, Unilever, and Maersk.
Sendy operates under an asset-free model that allows it to invest most of its capital funds in technology. Clients in need of delivery services connect with drivers via a mobile app or web platform. The rates vary depending on the type of courier and distance.
The logistics start-up focuses on helping entrepreneurs grow their business by offering fast, reliable, and affordable delivery services. With the rise of online businesses in Kenya, minimising delivery expenses is important to business owners. Kenyans have embraced e-commerce but delivery costs increase prices significantly.
With less than Ksh. 100, a business owner can deliver a product within Nairobi’s CBD via a runner courier. Sendy offers the alternative of express bikes for small packages at a base price of Ksh.280. Pickups and vans are available for medium loads and trucks in different sizes for big loads.
Sendy has tried to cover all types and sizes of businesses in the market. Another selling point is its insurance cover on products in transit. African business owners know the risks involved in transporting goods, especially across borders.
The first step for new clients is to create an account on the Sendy app or web solution. The client will then choose a pickup and destination for the item(s) that needs delivery. The app automatically gives an estimated cost based on the chosen courier services.
Clients can track the designated driver in real-time until the goods arrive at the destination. Sendy boasts of an efficient customer service that is ready to serve clients in case of issues with delivery. The company delivery anything from farm produce to furniture, clothes, parcels, and food.
Sendy’s major competitors in the Kenyan market are Nigeria-based Kobo360 and Lori systems. Both companies have raised significant amounts through venture capital to expand their operations. In 2019, Kobo360 raised $20 million in its Series A round. Goldman Sachs was the major investor in that round.
Lori systems closed $30 million in the same year. Kobo officially launched its operations in Kenya in 2019, having established a strong presence in Nigeria and Ghana. Sendy has already established its presence in the Kenyan market.
The major challenge now is to keep its client base in the presence of the new entrants. The logistics space is huge but risky. Expansion to different markets, optimizing safety, and fast deliveries are necessary to win.
Sendy plans to stay ahead of its competitors by upgrading its technology. The current technology is already a step ahead but further investments in better technology will boost its competitiveness. Sendy faces other established competitors such as Glovo and small logistics firms, especially public transport companies.
Growth and expansion plans
Sendy remains committed to efficient deliveries and helping business owners to reduce their costs. The logistics company intends to deploy new talent to improve its services further. The talent includes engineering and data teams that will help in improving operational efficiency.
Sendy intends to optimize its trucks and set up service centers for its vehicles. The speed of delivery depends on the trucks, especially for heavy loads. Packed trucks are a common site on Kenyan roads majorly because of breakdowns.
The start-up may solve this issue for business owners with efficient trucks. The move is an opportunity for drivers who intend to join the network to invest in the best truck models.
Opportunities for Kenyans
$20 million is a good deal for a Kenyan company that has already established its brand in the market. What does it mean to Kenyans at a time when economic projections show tough times ahead? Let us break it down to you. How can you benefit from such an investment?
The obvious path that most Kenyans would follow is to apply for a job at Sendy. You may be lucky to get a good job as a data scientist or engineer if the company follows through its expansion plan. However, such opportunities are limited. You need to think beyond getting a job.
Some Kenyans are already ahead of the curve. We have witnessed foreign companies like Kobo360 and Glovo succeed in our market. Kenyans are establishing their own logistics solutions or apps that operate the same way as Sendy and its competitors.
Muva Technologies helps clients develop such mobile apps ideas further into income-earning ventures. Learn from Sendy. Four investors came together to establish a business that can raise $20 million from international venture capital funds.
If you start today, your business could be the next in line for such huge investments in the coming years. The initial investment is huge. You may need to work in partnership with like-minded people but start. Think beyond Kenya to other parts of Africa where business owners face the same challenges in delivering products.
The logistics space in Africa presents multiple opportunities for Kenyans to create solutions. E-commerce is expanding fast in the country. Kenyans need to wake up to these opportunities before foreign companies dominate all major markets.
Even with companies like Sendy in the market, the space is large enough for new entrants to provide better solutions. The successes of established logistics companies should act as pointers to entrepreneurs to existing business opportunities.