At a time when Nigeria’s logistics and mobility startups are battling with local authorities over unfavourable policies, Kenya’s Sendy, the on-demand logistics startup that connects customers with drivers and vehicles for the delivery of goods, has raised a $ 20 million Series B led by Atlantica Ventures.
Here Is The Deal
- This round of funding was led by the newly found US-based VC Atlantica Ventures. Joining this round is Toyota Tsusho Corporation, a trade and investment arm of the Japanese automaker Toyota. Also joining this round is Asia Africa Investment, Sunu Capital, Enza Capital, Vested World and Kepple Capital.
- This round of investment brings Sendy’s total financing to $ 29 million, according to CEO Mesh Alloys.
- The $ 20 round of Sendy includes an R&D agreement with Toyota Tsusho Corporation, whose investment comes from a risk arm established by the company for Africa, called Mobility 54.
“We will analyze the optimization of the type of trucks that work well in this market … They will also analyze the creation of service centers for vehicles in partnership with us,” Alloys said.
- The company plans to use its Series B financing for new hires and update its technology.
“Getting better operational efficiency is super key, so we will invest … in engineering equipment and data equipment … and we will deploy talent to improve the services we provide to our customers,” said Alloys.
Why The Investors Invested
Co-founded in 2019 by former Global Head — Technology, Media & Telecom Group at the IFC, Aniko Szigetvari, Atlantica Ventures is a VC based in Washington DC. Szigetvari confirmed the leadership of the fund in the B Series of Sendy and that Atlantica Ventures will take a position on the board and work on strategic planning and execution with the company.
The newly formed Atlantica Ventures is Africa-focused.
‘‘We are searching for the next generation of African entrepreneurs,’’the VC notes on its website
We are investors that provide capital to early stage companies in addition to growth support, guided by our decades of experience and global relationships.’’
In October of 2019, Goodwell Investments also led a $2 million in Sendy.
“Sendy is already a game-changer in the logistics sector,” commented Joel Wanhoji, senior investment manager of the Goodwell East Africa team on the occasion of its investment in Sendy in 2019 “Its cutting-edge technology brings efficient capacity utilization and transparent pricing to a sector that was previously seen as being beyond change. Sendy’s platform is enabling savings of more than 20% on the logistics costs, which makes Sendy a good fit within Goodwell’s uMunthu mandate of providing basic goods and services to people on low and middle incomes — the majority.”
A Look At What Sendy Does
Co-founded Sendy in 2015 by Kenyans Mesh Aloys, Evanson Biwott and Don Okoth, and American Malaika Judd, Sendy allows its users to move almost anything from point A to B at the touch of a button.
The company uses an asset-free model, with an application that coordinates hired drivers who own their own vehicles, while confirming deliveries, creating performance metrics and managing payment.
In Sendy’s business and revenue model, “We take a percentage of each transaction. We also provide services for drivers such as insurance, medical insurance, vehicle financing, vehicle service and fuel credits,” said Alloys.
Sendy has offices in Kenya, Tanzania and Uganda with 5000 vehicles on its platform that move all kinds of products, according to Alloys.
Already, Sendy offers e-commerce, business and cargo delivery services for a list of customers that includes Unilever, DHL, Maersk, Safaricom and the African online retailer Jumia.
Reducing logistics costs for manufacturers and SMEs helps reduce product prices and makes goods more widely affordable. Sendy also provides a stable income for drivers on the platform.
This Alloys said is critical to Sendy’s mission.
“We are organizing a market using technology so that companies can efficiently deliver to their customers while reducing overall costs,” he said.
It Seems Investors This Year Will Be Turning More Attention To The Logistics Sector Aside Fintech
Sendy’s investment comes within six months after Kobo360, a Nigerian truck logistics startup secured $ 20million in Series A funding round backed by Goldman Sachs. Also, in November 2019, East Africa’s on-demand delivery company, Lori Systems, raised $ 30 million with the support of Chinese investors.
With this round, Sendy improves its competitive position in the main logistics space of the continent. The company plans to expand to West Africa in 2020, CEO Mesh Alloys.
On how Sendy will overtake rivals like Kobo360 and Lori Systems, Alloys points to the startup platform.
“Our customer service is superior and that is driven by our technology … I think today we are well ahead of our competition when it comes to technology,” he said.
Sendy’s latest investment shows that the African logistics landscape is still up for grab. Whoever shows up on the continent’s top business centers: Nigeria, Kenya, South Africa, Egypt and Ghana, will bite off the big pie well enough in time.
Although logistics services are not factors usually considered when ranking countries on the Ease of Doing Business Index by the World Bank, the sector is most expensive in Africa compared to other parts of the world.
At their early days, pioneer e-commerce companies Jumia and Konga were forced to burn capital by forming their own delivery services.
Even years later, including taking into account Jumia’s recent listing on the New York Stock Exchange and subsequent expansion to several countries in Africa, compliance costs related to delivery still remain one of the company’s biggest expenses.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com
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