Kenya is squaring up to claim back its 2018 title as Africa’s top destination for startup fund raising which it is either losing to Nigeria or South Africa this year. Barely a day after Twiga Foods closed a $30 million Series B funding led by Goldman Sachs, on-demand deliveries startup Sendy has raised US$2 million in funding from Goodwell Investments to help it expand further across East Africa.
Here Is The Deal
- The latest funding came from Goodwell, an Amsterdam-based impact investment firm that has previously backed the likes of Copia, Max.ng, Nomanini and Inclusivity Solutions.
- This is also the latest funding round for Sendy, which in November 2015 became the first startup to receive funding from the US$1 million Safaricom Spark Fund, which it followed up by banking US$2 million in investment in 2017.
Why The Investor Invested
Today in East Africa, logistical costs account for a staggering 40%-plus of the consumer price, due to poor infrastructure, limited use of technology, inefficient capacity utilization and a lack of pricing transparency. Food prices and prices of household goods and health services are therefore heavily inflated, negatively affecting the standard of living of at least 170 million people in East Africa.
“Sendy is already a gamechanger in the logistics sector. Its cutting-edge technology brings efficient capacity utilisation and transparent pricing to a sector that was previously seen as being beyond change,” said Joel Wanhoji, senior investment manager of the Goodwell East Africa team.
“Sendy’s platform is enabling savings of more than 20 per cent on the logistics costs, which makes Sendy a good fit within Goodwell’s uMmunthu mandate of providing basic goods and services to people on low and middle incomes — the majority.”
A Look At What Sendy Does
Launched in 2014, Sendy offers a marketplace for last-mile package delivery and logistics services, allowing customers to send packages and documents using a mobile application that connects them to motorcycle riders, and drivers of vans and pickup trucks.
The startup claims in its first year, to have completed 12,000 deliveries, had 27 drivers on its platform and revenues totaled USD 45,000. In the three years since, the company has grown fast. It has now completed over 180,000 deliveries, has more than 700 drivers on its platform and posted revenues of USD 1.5 million in 2018. Despite this, the growth potential remains massive. As well as seeking to grow through geographic expansion, Sendy is also exploring new distribution models. The startup is doing so by piloting a so-called ‘agency model’ in which packages are aggregated at a central collection point before delivery to the customer. This increases efficiency and improves margins.
Headquartered in Nairobi, Kenya, Sendy was the first company to offer an on-demand delivery platform in the region and while it currently covers Kenya, Uganda and Tanzania, it plans to cover all East Africa in the near future.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world