Why Investors Backed Nigerian Logistics Startup, Sendbox, In A $1.8m Funding Round
SendBox, a Nigerian logistics startup that enables businesses send parcels and items within the country and globally to more than 200 countries, has announced it has secured $1.8 million in investment.
“No matter where in the world customers are, we want African SMEs to be able to reach them. Deliveries in Lagos, Abuja, Port Harcourt and Ibadan have made up a large proportion of business for our domestic merchants. On top of that, affordable access to the UK, EU, US, and Canada has created an opportunity to sell products to hundreds of millions of previously unreachable buyers,” said Emotu Balogun, CEO and co-founder of Sendbox.
“With this fundraise, we aim to support more and more SMEs and help them grow both locally and internationally, scaling alongside them as we connect African merchants with a global community of consumers.”
Investors in this round include 4DX Ventures, Enza Capital, FJ Labs, and Golden Palm Investments. Also participating in the latest round are Flexport and Y Combinator (Sendbox was a graduate of the YC winter batch of 2021.)
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Since the company’s inception, it has raised over $2 million in total funds. In 2018, it received pre-seed funding from Microtraction and 4DX Ventures.
The logistics platform intends to expand its activities, hire new employees, and expand into new markets in West and Eastern Africa on the back of the funding.
With the new funding the platform will also be able to further digitise deliveries for African small and medium-scale firms (SMEs) through its delivery management platform, which combines logistics providers and enables tracking. The company’s next stage of development will further include financing and payments, as well as e-commerce and marketplace interfaces across West Africa and beyond.
Why The Investors Invested
Sendbox’s traction over the years is remarkable. The company boasts of over 10,000 merchants and over 200,000 deliveries, with 35 to 40% of the transactions conducted being offshore.
Sendbox’s income and transactions have also increased by 300 percent year over year in the last three years, according to CEO Balogun.
“African e-commerce is accelerating faster than anybody could have imagined a decade ago and it needs smart solutions to ensure that logistics and fulfillment capacity doesn’t lag behind,” Walter Baddoo, the co-founder and general partner at 4DX Ventures, said of the seed round.
“Not only were we impressed by Sendbox’s 300% year-on-year growth since launch, but we’re seeing the market potential balloon with over 40 million Nigerian SMEs and a projected industry value for social and e-commerce reaching $45 billion on the continent by 2025.”
According to a projected research released by the International Finance Corporation (IFC) in May 2021, the value of e-commerce on the continent might climb by $15 billion between 2025 and 2030.
A Look At What SendBox Does
Founded in 2016 by the duo of Emotu Balogun and Segun Afolahan, Sendbox offers same-day delivery inside Lagos, Nigeria and across the country in three to five days; as well as international delivery in five to seven days. Clothing, fashion, lifestyle, beauty, and self-care products have been the most popular among merchants.
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Users can access Sendbox through iOS, Android, the web, WhatsApp, Facebook, Instagram, and other e-commerce platforms, as well as developer APIs.
Emotu Balogun, the company’s founder and CEO, established Sendbox nine years ago while running his previous venture Traclist. The now-defunct organization was a Nigerian fashion marketplace that assisted small businesses in selling their wares online. Traclist fell into scale challenges before shutting down, as most of its merchants were unable to complete their orders despite the presence of a few logistics businesses in the nation.
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Balogun then realized that other marketplaces had the same issue. After these platforms had gotten users to buy things, the next challenge was figuring out how to assist with logistics. Because no logistics supplier could meet Traclist’s fulfillment needs, Balogun and Olusegun Afolahan began constructing Sendbox in 2016, and the company was completely launched two years later.
Sendbox logistics Sendbox logistics
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