The logistics industry in Nigeria, like any informal sector, struggles with poor infrastructure and other inefficiencies, making it difficult to do business. small – For moving and storing goods.
Many startups have tackled the challenges of middle-mile and last-mile delivery, but one untapped area is providing an end-to-end fulfillment solution. Income, a three-year-old startup, fills this gap by simplifying order fulfillment and retail distribution for businesses in Africa. She has secured a pre-seed round of $1.9 million, which she will use. improve its offering; To expand to more cities in Nigeria and Kenya, the two markets where it currently has a presence. and expands its partnership network in these markets.
Ingressive Capital, a pan-African early-stage VC, led the $1.3 million equity portion of the round. Other participants included Techstars Toronto, Magic Fund, Golden Palm Investments, Reflect Ventures and Vastly Valueable Ventures. Additionally, Founders Factory Africa and SeedFi contributed $600,000 in loan funding.
The startup aggregates and provides access to end-to-end infrastructure that improves order fulfillment for businesses. Its solution allows them to access flexible storage, monitor and manage inventory, process and fulfill orders, manage deliveries and returns, and receive and reconcile cash on delivery in real time.
CEO Open OnBoy., in a conversation with TechCrunch, explained that Renda uses an asset-light approach. Like companies like Flexport and ShipBob, Randa doesn’t own its assets. Instead, Randa partners with various suppliers in the chain — from warehouse and other storage companies to delivery trucks and bikes — and companies need to take payments because many transactions are done in cash. go — without allowing solutions to be tailored to each client’s needs. Owner of a fleet of assets.
According to Onaboye, this approach has helped Renda build a wide partnership network that has enabled it to rapidly expand its clients across the country. The platform has more than 300 warehouse and storage partners, more than 3,000 delivery assets, including trucks, vans and bikes, and more than 2,000 cash collection partners.
“The beauty of Renda is that we have no assets. We do not own any delivery or warehouse assets ourselves. Instead, we take advantage of existing resources across the country. We collect storage spaces and warehouses that may be underutilized and connect them with businesses that need storage solutions,” said the CEO, who founded the company with his sister. . Baby Onaboy “Similarly, we onboard delivery assets, including vans, trucks and bikes, that are sitting idle and make them available to businesses to manage deliveries. Whether businesses want to handle their own deliveries or outsource them to us. are, Renda provides a platform to streamline operations efficiently.
Renda’s customer base has grown since its launch in 2021. Initially serving small businesses, the logistics startup now serves e-commerce businesses, FMCG manufacturers, agricultural companies and manufacturers across the country. Its current clients include OmniRetail, Jumia, M-KOPA and Dangote. Highlighting the diverse range of businesses that use its solutions for their logistics needs.
A preference for enterprise-level entities, typically high-value clients who commit to 12- to 24-month contracts for small businesses, has benefited Renda’s business. The CEO claims that, for example, the startup saw a 450 percent year-over-year increase in its revenue, in addition to turning a profit. “It’s not something we did overnight because we had to build those relationships and the infrastructure around that. But the good thing is that we have built a solid management and leadership team with experience in well-invested logistics and e-commerce startups.
Renda’s revenue model revolves around five key drivers: storage, fulfillment, vehicle booking, delivery and cash collection. For storage, clients pay on a square meter or per year basis. Complementary services are charged for each item processed. Car booking charges a daily fee. The delivery amount is paid per deliveree, and the cash collection fee is based on a percentage of the cash collected.
Learning from experience in logistics
Logistics is inherently challenging, particularly in Africa, due to its fragmented and informal nature. Before logistics platforms came along, businesses with logistics needs had to rely on informal warehouse or delivery agents, most of whom offered solutions in the middle or last mile.
According to Onaboye, such businesses initially used these services separately but They have realized that they are better off with a solution that offers fulfillment beyond the middle or last mile and integrates all aspects of their logistics operations over time. Haul247, Amitruck, and Leta are similar providers across Africa.
“Our goal is to simplify the process by providing a comprehensive platform for businesses to access all the services they need without involving multiple providers to expand across Nigeria and Africa. This is a difficult task. “Yes, but once we establish a solid platform and master the aggregation model, scaling becomes much easier,” said the CEO, who noted that such platforms The complexity of construction is also a pitfall for Renda.
The logistics platform has third-party teams that manage storage and fleet operations. He is responsible for the onboarding, verification, quality assurance, monitoring and evaluation processes of Renda’s storage and delivery partners. In addition, Onaboye draws from his background of owning a verification company that provides background check services. To assist in this process.
After these checks are completed, Renda’s partners and drivers can manage their operations on dedicated apps and dashboards. The startup also provides apps for users and in-house admin purposes.
As the startup enters the next phase of growth, it plans to introduce an embedded finance product for its partners, especially drivers. The product will allow drivers to access weekly loans, which will be deducted from their payments. Onaboy says the app-based service will cater to drivers’ immediate financial needs, such as vehicle repairs. According to the CEO, health insurance and fuel assistance are other services in the pipeline for Renda’s drivers. He also said the startup plans to use AI to automate processes such as helping partners save on logistics costs and optimize routes.
The idea for Renda came after Onaboy saw the inventory and delivery challenges a friend faced when starting a business selling items from his home. Since its inception, the startup has supported over 500 businesses and reached over 100,000 customers across 15 states in Nigeria. Renda, which claims to have processed more than 250,000 orders, expects its expansion into Kenya in late 2023 to serve as an entry into other East African markets.
Joining forces with Renda as an investor is a strategic move for us. Renda’s technology solution addresses a critical need in the African manufacturing and e-commerce ecosystem, offering seamless access to fulfillment infrastructure,” said Maya Horgan Famudo, Founder and Partner at Ingressive Capital. We are particularly impressed with their track record of empowering businesses to thrive in this market and finance their businesses from the start. With the current high inflation and skyrocketing costs for shipping and storage, there has never been a better time for Randa. We are redoubling our focus on markets and solutions that promote trade and strengthen African currencies by facilitating exports.
Credit : techcrunch.com