Nigeria's logistics industry, like other informal sectors, suffers from poor infrastructure and other inefficiencies that make it difficult for businesses large and small to move and store goods. I am.
While many startups have tackled the challenges of middle- and last-mile delivery, one untapped area is providing end-to-end fulfillment solutions. Renda, a three-year-old startup, is filling this gap by simplifying order fulfillment and retail distribution for businesses in Africa. The company has secured a pre-seed round of $1.9 million, which will be used to improve its service. Expanding to more cities in Nigeria and Kenya, two of his current markets. Expand your partnership network across these markets.
Ingressive Capital, a pan-African early stage VC, led the $1.3 million equity portion of the round. Other participants include Techstars Toronto, Magic Fund, Golden Palm Investments, Reflect Ventures, and Vastly Valuable Ventures. In addition, Founders Factory Africa and SeedFi contributed his $600,000 in debt funding.
The startup aggregates and provides access to end-to-end infrastructure that optimizes order fulfillment for businesses. Its solutions allow you to access flexible storage, monitor and manage inventory, process and fulfill orders, manage deliveries and returns, and accept and reconcile cash on delivery in real-time.
In a conversation with TechCrunch, CEO Ope Onaboye explained that Renda takes an asset-light approach. Like companies like Flexport and ShipBob, Renda does not own any assets of its own. Instead, Renda works with a variety of people in the chain, from warehouses and other storage companies, to companies that deliver by truck and motorcycle, to companies that need to receive payments because so many transactions are done in cash. We partner with providers to provide solutions tailored to each customer's needs. Owning a large number of assets.
According to Onaboye, this approach has allowed Renda to build an extensive partnership network and allow its customers to quickly expand across the country. The platform has over 300 warehouse and storage partners, over 3,000 delivery assets including trucks, vans and motorcycles, and over 2,000 cash collection partners.
“The advantage of Renda is that we don't own any assets. We don't own any shipping or warehousing assets ourselves. Instead, we leverage existing resources across the country. We aggregate storage space 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 Bimbo Onaboi. “Similarly, we take idle delivery assets such as vans, trucks and motorcycles on board and make them available to businesses to manage their deliveries. No matter what, Renda provides a platform to efficiently streamline your operations.”
Renda's customer base has evolved since its founding in 2021. Initially serving small and medium-sized enterprises, the logistics startup now serves e-commerce companies, FMCG manufacturers, agricultural companies, and manufacturers across the country. Current customers include OmniRetail, Jumia, M-KOPA and Dangote, highlighting the diversity of companies using its solutions for their logistics needs.
Renda's business has benefited from prioritizing high-value customers with 12- to 24-month commitments over enterprise-level entities, typically smaller businesses. For example, the CEO claims that in addition to achieving profitability, the startup has also increased its revenue by 450% year-on-year. “This wasn't something we did overnight because we had to build relationships and infrastructure around it. But the good thing is that we have a well-capitalized logistics and electronics “We have built a strong management and leadership team with experience from trading start-ups,” he added.
Renda's revenue model revolves around five key drivers: storage, fulfillment, vehicle reservation, delivery, and cash collection. For storage fees, clients pay based on square meter or annual rate. Fulfillment services are charged per item processed. A daily fee is charged for vehicle reservations. Delivery fees are charged per item delivered and cash collection fees are based on the percentage of cash collected.
What I learned from my logistics experience
Logistics, especially in Africa, is inherently difficult due to its fragmented and informal nature. Until the advent of logistics platforms, most of which provide solutions in the middle or last mile, businesses with logistics needs had to rely on informal warehousing and delivery companies.
According to Onaboye, these companies initially used these services separately, but over time solutions that extend fulfillment beyond the middle or last mile integrate all aspects of logistics operations. I realized that it's better. Haul247, Amitruck and Leta are similar providers across Africa.
“Our goal is to simplify the process for businesses by providing a comprehensive platform that allows them to access all the services they need to expand across Nigeria and Africa without having to rely on multiple providers. This is a difficult task, but once you establish a solid platform and master the aggregation model, scaling becomes much easier,” said the CEO, adding that the complexity of building such a platform is He pointed out that it is also a moat for people.
The logistics platform has a third-party team that manages storage and fleet operations. They will be responsible for the onboarding, verification, quality assurance, monitoring and evaluation processes of Renda's storage and delivery partners. In addition, Mr. Onaboe draws on his background in running a verification company that provides background check services to assist in this process.
Once these checks are completed, Renda partners and drivers will be able to manage their operations with a dedicated app and dashboard. The startup also offers apps for consumer and internal management purposes.
As the startup moves into its next phase of growth, it plans to introduce embedded financial products for its partners, especially drivers. This product gives drivers access to weekly loans that are deducted from their payments. Mr Onaboye said the service offered on the app would address drivers’ immediate financial needs, such as vehicle repairs. According to the CEO, health insurance and refueling are among the services Renda has in place for its drivers. He also said the startup plans to leverage AI to automate processes, such as helping partners reduce logistics costs and optimize routes.
The idea for Renda was born when Onaboy noticed that a friend faced inventory and shipping challenges when he started a business selling products from his home. Since its launch, the startup has supported over 500 businesses and reached over 100,000 customers across 15 states in Nigeria. Lenda, which claims to have processed more than 250,000 orders, expects its expansion into Kenya at the end of 2023 to be its entry into other markets across East Africa.
“Partnering with Renda as an investor is a strategic move for us. Renda’s technology solutions address critical needs in Africa’s manufacturing and e-commerce ecosystems, and add to the fulfillment infrastructure. We provide seamless access,” said Maya Horgan Famodu, Founder and Partner at Ingressive Capital. “We are particularly impressed with their track record of helping companies grow in this market and finances from the start of their business. With the current high inflation and rising prices for transportation and storage, Renda There has never been a better time than now. We are redoubling our focus on markets and solutions that strengthen African currencies by facilitating trade and boosting exports.”