The logistics industry in Nigeria, like any informal sector, struggles with poor infrastructure and other inefficiencies, making it difficult for businesses – each large and small small – for moving and storing goods.
Many startups have tackled mid- and last-mile delivery challenges, but one untapped area is providing end-to-end success solutions. Income, a three-year-old startup, fills this gap by simplifying order success and retail distribution for businesses in Africa. He earned a $1.9 million preseason round, which is money he’ll use improve your offer; expanding to more cities in Nigeria and Kenya – two markets where it is currently present; and develop your partner network in these markets.
Ingressive Capital, an early-stage pan-African VC fund, led the $1.3 million equity portion. Other participants included Techstars Toronto, Magic Fund, Golden Palm Investments, Reflect Ventures and Vastly Valuable Ventures. Additionally, Founders Factory Africa and SeedFi provided $600,000 in debt financing.
The startup aggregates and provides access to comprehensive infrastructure that optimizes order success for enterprises. Its solution enables them to access flexible storage, monitor and manage inventory, process and fulfill orders, manage deliveries and returns, and receive and settle money on delivery in real time.
CEO Ope Onaboyein an interview with TechCrunch, he explained that Renda uses an asset-based approach. Like companies like Flexport and ShipBob, Renda has no assets of its own. Instead, Renda works with a number of suppliers in the chain – from warehouses and other storage companies, to those delivering by truck and bike, in addition to companies that have had to simply accept payments because many transactions are done in money – enabling solutions tailored to each customer’s needs without having to own a fleet of assets.
According to Onaboye, this approach has helped Renda build an extensive partner network, enabling its clients to rapidly expand across the country. The platform has over 300 warehousing and storage partners, over 3,000 delivery partners including trucks, vans and bicycles, and over 2,000 money pickup partners.
“The beauty of Renda is that we don’t own any assets. We do not own any delivery or warehousing assets ourselves. Instead, we leverage existing resources across the country. We aggregate warehouse space and warehouses that may be unused and connect them with companies that need storage solutions,” said the President, who founded the company with his sister. Little Onaboye. “We are similarly onboarding delivery assets, including vans, trucks and bikes that could be sitting idle, and making them available to businesses to administer deliveries. Whether companies wish to handle their deliveries or outsource them to us, Renda provides a platform to efficiently streamline operations.
Rendy’s customer base has evolved since its launch in 2021. The logistics startup initially served small businesses and now serves e-commerce companies, FMCG manufacturers, agricultural companies and manufacturers across the country. Its current clients include OmniRetail, Jumia, M-KOPA and Dangote, highlighting the diverse range of companies using its solution for their logistics needs.
Prioritizing enterprise-level players, typically higher-value customers who commit to 12- to 24-month contracts, over small businesses has benefited Renda. For example, the startup, in addition to achieving profitability, recorded a 450% year-on-year increase in revenues, says the president. “We didn’t do it overnight because we needed to build relationships and infrastructure around it. But the good thing is that we have built a solid management and leadership team with experience in well-capitalized logistics and e-commerce startups,” he added.
Renda’s revenue model is based on five key drivers: warehousing, order success, vehicle reservations, deliveries and money collection. For storage, customers pay per square meter or per 12 months. Fulfillment services are charged per item processed; vehicle reservations involve a every day fee; Delivery fees are charged per item delivered and money collection fees are charged based on a percentage of money collected.
Learning from logistics experiences
Logistics is an inherent challenge, particularly in Africa, on account of its fragmented and informal nature. Businesses with logistics needs previously needed to rely on informal warehousing or delivery agents before the advent of logistics platforms, most of which offered middle- or last-mile solutions.
According to Onaboye, such companies initially used these services individually, but realized that they’d be higher off using a solution that ensures order success beyond the middle or last mile and integrates all features of their logistics operations over time. Haul247, Amitruck and Leta are similar suppliers across Africa.
“Our goal is to simplify the process for businesses by providing a one-stop platform to access all the services needed to expand in Nigeria and Africa without involving multiple vendors. This is a difficult task, but once we build a solid platform and master the aggregation model, scaling will become much easier,” said the CEO, noting that the complexity of building such a platform is also a moat for Renda.
The logistics platform has external teams that manage warehouse and fleet operations. They are responsible for the implementation, verification, quality assurance, monitoring and evaluation processes of Renda’s warehousing and delivery partners. Additionally, Onaboye gains expertise from owning a verification company that gives background check services to assist with this process.
Once these checks are accomplished, Renda partners and drivers can manage their operations using dedicated apps and dashboards. The startup also provides applications for consumers and for internal administrative purposes.
Entering the next phase of development, the startup plans to introduce an embedded financial product for its partners, especially drivers. This product will allow drivers to access weekly loans that can be deducted from their paychecks. Onaboye says the app-based service will address drivers’ most pressing financial needs, similar to vehicle repairs. According to the CEO, medical health insurance and fuel assistance are other services that Renda plans for its drivers. He also said the startup plans to make use of artificial intelligence to automate its processes, similar to helping partners save on logistics costs and optimize routes.
The idea for Renda got here about when Onaboye noticed the inventory and delivery challenges a friend was facing when starting a business selling items from her home. Since its inception, the startup has helped over 500 businesses and reached over 100,000 customers across 15 states in Nigeria. Renda, which says it has fulfilled greater than 250,000 orders, expects its expansion into Kenya in late 2023 to function an entry into other markets in East Africa.
“Joining forces with Renda as an investor is a strategic move for us. Renda’s technology solution addresses a critical need in African manufacturing and e-commerce ecosystems by offering seamless access to order fulfillment infrastructure,” said Maya Horgan Famodu, founder and partner at Ingressive Capital. “We are particularly impressed with their track record in helping businesses thrive in this market and financially from the start. With current high inflation and skyrocketing shipping and storage prices, there has never been a better time for Renda. We are even more focused on markets and solutions that promote trade and strengthen African currencies, making exports easier.”