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Sendy, an on-demand delivery services platform operating in Kenya has completed a Series A investment round said to be around $2m according to sources, led by DOB Equity alongside CFAO, member of the Toyota Group, and other private investors to enable it increase its platforms’ service offering and team, as well as expand into East Africa.
Sendy will use the cash to add more delivery vehicles to their platform, increasing their coverage area, expanding the sales and technology team, and preparing for future expansion into neighboring countries in East Africa. The deal was sealed October 2017.
According to Meshack Alloys, CEO of Sendy, “When we started Sendy in 2014 we saw the opportunity to fill a gap in the logistic services sector in Nairobi. Ever since, we have been able to provide affordable and high quality services through our Driver partners, and expand our client base across sectors and leading corporates. With the support of DOB Equity and CFAO we look forward to sustaining our high growth and outstanding services to our current and new clients over the coming years.”
Though highly fragmented, informal and highly inefficient, DOB Equity sees so much potential in the current logistics sector in Kenya –worth US$10bn. Poor infrastructure, limited technology and expertise, a high degree of bureaucracy, and potential security risks make transport costs in East Africa among the highest in the world.
Sendy aims to solve that. Focusing on the sub-sector of packages and goods deliveries, Sendy offers an app-based on-demand marketplace, connecting individuals and companies to delivery service providers, similar to ride-hailing companies like Uber – but focused on goods rather than passengers. As a result, it helps reduce inefficiencies in the market primarily by removing friction costs between matching customers and providers.
Sendy works with Partners to deliver tailor-made, efficient and affordable service using verified, trained drivers and automated order tracking. It offers customers a wide choice of types and sizes of vehicles, ranging from motorcycles to 28 ton trucks.
To grow the demand of its services in the region, Sendy tried its hands at taxi hailing, but got out as fast as it entered the market. This time, the firm will need to help or educate more vendors to set up online shopfronts like Shopify so that it powers their delivery and convenience. Trying its hands at eCommerce, like Safaricom did with Masoko might be a big mess and an embarrassment to the now dilligent team.
Brigit van Dijk – van de Reijt, CEO of DOB Equity says: “A well-functioning logistics sector is key to economic development and competitiveness. However it is often overlooked when analyzing and discussing the impact of investments.”
“Investments in agriculture or manufacturing are not sustainable if there is no efficient supply chain to get products out to the market. As such, DOB Equity is increasingly interested in investing in companies that look to solve economic inefficiencies throughout the supply chain. For example, we recently invested in Africa Logistics Properties, a developer of modern warehousing facilities across Africa.”
“Sendy targets a US$2bn market in East Africa. Rising consumer demand and increased connectivity, coupled with the rapid growth of e-commerce and demand for more instant deliveries is expected to further boost demand on Sendy’s platform,” said Hayo Afman, Portfolio Manager of DOB Equity.
“Across the globe we are seeing a similar rise of new tech-based logistics business models replacing traditional service offerings. To date, only a few sizeable players have emerged in Sub-Saharan Africa and Sendy is one of the most advanced new entrants in East Africa, giving the company a first-mover advantage to gain a significant share of the market.”
