Sendy, a Nairobi-based on-demand delivery platform has secured $2-million in funding from Dutch impact investor Goodwell Investments, the latter announced in a post on its website this week.

The startup, which was founded in 2014, offers package delivery and logistics services. Using a mobile application, customers can connect with motorcycle riders, drivers of vans and pickup trucks, to send packages and documents across the country.

In the last three years, Sendy has completed over 180,000 deliveries with 700 drivers on its platform, the Amsterdam-based investor said. The startup’s primary revenue stream is a per delivery commission charged to the logistics partner and in 2018, it recorded revenues of $1.5 million.

Currently operating in Kenya, Uganda, and Tanzania, the firm plans to cover all of East Africa’s markets in the near future. The latest funding from Goodwell will be used towards achieving that goal.

Sendy drivers. Photo credit: Venture Burn

While the startup taps the growth potential in the region, it would simultaneously be improving access to basic products and services – at significantly lower prices – for lower-income groups.

By simply connecting individuals and businesses to third-party delivery drivers, Sendy is helping to reduce logistical costs which account for over 40 percent of the consumer price in East Africa today.

Poor infrastructure, limited use of technology, inefficient capacity utilization and a lack of pricing transparency in the region all contribute to the largely inflated prices of foods, basic items, and health services.

The startup is addressing this issue, removing the friction from supply and demand. This enables savings of over 20 percent on the logistics costs according to Joel Wanhoji, the East Africa senior investment manager at Goodwell.

With a reduction in logistics costs for local manufacturers and small businesses, spillover social benefits of the platform include reduced product prices and more widely affordable goods. It also serves as a stable source of income for drivers on the platform.

“Sendy is already a gamechanger in the logistics sector,” said Wanhoji. “Its cutting-edge technology brings efficient capacity utilization and transparent pricing to a sector that was previously seen as being beyond change.”

In addition to its cost-saving service, Sendy is also exploring new distribution models such as the “agency model” which is in the pilot phase. The new model involves the aggregation of packages at a central collection point before they are delivered to the customer, thereby increasing efficiency and improving margins.

Sendy was founded by Meshack Alloys, Malaika Judd, Evanson Biwott and Don Okoth. In November 2015, it became the first startup to receive funding from the $1 million Safaricom Spark Fund after which it secured $2 million in investment in 2017.

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