Renda, which provides order fulfillment for businesses in Africa, takes in $1.9M | TechCrunch

The logistics industry in Nigeria, like any informal sector, is plagued by poor infrastructure and other inefficiencies, making it difficult for businesses – both large and Small – To move and store goods.

Many startups have tackled middle-mile and last-mile delivery challenges, but one untapped area is providing end-to-end fulfillment solutions. RandaThe three-year-old startup fills this gap by simplifying order fulfillment and retail delivery for businesses in Africa. It has secured a pre-seed round of $1.9 million, the money will be used to improve its offerings; To expand to more cities in Nigeria and Kenya, two markets where it is currently present; And expand your 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, Founders Factory Africa, Magic Fund, Golden Palm Investments, Reflect Ventures, and Vastly Valuable Ventures. Additionally, Founders Factory Africa and Seedfi contributed $600,000 in debt funding.

The startup aggregates and provides access to an end-to-end infrastructure that optimizes 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 ope onaboySpeaking with TechCrunch, he explained that Renda uses an asset-light approach. Similar to companies like Flexport and ShipBob, Renda does not own assets. Instead, Renda partners with a variety of providers in the chain – from warehousing and other storage companies to companies making deliveries on trucks and bikes – and companies that need to take payments because so many transactions are made in cash – each. Owning a fleet of assets allows for tailored solutions to customer needs.

According to Onaboy, this approach has helped Renda build an extensive partnership network that has helped its customers expand rapidly across the country. The platform has over 300 warehousing and storage partners, over 3,000 delivery assets including trucks, vans and bikes, and over 2,000 cash collection partners.

,The beauty of Renda is that we do not own any property. We do not own any delivery or warehousing assets ourselves. Instead, we leverage existing resources across the country. We aggregate 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. Bimbo onaboy. “Similarly, we onboard delivery assets, including vans, trucks and bikes, that may be sitting idle and make them available to businesses to manage deliveries. Whether businesses want to handle their own deliveries or delegate them to us, Renda provides the platform to efficiently streamline operations.

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, agriculture companies and manufacturers across the country. Its current customers include OmniRetail, Jumia, M-Kopa and Dangote. Highlighting the diverse range of businesses that use its solutions for their logistics needs.

Prioritizing enterprise-level entities, typically high-value customers who commit to contracts lasting 12 to 24 months, compared to smaller businesses, has benefited Renda’s business. For example, the startup saw its revenue grow 450% year-on-year, in addition to achieving profitability, the CEO claims. ,It’s not something we did overnight because we had 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 said.

Renda’s revenue model revolves around five key drivers: warehousing, fulfillment, vehicle booking, delivery and cash collection. Customers pay for storage on a per square meter or per year basis. Fulfillment services are charged for each item processed; There is a daily fee for vehicle booking; Delivery is charged per item delivered, and a cash collection fee is based on a percentage of cash collected.

Learning from logistics experience

Logistics is inherently challenging, especially in Africa, due to its fragmented and informal nature. Businesses with logistics needs previously had to rely on informal warehousing or delivery agents before the advent of logistics platforms, most of which offered solutions in the middle or last mile.

According to Onaboy, such businesses initially used these services separately but They have realized that they are better off with a solution that delivers satisfaction beyond the middle or last mile and integrates all aspects of their logistics operations over time. haul247, unfriendlyAnd lying down There are similar providers throughout Africa.

“Our goal is to simplify the process for businesses by providing a comprehensive platform to access all the services they need to expand in Nigeria and Africa without involving multiple providers. It is a challenging task, but once we establish a solid platform and master the aggregation model, scaling becomes much easier,” said the CEO, who added that building such a platform The complexity of is also a moat for Renda.

Logistics platforms have third-party teams that manage warehousing and fleet operations. He is responsible for the onboarding, verification, quality assurance, monitoring and evaluation processes of Renda’s storage and distribution partners. Additionally, Onaboy draws inspiration from his background of owning a verification company that provides background check services To help in this process.

Once these checks are completed, Renda partners and drivers can manage their operations on dedicated apps and dashboards. The startup also offers the app for consumers and in-house admin purposes.

As the startup moves into the next phase of growth, it plans to offer an embedded finance product for its partners, especially drivers. This product will allow drivers to receive weekly loans, which will be deducted from their payments. Onaboy says that this service provided on the app will meet the immediate financial needs of drivers like vehicle repairs. According to the CEO, health insurance and fuel assistance are other services that Renda has in the pipeline for its drivers. He also said the startup plans to use AI to automate its processes, such as helping partners save logistics costs and optimize routes.

The idea for Renda came when Onaboy noticed that a friend faced inventory and delivery challenges when starting a business selling goods from his home. Since its launch, the startup has helped 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 to expand into Kenya in late 2023 as it moves into other markets in East Africa.

“Joining 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, providing seamless access to fulfillment infrastructure,” said Maya Horgan Famodu, Founder and Partner at Ingressive Capital. “We are particularly impressed by their track record of helping businesses thrive in this market and strengthening their financial position from the start of their business. With the current high inflation and skyrocketing prices for shipping and storage, there has never been a better time for Renda. We are doubling our focus on markets and solutions that boost commerce and strengthen African currencies by facilitating exports.