Like any informal sector, Nigeria’s logistics industry struggles with poor infrastructure and other inefficiencies, making it challenging for businesses of all sizes to transport and store goods. Many firms have addressed middle- and last-mile deliveries, but end-to-end fulfillment remains unexplored. Renda, a three-year-old company, simplifies order fulfillment and retail distribution for African companies. It raised $1.9 million in a pre-seed round to develop its products, expand into other locations in Nigeria and Kenya, and expand its relationship network.
Pan-African early-stage VC Ingressive Capital led the $1.3 million equity round. Reflect Ventures, Techstars Toronto, Magic Fund, Golden Palm Investments, and Vastly Valuable Ventures all participated. Founders Factory Africa and SeedFi provided a $600,000 loan.
The firm merges and provides companies with end-to-end order fulfillment infrastructure. Their technology lets them access flexible storage, monitor and manage inventory, process and fulfill orders, manage deliveries and refunds, and receive and reconcile cash on delivery in real time.
CEO Ope Onaboye stated that Eltrys Renda is asset-light. Renda, like Flexport and ShipBob, lacks assets. Instead, Renda partners with warehousing, storage, truck and bike delivery, and payment processing companies, since so many transactions are cash-based, to provide customized solutions without owning a fleet.
Onaboye says this strategy has helped Renda establish a large partnership network, allowing its customers to grow quickly throughout the country. The network includes over 300 warehouse and storage partners, 3,000 delivery vehicles, vans, and motorcycles, and more than 2,000 cash collection partners.
The beauty of Renda is that we own no assets. We have no delivery or storage equipment. Instead, we rely on national resources. We link unused storage facilities and warehouses with companies that require storage, said the CEO, who launched the firm with his sister, Bimbo Onaboye. For delivery management, we also take on idle delivery vans, trucks, and motorcycles and make them accessible to clients. Renda streamlines processes, whether firms manage their own delivery or entrust them to us.”
Customers have changed since Renda launched in 2021. Starting with small enterprises, the logistics firm today services e-commerce, FMCG, agricultural, and manufacturing countrywide. Its diversified logistical clients include OmniRetail, Jumia, M-KOPA, and Dangote.
Renda’s company benefits by prioritizing enterprise-level companies, usually higher-value customers with 12- to 24-month contracts, above small enterprises. According to the CEO, the firm was profitable and achieved 450% sales growth year-over-year. We had to establish the connections and infrastructure behind it, so it took time. The good news is that we have a strong management and leadership team from well-funded logistics and e-commerce businesses, he said.
Storage, fulfillment, vehicle booking, deliveries, and cash collection drive Renda’s business model. Clients pay per square meter or year for storage. Deliveries cost per item, fulfillment costs per item, vehicle booking costs per day, and cash collection fees are a proportion of the collected cash.
Logistics lessons
African logistics is fragmented and informal, making it difficult. Before logistics platforms, most of which provided middle- or last-mile solutions, businesses with logistical requirements used informal storage or delivery agencies.
Onaboye says such organizations first employed these services independently, but now they want a system that goes beyond the middle or last mile and combines all logistical processes. In Africa, Haul247, Amitruck, and Leta operate similarly.
“We aim to simplify the process for businesses by providing a comprehensive platform to access all the services they need to expand across Nigeria and Africa without multiple providers. Renda’s CEO remarked that creating a robust platform and mastering the aggregation model is difficult, but scaling gets easy.
Third-party teams run storage and fleet operations on the logistics platform. Their responsibilities include onboarding, verification, quality assurance, monitoring, and assessing Renda’s storage and delivery partners. Onaboye also uses his background check firm ownership to aid with this process.
Following these tests, Renda partners and drivers may use specialized applications and dashboards to oversee operations. The company offers both consumer and in-house admin applications.
The business wants to offer drivers an integrated financing solution as it grows. This product will let drivers borrow weekly, deducting from their rewards. Onaboye said this smartphone service would assist drivers with urgent cash demands, such as car maintenance. Renda is also offering drivers health insurance and fuel assistance, according to the CEO. He also claimed the business would automate activities like logistics cost reduction and route optimization using AI.
Onaboye saw a friend’s inventory and delivery issues while starting a home-based business, which inspired him to create Renda. Since its inception, this firm has assisted over 500 businesses and reached over 100,000 clients in 15 Nigerian states. Renda, which has handled over 250,000 orders, anticipates its late 2023 expansion into Kenya to open up additional East African markets.
“Investing with Renda is strategic for us. The African manufacturing and e-commerce ecosystems require Renda’s technology to seamlessly connect fulfillment infrastructure, said Ingressive Capital founder and partner Maya Horgan Famodu. We like their ability to help firms succeed in this industry and in financials from the outset. Renda’s performance has never been better, thanks to high inflation and rising shipping and storage costs. We are doubling down on markets and solutions that boost trade and African currencies by enabling exports.”
