Goodwell Investments has agreed to invest $2m in fast growing on-demand delivery platform Sendy in East Africa.

Sendy’s user-focused technology platform helps cut logistics costs by simply and transparently connecting individuals and businesses to third party delivery drivers across Africa.

Sendy, headquartered in Nairobi, Kenya, was the first company to offer an on-demand delivery platform in the region and while it currently covers Kenya, Uganda and Tanzania, it plans to cover all East Africa in the near future.

The investment will move the company closer to achieving its mission of improving the access of lower income groups to good quality basic products and services, at much lower prices.

Today in East Africa, logistical costs account for a staggering 40%-plus of the consumer price, due to poor infrastructure, limited use of technology, inefficient capacity utilization and a lack of pricing transparency.

Food prices and prices of household goods and health services are therefore heavily inflated, negatively affecting the standard of living of at least 170 million people in East Africa.

Sendy, which launched in Nairobi, Kenya, in 2015, is addressing this social issue with a state-of-the art platform that matches cargo and parcel owners to third party transporters, so taking the friction out of supply and demand.

The on-demand platform features a mobile app and website to connect individuals and small businesses to a network of third-party transporters – motorbikes, vans and pickup trucks. This optimizes the use of vehicles that were already on the road.

Sendy’s primary revenue stream is a per-delivery commission charged to the logistics partner.

In its first year, Sendy completed 12,000 deliveries, had 27 drivers on its platform and revenues totaled $45,000.

In the three years since, the company has grown fast. It has now completed over 180,000 deliveries, has more than 700 drivers on its platform and posted revenues of $1.5m in 2018.  

Despite this, the growth potential remains massive. As well as seeking to grow through geographic expansion, Sendy is also exploring new distribution models.

For example, the company is piloting a so-called ‘agency model’ in which packages are aggregated at a central collection point before delivery to the customer. This increases efficiency and improves margins.

Sendy provides a large, positive social impact for people in the region living on low and middle incomes. Reducing logistics costs for manufacturers and SMEs helps reduce product prices and makes goods more widely affordable. Sendy also provides a stable income for drivers on the platform.

“Sendy is already a game-changer in the logistics sector,” said Joel Wanhoji, Senior Investment Manager of the Goodwell East Africa team.

“Its cutting-edge technology brings efficient capacity utilization and transparent pricing to a sector that was previously seen as being beyond change. Sendy’s platform is enabling savings of more than 20% on the logistics costs, which makes Sendy a good fit within Goodwell’s uMmunthu mandate of providing basic goods and services to people on low and middle incomes – the majority.”