Logistics startup, Renda secures $1.9m pre-seed to expand across Nigeria and Kenya

A Nigeria-based fulfilment startup operating in the logistics space, Renda, has secured $1.9 million funding in a pre-seed round according to a TechCrunch report. The raise consists of $1.3 million in equity funding and a further $600,000 in debt financing. 

The equity portion of the fund raise was led by pan-African early-stage VC company, Ingressive Capital. Other participants in the equity part included Techstars Toronto, Magic Fund, Golden Palm Investments, Reflect Ventures and Vastly Valuable Ventures. Founders Factory Africa and SeedFi were the participants who contributed $600,000 in the debt financing side of things.

The startup said the fund would be invested in improving its offerings while fueling its expansion into more cities across Nigeria and Kenya, the two markets where it currently operates. It also wants to invest the fund into growing its partnership network across its markets.

renda providing logistics fulfilment for businesses

Founded in 2021 by CEO, Ope Onaboye and his sister, Bimbo, Renda simplifies order fulfillment and retail distribution for businesses across Africa by aggregating and providing access to end-to-end infrastructure that optimizes order fulfillment for them. 

While not owning any infrastructure of its own, the CEO explained that his startup uses an asset-light approach which involves partnering with various providers in the value chain — from warehousing and other storage companies through to those offering deliveries on trucks and bikes, and the companies needed to take payments since so many transactions are done in cash. This allows the startup to offer solutions tailored to each client’s needs without owning much of these assets.

“The beauty of Renda is that we do not own any assets. We don’t 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 needing storage solutions. Similarly, we onboard delivery assets, including vans, trucks and bikes, that may be sitting idle and make them available to businesses for managing deliveries. Whether businesses want to handle their deliveries or entrust them to us, Renda provides the platform to streamline operations efficiently,” the CEO said.

The startup said its model allows them to access flexible storage, monitor and manage inventory, process and fulfil orders, manage deliveries and returns, and receive and reconcile cash on delivery in real-time. This approach has helped it build an extensive partnership network enabling its clients to expand quickly across the country. The platform has over 300 warehousing and storage partners, more than 3,000 delivery assets, including trucks, vans and bikes, and 2,000+ cash collection partners.

Although Renda started off serving small businesses, its customer base has, however, changed over the years. The logistics fulfilment startup now serves e-commerce businesses, FMCG manufacturers, agriculture companies and manufacturers nationwide. It says its current clientele includes OmniRetail, Jumia, M-KOPA and Dangote, highlighting the diverse range of businesses that use its solution for their logistics needs.

Its business model has also evolved and now hinges on prioritizing enterprise-level entities over small businesses. These enterprise-level organisations are typically higher-value clients who commit to contracts lasting 12 to 24 months over small businesses. 

To this end, the CEO claims the startup has since achieved profitability, while also witnessing 450 per cent year-on-year growth in its revenue. Speaking on these achievements, Ope said they didn’t happen overnight.

 “This is not something we did overnight because we had to build those relationships and infrastructure around it. But the good thing is that we’ve built a solid management and leadership team with experience from well-capitalized logistics and e-commerce startups,” he explained.

He also explained that Renda’s revenue model revolves around five key drivers: storage, fulfilment, vehicle booking, deliveries and cash collection. For storage, clients pay based on square meters or per year. Fulfilment services are charged per item processed; vehicle booking incurs a daily fee; deliveries are charged per item delivered, and cash collection fees are based on a percentage of the collected items.

The startup also provides its users with a platform and a dashboard where they can access the all-in-one offerings and activities. He noted that the platform has third-party teams that manage storage and fleet operations. But Renda is responsible for the onboarding, verification, quality assurance, monitoring and evaluation processes of its storage and delivery partners.

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

Speaking about how the startup has been able to scale to this point, CEO Ope Onaboye said it was hard work at first but once they established a solid platform, scaling became easier.

“Our goal is 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 engaging multiple providers. It’s a challenging task, but once we establish a solid platform and master the aggregation model, scaling becomes much easier,” he said.

See also: Here are the top 5 tech-enabled logistics companies in Africa