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FEATURE STORY November 1, 2018

Investors Take Notice as Start-Up Sendy Disrupts Last-Mile Logistics in Kenya

In fall of 2017, Sendy participated in infoDev’s XL Africa accelerator program and concluded a $2 million round of funding.

This feature story is an outcome of infoDev, a multi-donor program administered by the World Bank Group, with a focus on entrepreneurs in developing economies.

This story was originally published on March 7, 2018. 

Since its launch in 2015, Sendy has quickly grown into one of Africa’s top start-ups to watch and garnered attention from several investors. To date, the company has raised over $3 million in equity funding and has begun planning its expansion. Sendy’s platform works similarly to a taxi dispatch app, but focuses on moving packages instead of people. 

Last fall, Sendy participated in infoDev’s XL Africa accelerator program and concluded a $2 million round of funding.

It started as “a fun project”

Three years ago, many Nairobi residents kept a long list of their favorite motorcycle taxis, or boda bodas.Sendy’s original app would show you where boda drivers were located around the city and provide you with their numbers.

In 2014, Sendy founders Meshack Alloys, Don Okoth, and Evanson Biwott decided to enter PivotEast, a mobile start-up competition sponsored by infoDev. At the time, they thought, “If we win the transport category of PivotEast, then we’ll consider doing this. If we don’t, then that was a fun project for two months.” They won.

The Sendy team knew Malaika Judd through mLab East Africa (now known as the iHub), an infoDev-supported innovation hub in Nairobi, and convinced her to join as the fourth co-founder.

From Digital Phonebook to Last-Mile Logistics

Before Sendy, Alloys, Okoth, and Biwott had built a tracking system for a bus company, which sent an SMS alert to business owners when their package had arrived at its destination. For example, a passenger bus from Nairobi to Mombasa would also carry packages in its cargo space, but recipients would have to wait at the bus park. This system made it easier to inform clients that the bus had arrived.

“These intra-city bus companies were making more money from moving packages than they do from moving people,” Judd explained.

After the bus company launched the SMS system, their customers were appreciated the service, but were willing to pay even more to have the packages delivered to their office.

Judd explains, “Given the time and cost of getting to [downtown] and back, ultimately it was cheaper to pay for a last-mile delivery service.”

As the team hammered out the details of their business plan, they reflected on this experience and realized that they had overlooked the package delivery market. 

From personal experience, they knew about the inherent risks of theft, so their first pivot was to focus on building Kenya’s most trusted platform for all types of deliveries.

Judd explained their current business model, “We work with partners, which means we don’t own any assets. We don't pay salaries to any drivers. We connect drivers with vehicles to people who want to do deliveries. And for facilitating that connection, we take a 20% commission on every delivery.”

Creating markets, changing behaviors

Since Sendy first launched, it’s gotten much easier for them to recruit drivers, as more of them have smartphones and have heard about Sendy.

Sendy has also benefited from the success of taxi dispatch apps in Kenya — Taxify, Mondo Rides, Little Cab, MaraMoja, and, of course, Uber.

“They've completely changed the taxi market. Everyone has moved to an app on their phone and now expects a taxi within five minutes. So now, if you ask someone to have a completely different experience with a delivery service, they get super-frustrated that it's not as convenient,” Judd said.

“When we first launched, we had to do a lot of things to change behaviors. Now, I can walk into a sales pitch with a business individual and say ‘Do you use Uber? Do you use Taxify? Oh, great! We’re similar to them, but we move packages instead of people.’”

“It instantly changes their mindset and puts them in the context of ‘I know how this works and I like Uber. I like Taxify. I think I’m going to like Sendy!’”

Sendy has moved beyond motorcycles and now offers deliveries by van or truck as well. Sendy currently has 40 employees; its network includes over 50,000 users, 3,000 businesses, and 1,000 drivers; and they’ve grown consistently around 15% month-on-month.

Their app not only helps SMEs save money on shipping, but has become a lucrative opportunity for drivers. “We have some drivers on our platform that make a 100,000 Kenyan shillings/month, that’s $1,000. When you work for a traditional courier company, you average around $150. And if you work as a boda boda driver, maybe you average between $250-300,” Judd said.

It takes a village to raise a start-up

Judd reflected on the value of having a start-up community during the early stages of building a company.

“mLab did an excellent job of bringing together really early stage entrepreneurs, before there’s really a company,” she said. “XL Africa did an excellent job of bringing together 20 start-ups from across Africa who were all at a similar stage as Sendy, which is Series A fundraising.

“We could sit around a table and talk about issues that we’ve had with the government or issues that we’ve had with clients not paying us. And you get 20 perspectives on how to handle such a challenge — with different cultural understandings and creative ideas.”

As Sendy continues to grow, Judd and her team have ambitious plans for the future. “In the coming years, we will be expanding the portfolio of modes of transportation that we work with,” Judd said, “and then expanding our reach regionally, so that we're not just moving goods across Kenya, we're moving goods across Africa.”