Nigerian e-commerce firm, Sendbox receives $1.8m in seed funding
Sendbox, a Nigerian peer-to-peer distribution network for social commerce, has raised $1.8 million in a seed round to help it grow. 4DX Ventures, Enza Capital, FJLabs, and Golden Palm Investments led the round, which also included Flexport and Y Combinator.
Following a pre-seed round led by Microtraction and 4DX Ventures in 2018, the company received a $125,000 investment from Y Combinator and an undisclosed amount from Microtraction, bringing its total funding to about $2 million.
The new fund is expected to enable the platform to further digitise deliveries for African small and medium-scale enterprises (SMEs) through its delivery management platform, which aggregates logistics providers and enables tracking.
Sendboxwas chosen for the investment because of its growth and the service it provides to the logistics industry, according to Walter Baddoo, co-founder and general partner of 4DXVentures. “African e-commerce is expanding at a rate that no one could have expected a decade ago, necessitating creative solutions to keep logistics and fulfilment capabilities up to date.” We’re not only happy with Sendbox’s 300% year-over-year growth since its launch, but we’re also excited to see the market potential increase, with over 40 million Nigerian SMEs and a projected industry value of $45 billion for social and e-commerce on the continent by 2025.”
For merchants and people running microbusinesses, obtaining suitable logistical services has proven to be a difficult task. Sendbox delivers packages locally in Nigeria as well as internationally to over 200 countries. It has touched over 10,000 retailers since its inception in 2018, as over 10,000 Nigerian SMEs have sent 200,000 products using Sendbox to date, saving an average of 30-40% on each item by avoiding the need to interact with multiple logistics companies. Within Lagos, sandbox delivers orders the next day, while national deliveries take three to five days, and overseas shipping takes between five to seven days.
Sendboxclaims it wants to assist these businesses (SMEs) in fulfilling their e-commerce obligations. Commenting on Sendbox’s fundraise and growth ambitions, Mr Emotu Balogun, CEO and co-founder of Sendbox said, “No matter where in the world customers are, we want African SMEs to be able to reach them.
“Deliveries in Lagos, Abuja, Port Harcourt and Ibadan have made up a large proportion of business for our domestic merchants. On top of that, affordable access to the UK, EU, US, and Canada has created an opportunity to sell products to hundreds of millions of previously unreachable buyers.
“With this fundraised, we aim to support more and more SMEs and help them grow both locally and internationally, scaling alongside them as we connect African merchants with a global community of consumers.”
According to the company, the new funds will be used to extend the company’s activities in other West African countries, strengthen the development of its product line, and hire fresh talent. The company also revealed that it will focus on financing and payments, followed by e-commerce and marketplace integrations across West Africa and beyond. The company will also be able to provide a solution for merchants who do not have the necessary volume to qualify for reduced delivery prices.
Emotu Balogun, founded Sendbox nine years ago (2016) while running his previous venture called Traclist. The now-defunct organization was a Nigerian fashion marketplace that assisted small businesses in selling their wares online, however it fell into scale challenges before shutting down, as most of its merchants were unable to complete their orders despite the presence of a few logistics businesses in the nation.
In an interview, Balogun noted that there wasn’t a technology that allowed us to swiftly assemble service providers onto a platform and integrate them into our marketplace. “It would have provided us the flexibility to decentralize our marketplace’s operations if it had existed,” he says.
Balogun later realized that other marketplaces were experiencing the same issue. Once these platforms had gotten customers to buy products, the next puzzle was figuring out how to assist with logistics. Because no logistics provider was efficient enough to help Traclist with its fulfilment needs, Balogun and Olusegun Afolahan co-founded Sendbox in 2016; the company was fully launched two years later.
Balogun made it known that Sendbox’s revenue and transactions have grown 300% year over year in the last three years. And to continue that exponential growth, Sendbox will expand its product capabilities and geographical presence as well.
“For us, our vision is to become the e-commerce operating system for African merchants and logistics is the first entry point for the company,” he added.
The Sendbox application is available to both iOS and Android users, via a web application, on Whatsapp, Facebook, Instagram and other e-commerce platforms, and through developer APIs, Sendbox is providing a single location to manage both local deliveries and international shipments to the European Union, UK, US and Canada.
While Sendbox has made several adjustments to its model and interaction with merchants and customers, its aim goal remains to provide e-commerce fulfilment for African merchants, starting from Nigeria.
“Sendbox wants to help small e-commerce merchants who sell directly to customers through their own online and offline channels with fulfilment,” said the chief executive giving a one-line pitch of the company.
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