The Nigerian logistics space is a busy and increasingly well-funded one, but Lagos-based Dellyman believes it has the capacity to stand out from the crowd in spite of its relatively late entrance and smaller amounts of investment.
Launched in March 2019 but available to the public from January this year, Dellyman is a web and mobile logistics marketplace that aggregates logistics companies and their assets into a single platform so retailers and customers can easily arrange transportation of goods.
Founder and chief executive officer (CEO) Dare Ojo-Bello decided to build the company after he was unable to get a laptop purchased on a Friday delivered the next day so he could work over the weekend.
“I started investigating why everyone promises same-day delivery and yet not a single retailer or delivery company is able to keep this promise. The truth is same-day delivery is complex and tough,” he said.
“It is only an understanding of the deep problems faced by the market and service providers that can help increase the possibility of same-day or even next-day delivery.”
Those problems are multiple. Although the commerce industry is growing at a phenomenal rate across the world and in Nigeria, the logistics industry – a key driver of commerce – is bedevilled with insufficient assets, uneven spread of available assets, lack of robust technology, idle capacity, and a lack of regulation that leads to proliferation of logistics companies, poorly-maintained assets and a lack of consumer confidence.
“This is why we created Dellyman, the first logistics marketplace for aggregating logistics companies, their assets, services, service providers and sellers of goods,” Ojo-Bello said.
The startup’s solution aggregates logistics providers and assets, optimises customer access to logistics assets in real time, and delivers an on-demand delivery service.
“We offer a delivery infrastructure to retailers and e-commerce providers so they don’t need to own or invest in logistics assets, and guarantee safe and secured delivery with remedies for lost, misplaced or damaged packages,” said Ojo-Bello.
This “Uber for logistics” aggregation model matches customer pickup requests with riders within proximity to pickup location. Since its launch, Dellyman has onboarded about 400 logistics partners, with about 100 of them verified through a Know-Your-Customer (KYC) process.
“We plan to reach about 3,000 logistics companies fully registered and verified on the platform by the end of 2021,” Ojo-Bello said.
Good work so far, then, but Dellyman is playing catch-up. The Nigerian logistics sector is already a busy one, including the likes of kwik, MAX.ng, and Kobo360, all of whom are extremely well-funded. Dellyman, by contrast, has secured only US$61,000 in total investment. But Ojo-Bello said the startup, which charges a commission of 15 per cent on all completed deliveries, can compete.
“I think the e-commerce and logistics industry is still emerging, especially across Africa. There is space for more logistics service providers who are able to connect with and solve the problems of same-day delivery, especially for on-demand and long-distance last-mile delivery services,” he said.
“Interswitch is a unicorn but today we continue to see more and more payment gateway providers filling a gap not previously addressed by first movers. We understand fully that there are competitors and some of these probably started earlier and have raised reasonable capital to get a first-mover advantage. We will rather be the “best mover” in a market that is going to see more entrants especially across the African continent.”
The progress Dellyman has recorded with the minimal funds received so far, Ojo-Bello said, will position it for a Series A funding round, which he hopes to raise at the end of 2020. It has certainly seen traction, with customer numbers having almost doubled since January. Dellyman clocked up 3,000 deliveries by the first week of May, up 93 per cent from February, and Ojo-Bello is targeting 1,000 orders per day by the end of the year.
“There is enough evidence that we have, or are close to, product-market fit,” he said. “We are not just getting repeat orders, but existing customers are also referring us to new prospects. These referrals are on the rise every day.”
Customers cut across several business segments, including restaurants, pharmacies, electronics retailers, and marketers, while Ojo-Bello said Dellyman is also in the advanced stages of discussions with a new e-commerce provider which has selected the platform to power its delivery of an estimated 50,000-100,000 daily orders when fully operational.
The startup still has same-day deliveries firmly in its sights.
“While the last mile delivery timeline averages one to three days, and sometimes five days, today, there is a growing demand for next-day and same-day delivery. Although not impossible, guaranteeing same-day delivery requires deep attention to every stage of the delivery process, from when a pickup request is made, how the pickup is processed and through the journey until the item is safely delivered to the recipient,” said Ojo-Bello.
Apart from the challenges of asset availability, coverage and idle capacity, all of which makes same-day delivery “almost impossible”, “last mile” in an emerging market like Nigeria means 15-25 kilometres on the average.
“This is considered “long distance” by many logistics companies and most logistics providers are not able to provide on-demand and same-day delivery services over these long distances,” said Ojo-Bello.
“We discovered that instead these companies batch orders going the same route, and in some cases customers are even required to bring their packages to a central location. Some other companies invest in fulfilment hubs and warehouses as a way of limiting the distance from pickup to delivery.”
All of this means customers are missing out.
“Nobody is trying to meet the needs of that pharmacy store at Anthony whose customer, 40 kilometres away in Ajah, calls at midnight for his drug to be delivered 9am the following morning. Or a home kitchen that receives a request to prepare and deliver five litres of Afang soup to a busy executive and which must be delivered before 8pm on Friday so it will be available for use over the weekend,” Ojo-Bello said.
“We found out from several pilot tests and even after going live that customers do not consider distance and the cost of delivery when booking for services. As long as they can buy from their preferred retailers or service provider. Providing on-demand service over a long distance at a fair price and optimising the use of the logistics assets is still a major challenge that we built Dellyman to solve.”
For now, Dellyman is trying to solve these challenges in Lagos, but expansion will happen very soon.
“Dellyman will launch in Ibadan, Abeokuta, Port Harcourt and Abuja immediately after the lifting of travel restrictions due to the COVID-19 pandemic,” said Ojo-Bello, who said the startup planned to be live in a further five major cities by the end of 2020 and active across Nigeria and in at least two other African countries by the end of 2021.
“These expansion plans will be pursued aggressively to allow us to reach our target daily orders of 150,000-200,000 delivery orders per day by the end of 2022,” he said.