Mr Ndede began by reaching out to local investors who helped him raise about Sh50 million to launch the e-platform Ngamia Africa.
The design of the platform was such that once a user registers and makes a request to have their goods transported, they would get a list of transporters registered on the platform as third-party service providers.
Once the customer saw a deal they liked, they would select it and deposit the payment in an escrow account.
While catching up during their free time, Jonathan Ndede would often hear his friends in the logistics industry talk about how challenging it was to navigate the informal transportation market.
For one, their drivers would have to wait for long hours in yards to get a walk-in customer who would give them business, or rely on brokers who would, however, take substantial commissions on the money they made, eating into their profits.
When they got a prospect, they would have to charge heavily because the goods would be shipped one way with no return luggage to compensate for the trip back. These rates discouraged some of the customers.
Ndende, a software engineer, sought a solution to this problem. In 2019, he found a way to use his 30-year tech experience to develop a solution to bridge the gap between transporters and clients.
“We knew that there was an issue in terms of logistics transportation, supply chain and commercial movement of goods from point A to point B. Movement of people has been easy because of availability of platforms such as Uber and motorbikes, but it hasn’t been the same in the transportation of goods. The only solution was to go digital, riding on the fact that smartphone usage in Kenya had increased,” he says.
Mr Ndede began by reaching out to local investors who helped him raise about Sh50 million to launch the e-platform Ngamia Africa. The investors later formed his company’s board of directors. He used the money raised to develop the platform, conduct market research and customer acquisition as well as maintain human capital and an office.
The design of the platform was such that once a user registers and makes a request to have their goods transported, they would get a list of transporters registered on the platform as third-party service providers. The transporters would start to competitively bid based on the customers’ request.
Once the customer saw a deal they liked, they would select it and deposit the payment in an escrow account. The system would release 70 percent payment to the driver after completing the first movement, then release the rest later once the customer was satisfied that the goods were delivered.
“We were trying to eliminate the previous way of invoicing where persons transporting goods were only paid after doing the job. At times they were not paid at all, or it took longer for them to get paid because they had to make an invoice first,” says Mr Ndede.
With such features, Jonathan was sure that this was the platform to revolutionise the logistics industry. But there were some factors which they had not taken into consideration.
For one, most transporters were still using entry level mobile phones that made it difficult to access them over the Internet or even track their progress while on the road. Others would have smartphones but were not online most of the time. This meant they had to invest heavily in sensitizing drivers on the importance of going digital.
“Whenever a client needs their goods delivered, besides asking the people they know, they are likely to go online looking for the drivers that are readily available. Further, especially if the client needs to transport goods of value, they will need to be assured of the credibility of the person handling their goods, and that can only happen if the driver is using a credible online site,” says Mr Ndede.
He adds that over time, more drivers began embracing their platform, and their database grew to close to 5,000 registered drivers — 1,500 in Nairobi. Just when business was starting to pick, however, the Covid19 pandemic struck.
While many people would now rely on online platforms to conduct most of their transactions, the level of disposable incomes diminished.
“It was a big test for us. For six months there was no business and we were almost going under. But our directors encouraged us to remain resilient and use the available financial resources to take care of the human resource and also strengthen our product,” says Mr Ndede.
The techpreneur says this resilience paid off. Soon enough, business began picking and they could see a return on their investment. The Ngamia Africa team of six developers even managed to develop another feature called Marquee and integrated it into the e-platform to complement the haulage feature.
“We wanted a scenario where transporters could also identify what is out there, in terms of the things they may need in transit such as tires, petrol stations or garages.
“Therefore, Marquee came as a platform where companies offering these products could advertise,” says Mr Ndede.
Within a short while, they got several advertisers on the platform and this encouraged them to later open it up to other businesses to advertise their products for between Sh1,000-Sh3000.
