Founded in 2016 by young entrepreneurs Bamba Lo and Rokhaya Sy, the transport and logistics company Paps Logistique made 4.6m deliveries in Senegal and Côte d’Ivoire last year. Having recently entered the Beninese market, and with a foothold in Guinea-Bissau, the startup specialising in last-mile delivery intends to eventually cover all of Francophone Africa.
Originally an on-demand delivery app that put customers in touch with delivery drivers for the express delivery of parcels, the startup soon began offering technology-based transport and logistics services for businesses. Paps is now positioned in several logistics segments, such as warehousing, inventory management, domestic, sub-regional and international transport (by air, land and sea), and last-mile delivery.
This, says, Franco-Senegalese entrepreneur Lo, is a model that can easily be replicated in the sub-region, although the worldwide shockwaves caused by the bankruptcy of the tech-focused Silicon Valley bank SVB have put a temporary hold on expansion.
“We will wait for a more favourable time before embarking on our accelerated development plans,” says Lo. Speaking in his office at the company’s new headquarters in Dakar, he tells African Business that the company nevertheless intends to consolidate in Côte d’Ivoire and Benin, two markets it entered in 2022 and early 2023 respectively. Eventually, however, the group’s ambitions are much bigger, with the aim to provide “a logistics infrastructure platform across all of French-speaking Africa”.
Going that last mile
What explains the success of this Senegalese startup, which now employs around 150 people? Although the West African coast has long been connected to the world, through international multinationals such as Bolloré, CMA CGM and Maersk, the logistics part for the end customer (storage, transport, last-mile delivery) has long been the preserve of the informal sector, which is extremely fractured.
The two co-founders of Paps saw the potential of this last-mile market, which they estimate to be worth $3bn in West Africa. They set out to structure and digitise the various segments of the value chain and to provide a seamless standardised solution from the port to the end customer.
“Paps is a true trailblazer; the company is becoming more and more established in the logistics value chain,” says Stanislas Faye, who runs the investment programme for the telephone operator Sonatel, one of Paps’s biggest clients.
“They have an Uber-like approach and are involved at the smallest detail. They train young people on scooters in an academy. They provide vehicles for clients such as NGOs or banks. They deliver products and parcels. they deal with administration and customs, and they are also involved in freight. They allow us to deliver stocks of SIM cards, modems and solar kits to rural areas,” he says.
“Their model is easily replicable in the sub-region, because it’s often the same multinationals that we find, with the same needs in terms of logistics.”
In January 2022, the startup raised $4.5m in a fundraising round with venture capital firm 4DX Ventures and Orange. “This money has allowed us to accelerate our customer acquisition, which has led us to recruit in the marketing and sales departments,” says Lo. “We have also continued our IT development.
Paps now claims “between 500 and 1,000 customers”, including e-commerce companies, the media, banks, etc. It currently relies on a fleet of 600 partner vehicles, including trucks, minivans and scooters.
The company currently operates four warehouses in Senegal, two in Côte d’Ivoire and one in Benin. In the long-term, Paps intends to cover the West African Economic and Monetary Union (WAEMU) area, to enable its customers to sell and deliver their products within a very short time.
“Tomorrow, our ambition is to enable our Beninese customers to sell their products in Senegal and Côte d’Ivoire, and so on. For example, we are working on plans to expand the Senegalese watch brand Mathydy to Côte d’Ivoire and Benin. We store their products, prepare their orders, do the packaging, deliver and collect the revenue, which we pass on through our system,” says Lo.
Between 2021 and 2022, Lo and Sy say they more than doubled their turnover.
Overcoming the informal sector
Since April 2022, Paps has also been the official representative of the US delivery company United Parcel Service (UPS) in Senegal and Guinea-Bissau – in effect providing them with a ready-made network of more than 200 countries. “If you want to send a parcel to Japan, for example, you interact through us and UPS takes over from there,” says Lo. “It’s seamless.”
For Faye, Paps’ rapid rise is due to its ability to offer a reliable service and a high level of service delivery: “It is their professionalism that has enabled them to establish themselves in the logistics and last-mile delivery market. In West Africa, the delivery service has traditionally been very patchy and the fragmentation and lack of structure was holding it back. It’s still the case in many countries.”
Faye has observed a formalisation of the market through the appearance of new players, such as Logidoo (a digital logistics platform), Buur Logistics (a Senegalese transport and logistics startup) and Gamma Logistics (a heavy goods vehicle transport platform).
Paps also faces competition from international players such as DHL and FedEX, with whom the startup also collaborates. This increased competition has led to all the companies sharpening up their offering.
However, “the informal sector remains our number one competitor,” says Lo.
Still some distance to go
Startups in Senegal benefit from assistance and favourable incentives. Last year, ADEPME, the country’s agency for the development and support of SMEs, financed Paps Logistique to the equivalent of over $100,000. When it was starting out, the company also benefited from preferential lending rates from the DER, the state-backed support programme for startups.
However, for Lo, it is too early to call their business a success-story as it is far from reaching their objectives.
“We are here to build a logistics infrastructure that does not yet exist in French-speaking Africa, a logistics value chain that is still mostly informal,” he says. “We have achieved at best 20% of what we want to do.
“Looking ahead, in 10 years, the company will be 17 years old. By then, our ambition is that we will be able to offer last-mile delivery services throughout Francophone African countries, as well as having made acquisitions in North, South and East Africa to further grow our business. We will also have integrated our technology with international sites such as Amazon and Alibaba.”
Lo is a man in a hurry. That delivery timer is ticking.
Read more about Senegal’s booming economy in our Senegal Dossier.
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