Established in 2020, Haul247 is a Nigerian logistics startup which has introduced an Airbnb-like model to pair those requiring truck transport and warehouse storage facilities with available providers. The company’s revenue is derived from a commission on each transaction. Jeanette Clark speaks to CEO and co-founder Sehinde Afolayan about the strategic decision to target multinational clients first, the next stage of growth and regional expansion.
In 2019, Sehinde Afolayan led an agricultural commodities trading company in Nigeria that started encountering difficulties due to progressively deteriorating logistics and warehousing services.
“There was one very unpalatable incident in that year where we had already made a down payment on 60 tonnes of grains and travelled to the northern part of the country to prepare the shipment,” he remembers. Upon opening the warehouse and beginning to load the product, they quickly realised that only the first few rows of the stored grain were fit for use. The rest of the grain was ruined, presumably due to insect infestation during storage, and had disintegrated into powder.
The experience deeply impacted Afolayan. On the flight home, he wrestled with the thought of how such post-harvest losses were unacceptable in the 21st century, given all the technology available to prevent them.
Spurred by the incident, Afolayan started researching how to improve the system and thus, the concept for Haul247 was conceived. He reached out to two of his friends, Akindele Phillips and Tobi Obasa. Over the next year, they spent two hours each Sunday brainstorming, methodically crafting a business model for a platform that would tackle the logistics inefficiencies Afolayan had experienced first-hand.
The concept was straightforward. A business user would log onto the platform and look for the necessary service from third-party truck and warehouse owners who list their assets on the platform. For instance, a user might need 20,000m2 of warehouse space for grain on the outskirts of Lagos for a certain date. If it was available, they could place a booking, potentially including the truck trip needed to transport the grain from the farm to the warehouse. To bring this concept to life, the team brought in developers to begin work on a minimum viable product.
However, in early 2020, reports of a concerning virus began to circulate, capturing the attention of the World Health Organisation. Several countries started discussing movement restrictions. The friends found themselves at a crossroads – they could either delay the launch of their company or audaciously initiate it during a time when efficient logistics services were set to become even more challenging.
“We were able to speak to one company, Honeywell Flour Mills, explaining our model to them and they were interested. The logistics manager decided to give us a shot,” says Afolayan. The tech platform was not fully ready at the time, but the team grabbed the opportunity and manually uploaded the request details for the client, matching it with available vendors. “He gave us a trial and we completed it in record time.”
And so Haul247 was officially founded in March 2020, right at the start of a global pandemic.
Finetuning the tech
Haul247 had its first client, but it was still busy finalising the platform that would grow into what it is today. “We are still building, we’re not there yet,” laughs Afolayan. “With a tech platform you never stop building, it remains an ongoing process.”
The team could lean on the experience of co-founder Obasa, a tech entrepreneur who had been instrumental in the formation of multiple startups. “Tobi had worked with many excellent developers and could hand-pick the ones that would add value to our business.”
Adding more customers
Haul247 progressively expanded its client base, with Afolayan and his co-founders leveraging their networks and presenting their solution to companies they had previously worked with. “It was goodwill and networks and the fact that we were able to leverage off of those,” explains Afolayan, noting that the company lacked the resources to vie with established entities through traditional marketing methods.
The strategy was to operate somewhat discreetly, secure some business, and gradually capture market share. Once they had established a credible client portfolio, they planned to generate publicity.
Among the significant clients that have been with Haul247 since its early days include Honeywell Flour Mills; Knauf, a German company with a large distributor in Nigeria for the supply of gypsum and other building materials; Unilever; and Cormart, a supplier of chemical raw materials to manufacturers.
“Unilever was very supportive; they gave us a significant number of trips and that helped build the network even further. These four companies, amid Covid, supported us and allowed us to grow.”
Focusing on multinationals
The team decided to focus on larger multinationals first, a strategic move for several reasons, Afolayan explains.
Firstly, establishing a working relationship with the multinationals makes regional expansion a lot easier. Haul247 would be able to grow into other countries with these clients.
The second strategic rationale is that large multinational corporations offer some certainty of timely payment. Haul247 is very selective about the payment terms it will accept, as working capital limitations can significantly impact a logistics business. “With our multinational clients, some of them pay us within 10 days, others even within a week. We cannot sign any company that won’t be able to pay within two weeks, the strain on our cash flow would be too big.”
Securing more favourable payment terms has enabled Haul247 to distinguish itself and establish a foothold in a competitive industry where other e-logistics companies like Kobo360 are prominent. Haul247 can ensure that truck drivers and warehouse owners (who sign up as partners on the platform), also get paid quickly. Another way in which the company tries to get ahead of its competition is by bundling warehousing with haulage, allowing manufacturers to store goods across the country until they are ready to be moved to the next point.
With a recent round of funding concluded, totaling US$3 million from Alithea Capital, Haul247 is now ready to expand its services to small-and-medium enterprises, including import and export companies and agro-businesses.
The platform can integrate into clients’ existing systems, making the booking of warehouse space or a truck seamless. Users are supported through a mobile app that also provides tracking and logistics management tools.
Today, Haul247 handles over 600 trip requests per month and offers 151,000m2 of available warehouse space. The platform lists more than 1,000 trucks and has transported a total of 29.2 million kilograms of goods.
Plans for the future
Afolayan aims to enhance asset utilisation for all warehouse and truck owners that join the platform. For truck owners, this equates to minimising downtime, while for warehouse owners, it means achieving higher occupancy rates. The company is even contemplating providing equipment, like forklifts, to warehouse owners, enabling them to capitalise on vertical space.
“According to our data, the current utilisation rate for warehousing is around 65% only,” says Afolayan. “We want to boost this up to 97%.”
Haul247 is also beginning to automate or digitise steps in the logistics chain that have traditionally caused bottlenecks or delays. One such initiative is transitioning to electronic proof of delivery, eliminating the hassle and potential payment delays associated with the physical review of printed documents.
The funding from Alithea is earmarked to finance expansion into West Africa. Afolayan divulges that the company is looking at two more countries by the end of the year but remains mum on exactly where this will be.
Furthermore, the company is open to growth through acquisition, currently exploring potential startups in its target countries. “We feel this may be a shorter, faster route to regional expansion.”
Haul247 CEO Sehinde Afolayan’s contact information
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