Africa

Paps: B2B logistics in Africa

By Bamba Lô

Timothy Motte

Sep 5, 2024 — 6 min read

The Realistic Optimist is a paid newsletter covering the globalized startup scene.

It is read by people at Endeavor, Sturgeon Capital, Quona Capital and more.

Subscribe now

This interview was conducted and transcribed by Lara Fakhry.

Biography

Bamba Lô is the founder of Paps, a Senegalese transports & logistics startup.

Paps is one of Senegal’s most funded startups, having raised a $4.5M Series A in 2022.

What inspired you to start Paps?

I was born, raised in France and went to business school there. I grew up surrounded by entrepreneurs and artists. My first contact with Senegal was on vacation. I decided early on that I wanted to reunite with my country of origin. I just needed the right reason; that reason came while I ran my first company.

When I was living in Paris, I set up a call center to sell SIM phone plans for telco operators. I quickly expanded to Tunisia and Senegal. I realized that in Dakar, we struggled to get people to visit an operator’s branch and complete the buying cycle. We started offering SIM card delivery services to unlock the bottleneck. Gradually, customers began requesting other services from our couriers. It was incredibly hard to manage and scale. We mostly worked with "informals” - resourceful people looking to make some money by delivering stuff.

We realized that so-called “last-mile delivery” had both potential and few formal competitors. That’s how Paps was born in 2016.

What is Paps today?

We are now a on-demand specialized logistics company focusing solely on B2B services. This strategy paid off, as we gained the trust of major clients such as Orange, Auchan, Eiffage, and FedEx. Today, we have a real-time supervision team that coordinates with various live delivery drivers (which we call “Papsers”) and uses the technology we have developed in-house to guide them.

In 2019, we successfully raised $500,000 in funding. We grew exponentially from there and raised a $4.2 million Series A in 2022, led by 4DX Ventures and Orange-Sonatel.

Today, Paps has a mission success rate of 97.42%. In 2023 alone, we completed over 5 million shipments with 74% of them being recurring. We have a fleet of 500+ vehicles, including vans and minivans used by our network of over 500+ Paps couriers, trained through our Paps Academy. Additionally, we operate more than 3,000 square meters of storage space across six warehouses.

Who are your biggest clients? Why is your service particularly pertinent to them?

Our biggest clients span various industries, including telecommunications, banking, pharmaceuticals, FMCG and retail. I mentioned some earlier but I can add TotalEnergies, Thales, Philip Morris and even DHL are some of the 80+ corporate clients we serve. We are able to access even the most remote zones for delivery. What we deliver is as varied as our customer base: household appliances, machinery… All of that across many sectors (e-commerce, banking, pharmaceuticals, logistics…)

We also have high-profile clients such as presidencies and embassies. These clients have large logistics budgets and rely on Paps for moving sensitive goods between countries, such as confidential documents. Our services are crucial for them due to our reliability and the trust they have in us.

You say your biggest competition is the informal sector. What forms do they take? What do they do better than Paps?

Up until last year, 70% of road freight in the country was conducted by informal actors. “Informal” takes many forms: it can be a solo coursier on his motorcycle delivering food or containers carrying millions of tons of undeclared merchandise.

The informal sector handles large transaction volumes and are a part of everyday consumer behavior, which is always tough to disrupt. Informal actors can operate quite efficiently in specific neighborhoods and rural areas, offering good pricing and swift transactions. Their strength lies in the local trust and relationships they have built as well as their ease of access for the 40% of the Senegalese population that don’t use the internet.

New local, “formal” players like Logidoo, Buur Logistics, and Gamma Link have emerged. How do you plan to maintain a competitive edge? Does first-mover advantage help?

Not necessarily. Quality of service trumps everything else. It's about being very close to our clients and extremely flexible. We've built everything by listening closely and responding to their needs.

Our key differentiator is our technology. Paps has developed in-house tech tools to enhance our operations and stay pertinent to our customers.

Can you give examples of such tools?

MyPaps is our web platform for organizations to request shipping, collection and warehousing services, providing visibility and management of all logistics flows.

PapsOps is a dashboard for operational teams to manage and process information related to each mission, including fleet and courier management.

PapserApp is the mobile application for Paps couriers to manage assigned tasks and share automated ETA updates with clients and operations.

Discovery (Web and Mobile) are applications for mass distribution and data collection, offering real-time tracking, geolocation, historical data and reporting capabilities.

Paps works with UPS. In what capacity?

We replaced a partner who had been with UPS for 15 years, and our technological expertise played a crucial role in meeting UPS's expectations. The offer that UPS needed required a deep understanding of technology that might not have been necessary 15 years ago.

Today, we are the official UPS representatives in Senegal and Guinea Bissau. This partnership enables our customers to take advantage of UPS's services and deliver their parcels to the last mile anywhere in the world. In addition, we represent UPS and provide door-to-door delivery in Senegal and Guinea Bissau.

You've recently entered new markets, such as Benin and Cote d’Ivoire. What are your criteria for selecting new markets and what challenges have you encountered?

We have not faced significant regulatory challenges. We expanded after four years of activity in Senegal, which gave us a solid foundation and clear playbook. When selecting new markets, the main thing we do is look at our client portfolio. What markets do they need better logistics in? We managed to secure a great majority of our clients in new markets because of the commercial relationships we have with clients in Senegal.

In other words, we did not choose to expand to Côte d’Ivoire or Bénin, or in Francophone Africa specifically. We decided to expand where we had demand from existing clients. For example, Ghana looked great on paper. Companies like mPharma and Jetstream succeeded there. But if you looked at our client portfolio and mapping, it wasn’t a logical next step for Paps.

Our internal data outweighs external signs of potential.

Are you inspired by any foreign, proxy company? What are you doing differently from them to adapt to the African market?

It’s hard to pinpoint one specific company. We’ve met everyone in our space: Glovo, Amazon, Uber, Google. We also underwent Alibaba and Google’s accelerator programs. We’ve learned about and digested many different approaches to building a logistics business. Paps is a mix of those reflections.

You raised one of Senegal's largest VC rounds. What common mistakes do you think other Senegalese founders make when raising?

I personally focused too much on the present. I see it in other founders as well: they often struggle to fully grasp what the future might hold for their business.

When we raised, we projected costs based on what we knew, not on what it took to run a larger company. This led us to raise less money than we actually needed, which meant we had to go back for more funding later. It's important for founders to think bigger from the start and raise enough capital to cover unforeseen challenges and growth.

Founders often focus too much on valuations as well. High valuations don't guarantee success; what matters is the value you deliver to your customers. VCs can be driven by hype, but customers should remain front and center.

What new service/market are you most bullish on? Why?

We recently launched our international API for e-commerce. It is used by Aliexpress, and Shein, for example. We have other top, international brands looking into it. We believe this service is a game changer, not only for us but for the consumer as well. It allows access to brands like Zara, where a customer can click, buy a dress and receive it at home in Senegal.

The Realistic Optimist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice.