How Saudi Arabia’s $18 billion logistics industry is expanding to the rest of the world
RIYADH: Any cargo delivery business will feel a bit sinking at the thought of short-term storage, with most warehouse operators insisting on minimum volumes and contracts of at least a few months.
Logexa, an online logistics platform launched by Husam Sendi and his co-founders in September 2021, has turned the tide.
The company was born when trouble interfered with Sendi’s first attempt at entrepreneurship.
After earning a degree in supply chain logistics from Oregon State University, he cut his teeth in the same industry as a supply chain manager, first with FMCG distributor Unilever, then with Ohio-based industrial packaging company Greif International.
With that hands-on experience, Sendi launched his first startup in 2013, focusing on repackaging promotional retail items, like a free bowl with a packet of noodles. His biggest client was his ex-employer Unilever, and that contract was canceled when Unilever scaled back operations due to Brexit fallout.
Sendi then moved into consultancy for transport companies and from there expanded into storage services and solutions for its former co-packing clients. However, the company hit the wall when red beetles infected its warehouse.
“I thought it was the end of my business and my career,” Sendi said.
But never one to say die, he continued to serve his remaining customers through his network of affiliated warehouses. This, in turn, gave him the idea to focus on storage solutions. However, he was reluctant to devote resources to warehousing space or human resources, both of which can rack up crippling overhead when a business heads south.
“But in 2019, I heard about digital transformation,” Sendi said. “I spoke to a few people and explored the idea of digitizing the current manual warehouse process. How about a program that accepts orders, collects payment, and diverts orders to the warehouse ?”
His idea was quickly recognized by prominent startup accelerators: first King Abdulaziz University, with a prize of SR10,000 ($2,665), then the Taqadam program at King Abdullah University of Science and Technology. , with a grant of SR525,000.
Sendi’s fledgling startup was bolstered by the addition of Husam Sabano, a former Unilever colleague with a university background in industrial and systems engineering, and Khalid Nagadi, who had a doctorate in industrial engineering and more. a decade of experience in process management. Both joined us as co-founders.
Thus Logexa was born in March 2021, with Sendi as CEO, Sabano as CTO and Khalid Nagadi as COO.
In fact, the COVID-19 pandemic has turned out to be a blessing in disguise. Because everyone was confined to their homes, the company avoided the typical start-up costs of hiring office staff.
“I would say we were lucky not to have to mobilize. We were all stuck at home and all work was online,” he said.
Sendi invested the KAUST grant in technology development and branding. The company was based on a simple premise: to aggregate pallet space through links with warehouse operators, through which it can offer temporary storage solutions to any entity that needs it – a business model known as third party logistics.
“We decided to outsource the whole operation, so we don’t have any assets,” Sendi explained.
Logexa is an on-demand logistics platform. Many storage providers struggle to fill their spaces. But they don’t want to deal with small and medium businesses that involve too much tracking and invoice hunting.
“Many SMEs do not have access to an adequate warehouse because they lack volume. They are also not good at negotiating rates. Even if they do, they will be locked into long-term contracts, which is very expensive.
“We serve people based on their needs – people with overflow issues, small volumes, or small businesses that can’t negotiate deals but need storage solutions at a high level – through our platform. on line. It’s a win-win situation for warehouse operators and our customers,” he said.
Logexa is now active in Jeddah, Dammam, Riyadh, Khamis Mushait, Qassim and Rabigh, seeing steady growth of 30% month-on-month, starting with 24 pallet positions to over 2,700 today.
“We measure our performance on three aspects: the number of pallets we store, revenue and the number of customers,” Sendi added.
The company had sales of $40,000 in March, $30,000 in April and $100,000 in May. In terms of customers, they started with four and now have 75.
The company aims to expand further in terms of services, diversifying into last-mile transportation and delivery, and geographically, with plans to launch in Egypt, Turkey and South Africa, among other territories.
The company’s rapid progress, coupled with its robust business model, has attracted significant investment. Their first funding round, in September 2021, brought in $300,000 from Riyadh’s Seedra Ventures, with an additional $1.3 million committed from an undisclosed source in a second round that will close in June.
Sendi sees Saudi Arabia’s current business climate as ideal for future expansion.
“Logexa gives SMEs and large enterprises access to fast and flexible solutions,” he said. “Saudi Arabia wants to become the logistics hub of the world, and we have a digital solution that will help customers adapt while adding great value to Vision 2030.”