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Last-Mile Delivery in Kenya: How It Works and Who Builds It

5 min read

How the last mile works in Kenya, lessons from Sendy and Lori Systems, how fast electric motorcycles are growing, and where logistics founders can still build.

Last-mile delivery in Kenya runs largely on motorcycle riders, parcel pickup points and pay-on-delivery through M-Pesa, which together work around informal addresses. Logistics startups that last manage working capital as closely as routes. Fleets are changing too: electric models made up 9.6% of motorcycles sold in Kenya from January to August 2025.

I co-founded Hackhouse, a builders' hub in Nairobi. This guide explains how the last mile works in Kenya, what recent failures and pivots teach, and where founders can still build.

How does last-mile delivery work in Kenya?

Three models are common, and many sellers mix them:

  • Rider delivery. Motorcycle riders carry most small parcels within towns, booked through apps, courier firms or a direct call.
  • Pickup points. Customers collect from an agent or shop near them. Pickup Mtaani, built for small online sellers, lists more than 150 collection points, doorstep delivery and a pay-on-delivery service where sellers withdraw funds from their Pickup Mtaani wallet once the agent has collected payment (Pickup Mtaani).
  • Courier and SACCO parcels for routes between towns. Pickup Mtaani also drops parcels with a customer's preferred SACCO or courier.

South Africa shows how far the pickup model can scale. Pargo, a click-and-collect and returns network, lists more than 4,000 pickup points there (Pargo).

Why do logistics startups fail in Africa?

The usual reason is cash. A delivery or freight platform often pays riders and drivers quickly while waiting weeks for large customers to pay, so growth increases the money it has to front.

  • Sendy, the Kenyan logistics startup, had disclosed about US$26.5 million in funding and was valued at over US$80 million in late 2022. It shut down its operations in August 2023 after a planned raise fell short and talks with investors stalled (TechCrunch, August 2023).
  • Lori Systems, the trucking platform, raised a US$2 million bridge round in April 2025 at a US$5 million valuation, down from a 2020 peak of US$120 million. It is working with banks such as Ecobank on invoice financing, where the bank advances cash to drivers and recovers it from cargo owners (Daba Finance, April 2025).

Model your cash conversion cycle before your market size: how many days pass between paying a rider or trucker and being paid by your customer. Our guide to unit economics shows how to work out whether each delivery makes money.

Are electric motorcycles changing delivery in Kenya?

Yes, and quickly. Kenya National Bureau of Statistics data cited by CleanTechnica show 9,368 electric motorcycles sold from January to August 2025, 9.6% of the 97,299 motorcycles sold in that period. For delivery fleets, the questions to answer are cost per kilometre, battery swap coverage on your routes and financing for riders.

Where can startups build in African logistics?

  • Pickup networks in towns outside Nairobi, using shops and agents customers already visit.
  • Fulfilment for small sellers: shelf space, packing and dispatch close to buyers.
  • Finance for riders and truckers, including electric motorcycle loans and invoice finance, built with banks.
  • Software for courier firms and SACCOs: booking, tracking, proof of delivery and M-Pesa reconciliation.
  • Cold chain for food and medicine that must stay cool on the way.

How do I start a delivery or logistics startup in Kenya?

  1. Start with one route type and one customer type, such as small online sellers in one town.
  2. Count your costs per delivery: rider pay, fuel or battery swaps, failed deliveries and returns.
  3. Agree payment terms with customers before you scale, and avoid fronting cash you cannot recover.
  4. Build cash collection into the product with M-Pesa. Our guide to integrating mobile money payments explains the options.
  5. Choose your second market for how similar it is to your first, for example in addressing, payment habits and road networks.

You can test a logistics idea with other builders in the Hackhouse Residency, which runs 12 weeks with no equity taken, or meet founders in the sector at our events.

Key facts

  • Electric models were 9.6% of motorcycles sold in Kenya from January to August 2025 (KNBS, via CleanTechnica).
  • Pickup Mtaani lists more than 150 collection points with pay on delivery.
  • Pargo lists more than 4,000 pickup points in South Africa.
  • Sendy shut down its operations in August 2023 after raising about US$26.5 million.
  • Lori Systems raised US$2 million at a US$5 million valuation in April 2025, down from US$120 million in 2020.

Frequently asked questions

What is last-mile delivery?

Last-mile delivery is the final step of moving goods from a warehouse, shop or hub to the customer.

How do online sellers in Kenya deliver to customers?

Common options are motorcycle riders for deliveries within a town, pickup-point services such as Pickup Mtaani, and couriers or SACCO parcel services between towns. Many offer pay on delivery through M-Pesa.

Why did Sendy shut down?

TechCrunch reported in August 2023 that Sendy ran out of funds after a planned raise fell short and talks with investors at a lower valuation stalled.

How fast are electric motorcycles growing in Kenya?

KNBS data cited by CleanTechnica show electric models made up 9.6% of motorcycles sold from January to August 2025, or 9,368 bikes.

Sources

Go deeper with us. Join the Hackhouse community for conversations that go beyond the surface, where builders share the hard-won lessons that never make it into press releases.

InnovationStartupsAfricaProduct DevelopmentGrowthBuildInAfricaAfricanStartupsLastMileDeliveryLogisticsEcommerceSupplyChain

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