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Founder Interview

How ShapShap Reached 5,000 Customers with a $1.20 Average Order Value in Nigeria's On-Demand Delivery Market (Interview with CEO Khalil Halilu)

Interview Date
May 25, 2022
Interviewee
Khalil HaliluCEO and Founder
Watch
Watch the full interview

Company Metrics at Interview Time

Customers (2022)

5,000

Average Order Value (2022)

$1.20

Active Drivers (2022)

280

Daily Deliveries (sample day) (May 2022)

380

Historical Snapshot

These numbers were reported by Khalil Halilu during the interview recorded in May 2022 and are a historical snapshot, not current figures. See ShapShap’s current numbers.

Key Takeaways

  • 01ShapShap had a customer base of 5,000 at the time of the interview
  • 02Average order value on the platform was $1.20
  • 03Approximately 280 drivers were considered active, defined as completing at least 8 deliveries per day
  • 04On a sample day, ShapShap processed around 380 deliveries
  • 05Revenue is split roughly 60% from commissions on orders and 40% from asset financing
  • 06ShapShap partners with banks to finance bikes and vehicles for gig economy workers, earning a markup
  • 07Food delivery is the primary use case, with parcel delivery as a secondary market
  • 08Active driver rate fluctuates seasonally, with drivers doing close to 20 deliveries per day on weekends

Company Metrics at Time of Interview

MetricValueSource
Customers (2022)5,000Founder interview, May 2022
Average Order Value (2022)$1.20Founder interview, May 2022
Active Drivers (2022)280Founder interview, May 2022
Active Driver Definition (min deliveries per day) (2022)8Founder interview, May 2022
Daily Deliveries (sample day) (May 2022)380Founder interview, May 2022
Active Customer Rate (2022)80%Founder interview, May 2022
Commission Share of Revenue (2022)60%Founder interview, May 2022
Asset Financing Share of Revenue (2022)40%Founder interview, May 2022

Growth Breakdown

Customers

ShapShap reported a customer base of 5,000 at the time of the interview, with approximately 80% considered active. The primary customer segment is restaurants and SMEs placing food delivery orders.

Driver Supply

Around 280 drivers were actively working on the platform, defined as completing at least 8 deliveries per day. Delivery volume fluctuates seasonally, with drivers handling close to 20 deliveries per day on weekends and as few as 5 on slower weekdays.

Revenue Model

ShapShap earns revenue through two streams: commissions on orders, which account for roughly 60% of revenue, and asset financing, which accounts for the remaining 40%. While commission margins are thin, asset financing carries a higher margin.

Funding and Financing

ShapShap partners with banks to provide asset financing, helping gig workers acquire bikes and other vehicles. This financing arm generates a markup for the company and supports driver supply growth.

Growth Strategy

Marketplace Focus on Food Delivery

ShapShap identified food delivery as its largest market and built its core operations around connecting restaurants with drivers. Parcel delivery for SMEs is a secondary use case that adds incremental volume.

Asset Financing to Grow Driver Supply

To address the challenge of driver availability in the Nigerian market, ShapShap partnered with banks to finance bikes and vehicles for prospective drivers. This lowers the barrier to entry for gig workers and expands the supply side of the marketplace.

High Activity Threshold for Driver Quality

By defining an active driver as one completing at least 8 deliveries per day, ShapShap maintains a high bar for supply-side quality, ensuring restaurants and customers receive reliable service.

Commission-Based Revenue with Financing Upside

ShapShap follows a gig economy commission model similar to Uber, taking a cut of each order. The asset financing arm provides a higher-margin revenue stream that complements the lower-margin commission business.

Best Quotes

“The buyer in my marketplace is the, which what we call the supply. I mean, what you call the demand are people that are placing orders that want things to be delivered. It could be an SME, which is a restaurant, or it could be an individual that is trying to move an item from point a to point b, basically.”
“Yeah. That's the main use case. Although we have some parcels, we have a couple of things that SMEs move from one place to another, but the biggest market is food.”
“Well, we have a customer base of 5,000 and active users are around 80%.”
“An average of 280 drivers actively.”
“Well, anyone doing eight deliveries per day is considered active.”
“So we take commission on orders just like Uber, you know, and the likes, Gig Economy. That's our primary source of income. But also considering the environment we operate in, have asset financing, so we partner with banks to finance people that want to work in this gig economy space, giving them bikes and other kind of vehicles, and we make a markup on it.”
“60 is commission and then 40 is asset financing.”
“The average order value is about 1,000, which is just a little bit over a dollar, like $1.2.”

What Happened Next

This interview captured ShapShap at an early stage in May 2022, when the platform had 5,000 customers and was processing hundreds of deliveries per day in Nigeria. The numbers above reflect what Khalil Halilu reported at that point in time and should not be taken as current figures. Visit the ShapShap company profile on GetLatka for the latest available data.

View ShapShap’s current profile and metrics

Full Transcript

Chapters

Introduction to ShapShap and Khalil Halilu

Nathan Latka

00:00Hey, folks. My guest today is Khalil Halilu. He is also known as KSH. He's a Nigerian tech expert, a thought leader, and a well versed entrepreneur. He's the founder of ShapShap, an on demand delivery service. He's determined in inspiring the next generation of Mavericks that will see Africa grow to meet the rings Continentally, his tool is an online marketplace for on demand logistics services. Khalil, you ready to take us to the top?

Khalil Halilu

00:24>> Sure. I am.

Marketplace Structure: Buyers and Sellers

Nathan Latka

00:25Okay. So with any marketplace, there's a buyer and there's a seller. Who's the buyer and seller in your marketplace?

Khalil Halilu

00:32>> Well, the buyer in my marketplace is the, which what we call the supply. I mean, what you call the demand are people that are placing orders that want things to be delivered. It could be an SME, which is a restaurant, or it could be an individual that is trying to move an item from point a to point b, basically. Okay.

Nathan Latka

00:49And so it's a restaurant and then sorry. Who's on the other side?

Khalil Halilu

00:54>> The driver.

Nathan Latka

00:55Which Okay. Like the

00:58Is this your main use case? Drivers getting connecting to restaurants to deliver meals?

Primary Use Case: Food Delivery

Khalil Halilu

01:03>> Yeah. That's the main use case. Although we have some parcels, we have a couple of things that SMEs move from one place to another, but the biggest market is food.

Nathan Latka

01:14Okay, so restaurants and drivers are moving food. So in the past thirty days, how many restaurants delivered at least one meal using ShapShap?

Customer Base and Active Users

Khalil Halilu

01:24>> Well, we have a customer base of 5,000 and active users are around 80%.

01:33>> So, yeah, think it's easily 4,000 restaurants.

Nathan Latka

01:37Okay. And how many drivers deliver those meals for the 4,000 restaurants?

Driver Supply and Activity Definition

Khalil Halilu

01:44>> An average of 280 drivers actively.

Nathan Latka

01:48And how do you define active?

Khalil Halilu

01:50>> Well, anyone doing eight deliveries per day is considered active.

Nathan Latka

01:55Eight. Yeah. Eight.

01:57Wow. That's a lot. Okay. So that's a very high bar for what you do to find of active. At least eight deliveries per day.

Khalil Halilu

02:03>> Yes. Eight deliveries per day.

Nathan Latka

02:05Okay. So how many yesterday, how many deliveries did you do?

Daily Delivery Volume

Khalil Halilu

02:10>> Yesterday, we did around, 380 deliveries.

Nathan Latka

02:15Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect your

02:39Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

03:03a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is not

03:25built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going

03:51out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but if

04:12you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the

04:39interview.

Khalil Halilu

04:40>> Okay. Interesting.

Nathan Latka

04:41So so if I take 380 deliveries divided by eight, you had about forty forty to 50 drivers active on the platform?

Khalil Halilu

04:50>> Yeah. So it's seasonal. Towards the weekend, you get, so that's monthly active, right? Towards the weekend, you have drivers doing close to 20 deliveries per day, you know, because of the the weekend traffic. But during the days, it goes as low as, you know, five. So by the time you kind of average it, you know, you get that eight. That's our target on a monthly basis.

Nathan Latka

05:14And Khalil, before we learn how you signed up so many restaurants, it's incredible, how do you make money? What's the revenue model?

Revenue Model: Commissions and Asset Financing

Khalil Halilu

05:20>> So we take commission on orders just like Uber, you know, and the likes, Gig Economy. That's our primary source of income. But also considering the environment we operate in, have asset financing, so we partner with banks to finance people that want to work in this gig economy space, giving them bikes and other kind of vehicles, and we make a markup on it.

Nathan Latka

05:45Interesting. Okay. If you break down your revenue between commissions and your asset financing, what percent is bigger? What makes up more revenue?

Revenue Split Between Commissions and Financing

Khalil Halilu

05:55>> Well, I'll say sixty, forty, you know, because asset financing

Nathan Latka

06:00is 60 is what?

Khalil Halilu

06:02>> 60 is commission and then 40 is asset financing. Mhmm.

Nathan Latka

06:07And I cut you off. What were you gonna say?

Khalil Halilu

06:10>> Yeah. You know, the margin for, you know, commission is small, you know, but the asset financing is, you know, is much bigger.

Average Order Value

Nathan Latka

06:20So let's look at the percent on a commission on orders for a second. What's the average order value?

Khalil Halilu

06:27>> The average order value is about 1,000, which is just a little bit over a dollar, like $1.2.

Nathan Latka

06:36Okay. So the so that the average order is a dollar 20?

Closing and Where to Find ShapShap

Khalil Halilu

06:39>> Yeah. A dollar 20.

Nathan Latka

06:41Alright, guys. We will rebook with Khalil. Audio connection's too rough here, but hopefully you enjoyed that. Check him out. Support him. Shapshap.com. One

06:51more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called shark tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM Central.

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