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Leapfrog Logistics: Digitising Delivery in Iraq
This week, the Iraq Energy Institute interviewed one of the entrepreneurs at the cutting edge of Iraq’s app economy. Sandoog was established to service Iraq’s logistics sector, where bureaucracy and a lack of supporting infrastructure have been a hindrance to trade. Like Iraqi online marketplaces Miswag or Bazary, Sandoog has encountered uniquely Iraqi problems but cleverly adapted to find local workarounds. At the time of writing, Sandoog had just opened their second office in Najaf, southern Iraq.
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IEI: How did you get involved in the tech sector in Iraq? What were the problems and challenges you encountered?
MO: The original intention was to try to find solutions to the daily problems in the logistics sector and particularly for the ‘last-mile’ delivery service – both of which serve as the backbone to day to day trade in a country.
We noticed that Iraqi businesses and consumers still rely on archaic processes to move goods throughout Iraq, causing severe delays and unsuccessful transactions.
The second set of issues came from introducing the tech solutions we were developing. We have noticed there is still low adoption for technology in daily life in Iraq, as well as a heavy reliance on cash transactions, particularly between businesses and their customers, who operate on a Cash on Delivery Model (COD).
IEI: How did you come up with the idea of Sandoog?
MO: Ahmed and I have both worked on tech projects in the UK and the Middle East, and in late 2017, Ahmed’s experience with one of the biggest last-mile delivery providers in the UK served as an inspiration to bring us together and embark on the Sandoog journey. In the beginning, we were carefully testing different strategies to penetrate the market while measuring the feasibility of this venture. We were able to gain enough orders to bring consistent work for drivers and staff through our unique approach to branding and marketing and this allowed us to slowly roll out the tech features we have been building.
IEI: What challenges were there starting the company, for example getting a loan to start the business, registering the business?
MO: The venture, to this day, has been self-funded in a boot-strap manner by us, and this, of course, has its limitations and challenges as we are now trying to grow – Investors in Iraqi Tech Startups are far and few and we have been focusing on resourcefully building a strong infrastructure for Sandoog internally, to be able to attract funding and large merchants.
The second challenge is the lack of tech adoption in society – much needs to be done to educate businesses and consumers to use alternative solutions and facilities to be able to increase efficiency and structure progress for the coming years. A key example of this is the use of online payment gateways and the lack thereof to help with seamless transactions.
IEI: Where do you see the Iraqi tech sector in five years time or even 10 years time?
MO: If the infrastructural problems are addressed and resources become available, I believe in 5 years time you could see many more start-ups thriving and attending to the various needs of the people.
IEI: In January, Careem launched in Baghdad, a multi-billion dollar company. Are you seeing a lot of potential for foreign investment in this area?
MO: Currently, no. the Careem example is a unique exception – there isn’t a rush from inside or outside of Iraq to invest in tech startups in Iraq unfortunately. And rightly so – most markets are still volatile and the infrastructure to accommodate the growth of tech companies isn’t completely there yet.
IEI: What are the main problems that the tech sector in Iraq faces at the moment?
MO: Lack of education and consequently, adoption of technology in everyday life – internet and electricity isn’t of a global standard yet, and lack of funding and resources to entice entrepreneurs and talent alike to commit and thrive – these are the main challenges that we are seeing. For Sandoog, we can see it’s a long, tiresome road. But someone has to walk it, for the sake of Iraq and its people.