🦄 vol. 16
karl and matt chat about last mile delivery and recent developments in organ transplants
to your doorstep 🚪
Lucky you, your hot quarter chicken from Nando’s just got delivered by Mr D. - peri-peri wedges and all! But how did it get there?
Last mile delivery. The holy grail of logistics, largely considered the toughest nut to crack - especially in underdeveloped markets.
We can break logistics up into 3 main stages:
First-mile: the movement of goods from the manufacturer to a centralised hub.
Middle-mile: the shipment of goods from a centralised hub to traditional stores.
Last-mile: the delivery of goods to the end-consumer at a scheduled time and place.
Why so complex? 🤔
Africa has approximately 31 kilometres of paved road per 100 square kilometres of land, in comparison to 134 kilometres of paved road in other low-income countries. In addition to the lack of road infrastructure, poor (colonial) urban planning only exacerbates the last mile challenge. On average, this means that the last-mile cost to a retailer in Africa is anywhere from 35-55% of the product, in developed continents that number sits around 28%.
Companies rarely own their entire supply chain, which means that when delivering their products they have to rely on multiple intermediaries. If we look at the most consumed product in the world, Coca-Cola, and its journey to an end client in a township - you'll clearly see the fragmentation.
How? 🔍
From the manufacturer, the Coca-Cola goes to a distributor. That distributor sends the Coca-Cola to urban retailers. Now, to consider 37% of our population in SA: to get the Coca-Cola to a spaza shop, it must still go to another ±3 intermediaries as many won't deliver to townships. Each intermediary adds to the price of the final product and effectively decreases the available margin for the spaza shop owner.
So what's being done? 🤌
A lot. There are a number of players trying to crack down on this fragmentation in different ways, some using an asset heavy approach while others focus on tech and data. Below are a few notable players:
Sokowatch - Providing spaza shop owners with inventory through same day deliveries and credit offerings.
WIMT - mapping informal markets which will aid last-mile delivery players. As it stands, typical GPS providers aren't reliable in these informal areas.
Pargo - instead of delivery to your doorstep, click-and-collect at over 2500 locations in SA.
What do we see in the market? 👀
Looking at logistics investments by venture capitalists (VCs) in the US from 2015 - 2019, most funding, $11.1 billion of $28 billion, was raised by startups offering last-mile delivery services to retailers and individuals. Of this, 89% went to startups that rely on unconventional delivery modes, such as crowdsourced delivery, drones, autonomous vehicles, and shipments to parcel lockers.
In the African market, of the 647 startup deals amounting to $3.2 billion in 2021 (YTD), 70 were logistics and transportation players, who raised $194 million. Logistics and transportation was also the second most popular sector, second to fintech for the second year in a row, in terms of the number of deals.
We also see, as we have in other markets, incumbents beginning to consolidate startups in other verticals. This is showcased by the likes of Imperial acquiring last mile delivery platform ParcelNinja and more recently an international trucking business J&J Group.
As we progress, we might not see the same trend as the US with unconventional delivery modes (as seen in vol. 9 🦄) taking charge, but we are sure to see a continued focus on the sector and more disruption. To which, the benefits are plentiful: transparency, efficiency and cost reductions for the end-client (one would hope).
karl
pig kidneys and printing hearts 🐷❤️
The past month has been marked by momentous moments for the medical fraternity. In a series of clinical trials, the antiviral molnupiravir (think Tamiflu, but for COVID), developed by pharma giant Merck, was shown to reduce hospitalisation and mortality by 50% in patients infected with COVID-19. Along with improved vaccine uptake, the new COVID-19 treatment will most certainly improve patient outcomes around the world.
But what's perhaps even more exciting is that which has emerged from NYU Langone Health Centre, where doctors successfully completed the first pig-to-human kidney transplant.
Why do we need all these kidneys (or organs)? 🐷
Well, the last few decades have seen the demand for organ transplantation skyrocket. At present, the global organ and tissue transplantation industry (and alternatives market) is forecasted to reach $120 billion by 2024, which will see it surpass the $100 billion global entertainment industry (think Warner Brothers, Disney and Netflix, amongst others). Here's why:
There's been a growing incidence of vital organ failure (think kidney, heart, liver, lung), and so more people are seeking organ transplantation as a means of improving quality of life and lengthening lifespans.
Also, the demand has grown not only as a result of greater need but because medical advances now mean we can perform a higher volume of transplants with less risk and improved post-operative outcomes (think less organ rejection).
And, despite active campaigning and even public policy, this rise in demand is occurring with the backdrop of relatively static organ donor rates.
Solutions, please 🤕
Glad you asked 🥳
What happened in New York needs a little explaining in order to fully understand the implications of the breakthrough. Those at NYU Langone were able to transplant a genetically-engineered pig kidney into a deceased human (who generously donated their body to science), without rejection and with functional organ improvement.
While xenotransplantation (transplanting organs between different species) is mentioned as early as 1667, with a rabbit kidney being transplanted into a human in 1905, refined procedures and genetic advances are slowly removing previous obstacles (primarily infection and organ rejection). The success of those at NYU Langone will likely usher in similar projects, expanding beyond kidneys to include the other solid organs (heart, liver and lung). And while it's evident there is still a great deal of work still to be done, it's a march in a promising direction.
Anything else? 🤔
Weirdly enough, way back in vol. 3 🦄, I looked at additive manufacturing and its potential to address the housing shortfall crises that we're seeing unfold across the globe. It seems 3D (bio) printing is also a source of growing promise in the world of biotech, categorised into creating prosthetics, implants, anatomical models (for pre-operative planning), pharmaceutical research (like drug discovery) and tissue and organ fabrication.
For tissue and organ fabrication, scientists most commonly use inkjet-based 3D printers that deposit "bioink" - essentially "droplets" of living cells or biomaterials, that form the basis of organs. Already, we've seen knee cartilage, heart valves, spinal disk and even an ear created using bio-printing.
Solid organs, with nerves and blood vessels, are understandably more complex to print. Scientists at Tel Aviv University were able to produce a 3D printed heart in 2019, nerves, vessels and all; only issue was that it was the size of a cherry (and they hadn't quite perfected its ability to contract uniformly).
TL;DR 📚
We'll need a whole lot more organs in the coming decades to address growing disease incidence, and xenotransplants and additive manufacturing will likely drive societal betterment (and economic growth). It may still be a way off before we have people walking around with porcine kidneys though.
matt
karl was inspired by this podcast on last mile logistics by the flip africa
matt found this twitter thread pretty cool
claude enjoyed this article on the health implications of wearable health tech
off the back of last week’s podcast recommendation, sash started reading growth iq by tiffani bova