Lagos-based startup, Midddleman, is bridging trust and logistics gaps in the e-commerce world

Omolara Sanni and Adeola Owosho spent about five years in the e-commerce industry in Lagos. They dabbled into three different businesses, one of which made about N20 million in revenue towards the end of the COVID-19 lockdown in 2020.

Despite their significant business success, they encountered two major setbacks. One was a trust issue with their online customers, and the other was problems with delivering within Lagos and other parts of Nigeria.

These were common issues in the e-commerce industry, as other vendors in Lagos and other states in Nigeria experienced them. As Product Marketers, they decided to research and build a product to solve these problems. This led to the creation of Midddleman.

In an interview with The Record’s Omon Okhuevbie, Owosho shared how Midddleman is creating trust between business owners and their customers through its escrow feature. He also explained that the newly launched website grants access to over 40 logistics companies in Nigeria, allowing for rate comparisons. Additionally, the co-founder shared that e-commerce companies can now send Yuan/CNY/RMB to their Chinese suppliers through Midddleman.

This interview has been edited for clarity and brevity.

Omon Okhuevbie: What inspired you to start a company focusing on deliveries for e-commerce businesses?

Adeola Owosho:  Omolora (co-founder) and I started Midddleman about one year ago. We had spent about five years in the commerce industry, selling stuff online, on Instagram. We usually import from China, Alibaba, 1688, all these Chinese websites. Then we run ads to sell them in Nigeria. We started as far back as 2019, and in those five years we faced two biggest problems.

The first one is trust and the second one is logistics. We grew pretty big but at some point it was almost impossible to scale across the nation. Nigerians want to pay on delivery which is not exactly a sustainable way to run a business. Logistics was also a huge hassle. Back in the days we would use a platform like GIG to send packages; it was pretty effective but we were also incurring lots of cost, if you factor in the fact that Nigerians that want to pay on delivery will eventually not go and pick up their products and you have to send them back to Lagos. 

After a while, we realised that hey, why don’t we stop this e-commerce and go build something for the e-commerce industry instead. If we are facing these problems, a couple thousand or maybe 100,000 other e-commerce vendors are also experiencing the same thing.

We had spent five years of our careers also doing product marketing, like we have been working in tech for a very long time. Omolara worked in product marketing, helping tech companies scale and grow their products and I also do the same thing. So we were like, we can build this and we can sell it, why don’t we just go do it? We decided to start Midddleman. We started with just the escrow service and recently we became an ecosystem of tools that helps e-commerce business owners do business easily. 

OO: Can you walk us through the key features of your platform and how they benefit both businesses and consumers?

AO: Today, Midddleman is an ecosystem of tools and people. In terms of tools, the first is currency exchange. So, if you buy your goods from China, of course it’s difficult to pay in USD. Dollar cards are not very reliable,and  dollars are even hard to source in the first place; so everyone these days pays directly with RMB. 

The first product that we have is the one that helps you buy RMB and send directly to your supplier without hassle and without fear. RMB scams are one of the biggest scams in e-commerce right now. I heard of someone that scammed people of like N540 million and eloped with their money. So, on Midddleman you can buy RMB and send to China easily via their Alipay wallet. 

Secondly, you can access logistics services. All the courier services you’ll ever need to run your business, almost 50 of them are currently on Midddleman. You can compare their rates, compare the delivery timeline and book deliveries swiftly.

Thirdly, you can also use our escrow service to tackle payment on delivery. If you have customers who don’t trust you enough, you can use our escrow service to build trust with them. What that means is that instead of them paying directly into your bank account, you can tell them to pay into my Midddleman wallet. Your money is safe; when I deliver you give me the code. So that also helps e-commerce vendors make more sales and do business easily.

OO: How safe is this escrow service and how does it work in a way that both the vendor and customer are satisfied?

AO: What happens transaction-wise is that as a vendor, I go to my Midddleman app, I create the escrow; after filling the details, including the amount I want to get from you, it generates an account number. Then it also instantly sends you (the customer) a four digit release code, like an OTP and a dispute link for that transaction. Then you see something like this business has created an escrow for this payment, pay into this account, when they deliver the products to you, this is the code to share to unlock their money. If you are not happy with the transaction after receiving it, click the dispute link to log a dispute and we will find a way to figure it out. That’s how it works. Once you receive that as a customer, that’s your vote of confidence. As a vendor, I am safe because at least the money is already with me but I just don’t have access to it yet. I’m also sure that you as a customer are serious about buying. 

OO: What if the customer doesn’t send a code?

AO: Immediately I attest that I have delivered a product to the customer and it has been received, the system starts a 24-hour countdown. After 24 hours, if I don’t get the code from the customer, the money is automatically deposited into my account. As a customer you keep getting messages and emails every six hours to notify you to either initiate a dispute or send the code. If you don’t do either, it is assumed that you are fine with the order and the money is disbursed. It is an amazing product, but people don’t understand it yet. It’s pretty difficult, and we are working on enlightening them more.

OO: How do you ensure the reliability and efficiency of the logistics companies listed on your platform?

AO: What we did was to plug into the individual systems of all the logistics companies. When you book a delivery on Midddleman, when you get those rates, those are the actual rates directly from the logistics company. We also made sure to only list very mature and the most reliable logistics in the country. We know that these are companies that have been in business for at least five years. They have systems in place. If they say it is going to get to you in two days, it will get to you in two days.

OO: Midddleman has a podcast. What inspired this and can you share more about it?

AO: The Midddleman pod is our way of creating a community and a support system for e-commerce entrepreneurs because e-commerce in Nigeria is tough. If you assume that what works in the US, or in the UK is what would work here, you are going to shed tears. An American would typically just go to Shopify, open the websites and start running their ads and people would just go to the website and check out. Nigeria is a very low trust society, it’s difficult to run a business. You need to understand how things are done and the other people that are winning, how they are doing it. 

It is also our way of helping those that also import from China. How do you import? How do you pay your suppliers? How  do you make sure you are talking to the right supplier? How do you make sure your goods are safely shipped from Vietnam, Bangladesh all the way down to Nigeria? So just that support system for them. Eventually it’s also a way for us to make sure that everyone stays within the ecosystem and to make them feel like Midddleman is my go-to platform for whatever I need. 

Today, we have just three solutions (products). At the end of the year, we might have five or 20. That’s why the name can accommodate a lot of things because we want to be that community, that app on your phone that whatever you need to run your business you get it on Midddleman.

OO: Did you face any challenge while building Midddleman?

AO: I will say the biggest challenge we’ve had is Nigeria. I won’t say it is the biggest challenge but of course, access to fuel and power. You know, like being productive, I think that’s the word. We actually planned to finish building this in one month, max two months but then it took three months. It was almost the fourth month before I went crazy and said you know what, this thing I’m going to finish this week and nothing is going to stop it. We had to book a short-let, get everybody in, and order food for them. In a four-day marathon, we were able to finish the things that were taking two or three weeks. 

In terms of other challenges, in the last one week we’ve almost tripled the number of users that we had. We had some viral tweets which had almost three million impressions in two weeks. At the moment what we are battling with is support. It’s our first time doing this; we’ve never done such a thing at this scale. It is a product, some people are experiencing some little issues like how can I add my card? How do I verify this? 

So we are trying to provide as much support as we can right now. We need to make sure that the product is good enough for everyone.

OO: In what ways does your company contribute to improving the e-commerce landscape in Nigeria?

AO: Nigeria’s e-commerce is one of the biggest. I think globally we are like number 38 in the world. The e-commerce industry is also growing at 15% year on year. The Nigerian market is really big and there is room for a lot of changes. A lot of infrastructure is currently not in place and e-commerce businesses struggle. We see ourselves as a pioneering company that is trying to offer as much service as possible to people that need them but we also understand the fact that we can’t do it alone. This is me saying that we welcome other people to come join us to change and help the e-commerce industry grow and become more mature, so that businesses can do business easily.

OO: How do you envision the future growth and expansion of your company in the Nigerian market and beyond?

AO: In terms of growth, today we currently have users from across the country. We are a tech-enabled platform and what we do is pretty straightforward. As long as you run your business, you operate in naira and you serve the Nigerian markets, you can literally use Midddleman. We have people that currently use Middleman from Canada. Our website allows us to see where they are logging in from. Someone in Russia created an account last week, verified their account and did their KYC.

However, in terms of growing the business outside Nigeria, we haven’t really thought about that yet. What we are focused on is building a solid product that works, building a solid community that would recommend Midddleman in their sleep. So, if we get that right, I think growth is going to be pretty easy.