This is one of the top startup funding in Africa for 2019 so far. And again, it has gone to the Nigerian startup ecosystem, particularly to its logistics industry which has seen so much of funding in 2019 already. Startup Kobo360, co-founded by a Nigerian entrepreneur with no background in tech has raised a US$30 million debt and equity Series A funding led by the American multinational investment bank and financial services company Goldman Sachs. The startup is set to scale its operations in more African countries.
Here Is The Deal
- The funding is divided into two parts: $20 million equity and $10 million debt finance.
- The US$20 million Series A equity round was led by Goldman Sachs. Participating was also Asia Africa Investment and Consulting and existing investors including TLcom Capital, Y Combinator, and the International Finance Corporation (IFC).
- The US$10 million in local currency working capital financing was secured from Nigerian commercial banks.
- Kobo360 plans to continue to scale, develop its technology offering and accelerate supply growth.
- Inspired by the new funding, the startup plans to add 25,000 drivers to the platform in the coming months to power the recent Africa Free Trade Continental Agreement.
- Also on the target for the startup is to enter 10 new countries by the end of 2020.
“Our Series A allows us to invest in growing our talented team that is working hard on the ground to systematically address the inefficiencies within the African logistics sector, and strengthen our already extensive network of clients and truck owners across the continent,” said Obi Ozor, co-founder and chief executive officer (CEO) of Kobo360.
“We are also focusing on developing the partnership with drivers, ensuring that they are trained to use mobile-enabled technology, so they can convey goods seamlessly and earn more money. We are already seeing drivers running trips on the Kobo360 platform increase their monthly earnings by 40 per cent, as we work together to mobilise logistics across Africa.”
What Attracted Investors To The Startup
- Goldman Sachs executive director Jules Frebault said Kobo360’s on-demand logistics offering had generated impressive traction.
“We are excited to support Obi, Ife and the team as they harness technology to tackle one of Africa’s most pressing development challenges — increasing market transparency, improving reliability and unlocking efficiencies for all participants in the logistics ecosystem,” he said.
“IFC’s continuous investment into Kobo360 stems from the company’s successful track record. Kobo360 is empowering and enhancing the capacity of the vast underserved network of “micro” fleets in Africa to serve the huge unmet long-haul freight needs of large enterprises and SMEs, delivering value to both sides,” said Wale Ayeni, who heads venture investing in Africa for the IFC.
A Look At Kobo360
- Launched in 2017, Kobo360 is a digital logistics platform that aggregates end-to-end haulage operations to help cargo owners, truck owners and drivers, and cargo recipients achieve an efficient supply chain framework.
- The startup raised two funding rounds totalling US$7.2 million last year and has already expanded to Ghana, Kenyaand Togo, and has now secured its biggest investment yet.
- Kobo360 is also developing a suite of driver-focused products to support the over 10,000 drivers on its platform. It has launched KoPAY, offering access to up to US$5,000 monthly working capital; KoboSAFE, access to an insurance product; and KoboCARE, access to discounted petrol, comprehensive HMO packages and an incentive-based education programme for drivers’ families.
Why This Is Significant For Budding African Startups
Kobo360’s story is quite remarkable to the extent that it has proven that any serious startup with the focus and the right backing would almost always survive. The startup has to be one of the few digital trucking services in Africa to find an early niche in an industry that still caught in chaos and disorder.
‘‘Growing up as a young boy in a farming village in Enugu, I started a logistics business at the local truck park. The challenges I faced then, as a teenage business owner, were still the same challenges SMEs & large enterprises were facing in 2016. I knew something had to be done. You find middlemen who charge exorbitant unaccountable fees to transport cargo but cannot provide accurate tracking information when asked. Goods arrive at their destinations in terrible shape or sometimes go missing. Not to mention the stress truck drivers go through waiting to load the cargo at the ports or the danger faced while transporting said goods,’’ said Obi Uzor, Kobo360 co-founder.
Kobo360 Is Gradually Finding Hope For A Disorganised Sector Through Digitised Trucking
Transport and Logistics across Africa has been in a poor state for some time. Kobo360 was launched to address this, notes Uzor. Was it ever going to be an easy task? You know the answer. No. Do we think we are the best people to effect continent-wide change? Yes. And here’s why.
‘‘Since 2017, Ife Oyedele II and I wanted to help solve the logistics problems SMEs and large companies faced in Nigeria. With lead times of up to two weeks to deliver cargo, we knew we had to do something about the inefficiencies in the supply chain and increase productivity. With that in mind, Kobo360 was born. Our tech-enabled full truckload offering enables the development of an efficient supply chain for end-to-end long-haul freight operations, connecting and supporting cargo owners, truck owners & drivers, and cargo recipients.
Since launching, we’ve moved over 500Mkg of goods, aggregated a fleet of over 10,000 drivers and trucks, and serviced over thousands of SMEs and 80 large enterprises such as Dangote Group, DHL, Unilever, Olam, African Industries, Flour Mills of Nigeria, and Lafarge. We’re disrupting third-party logistics by handling the movement of goods, tracking, warehousing, sales and accounting. From start to finish, we are supporting our customers and making logistics work for them. We are two years in; we want more of the same, at scale, across the continent. We are excited to think where we will be in ten years’ time,’’ Uzor said
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.