Nigerian-based digital freight startup, MVX, has announced it has secured $1.3 million seed round to bolster its efforts, a year after it made a major pivot from its original model. Africa-focused firms Kepple Africa, The Continent Venture Partners, Founders Factory, Launch Africa, and Capital Oak contributed to MVX’s seed round. Angel investors from the United States, Japan, Nigeria, and South Africa also took part.
The two-year-old company plans to utilize the funds to expand its operations, hire new employees, and develop its technology. MVX is also in talks with investors to raise extra money for its trade finance product, most likely through debt.
Read also:Why This China-based Fund Backed A $2.2m Pre-seed Round For 2-Year-Old Kenyan Fintech Wapi Pay
Why The Investors Invested
Investors were drawn into this round because of the apparent traction the startup has gathered over time. The company which is present in Nigeria, Ghana, Kenya, Rwanda and South Africa has already completed more than 300 shipments this year and expects to complete 1,500 by the end of the year. The CEO also believes that the company has surpassed its 2020 sales and traction targets.
Africa-focused investors have also manifested interests in digital freight startups in recent times. Ghana’s Jetstream which offers a similar service, raised $3 million two months ago; including East Africa-based SEND.
By 2025, the market for cross-border logistics services is expected to generate $32 billion in revenue. For the market to realize its full potential, multiple companies are required. This perhaps also explains investors’ increasing interests in that industry.
“The trade sector in Africa is one that we believe is ripe for disruption. MVX is building a game-changing technology and platform to revolutionize how businesses in Africa move shipment and trade around the world,” Satoshi Shinada, general partner at Kepple Africa, said in a statement.
MVX, on the other hand, stands out, according to Membere-Otaji, because it also sees itself as a trade finance company.
Read also:SnapScan Launches Upgrades Platform for Peer-to-Peer Payments
Japanese VC Kepple Africa Ventures, active since 2019, has invested in car listing platform AutoChek, Kenya’s UTU Tech, among others.
The startup had previously, in 2019, secured a $100,000 pre-seed investment from Oui Capital, a pan-African VC firm.
A Look At What The Startup Does
Launched in 2019 by Membere-Otaji and Tobi Amusan, MVX combines the best of both the fintech and trading industries. The way MVX works is that some merchants who want to send goods from Africa to the United States or China don’t have enough money to pay for freight or supplies. They can then request credit via MVX. It is then passed on to MVX’s financial partners, who lend to consumers who match the minimum criteria. Following that, MVX takes care of the package and delivers it internationally. The merchant pays back after the transaction is completed, and all partners receive commissions.
Originally, the company was known as MVXchange. Its business approach centred upon providing a support vessel booking platform that matched vessel chartering inquiries from operators with Offshore Support Vessels that were available (OSVs). It, however, made a quick pivot and altered its model in March 2020. The decision was based on the uncertainties of oil prices and the epidemic, according to CEO Membere-Otaji.
Read also:The Role Mobile Technology Plays in Africa
“We couldn’t see ourselves doing vessel chartering for the long term because the demand for fossil fuels will definitely reduce over the next few decades. We wanted to do something scalable, something that was impactful, and something that we could be proud of in the next 20 years,” he added.
What followed was the launch of MVXtransit, a digital freight booking platform, helping cargo owners find deals on moving containers across Nigeria. This April, the company launched MVXpay, a finance and payment solution to provide trade finance for freight operators. However, both offerings are now rolled into one: MVX.
In 2016, Tonye Membere-Otaji conceived of the MVX concept. Membere-Otaji was attracted by the lack of an online marketplace for vessels, having worked in the maritime industry (both as a family business owner and as a professional designing apps and websites for businesses).
MVX freight MVX freight
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer