Nigerian freight logistics startup Kobo360 has raised a $20 million Series A round led by Goldman Sachs and $10 million in working capital financing from Nigerian commercial banks.
By Digest Africa’s latest ranking, Kobo360’s $20 million Series A is the 5th largest investment in an African startup this year, after Egyptian ride-hail company Svwl’s $42 million raise in June. Kobo360’s existing investors IFC, TLCom Capital and Y Combinator joined the round.
Kobo 360 — with an Uber -like app that connects truckers and companies to delivery services — will use the funds to upgrade its platform and expand to 10 new countries beyond current operating markets of Nigeria, Togo, Ghana and Kenya.
Since its launch in Lagos in 2017, Kobo360 has continued to grow its product offerings, VC backing and customer base. The startup claims a fleet of more than 10,000 drivers and trucks operating on its app. Top clients include Honeywell, Olam, Unilever, Dangote and DHL.
In addition to customer focus, founders Ife Oyedele II and Obi Ozor have prioritized serving the startup’s drivers. They offer the company’s app in languages common to drivers, such as Hausa and Pidgin.
Kobo360 also launched its own driver working capital finance programme, KoPay, KoboSafe insurance product and KoboCare: a suite of driver services from HMO packages to family tuition assistance.
The startup is part of a growing e-logistics and transport space in Africa linking on-demand apps to mobile-based connectivity to move people and goods around the continent more effectively.
In the ride-hail space, global players such as Uber and Bolt are competing with each other and homegrown startups to digitize and capture revenues in the continent’s auto and motorcycle taxi markets.
In e-logistics freight delivery, two startups — Kobo360 and Lori Systems — have continued to compete tit for tat on investment, scale and expansion.
Kobo360 moved into Lori Systems’ HQ country Kenya this year. Lori Systems expanded into Nigeria in September of 2018.
Commercial research firm MarketLine estimated the value of Nigeria’s transportation sector in 2016 at $6 billion, with 99.4% comprising road freight.
MEET THE CEO
At the launch of the Next African Start-Ups program in Egypt, Obi Ozor, founder and chief executive officer of Kobo360, talked about his passion for problem solving—and how his new start-up is delivering faster trucking services and creating jobs.
Where does your entrepreneurial spirit come from?
I’ve always been an entrepreneur. I’m just born to do this. When I was 13, I was in a boarding school in southeastern Nigeria and I used my pocket money to buy a Nokia cell phone. My classmates who didn’t have phones would pay to use it to call their parents. That was my first business.
I honestly think some people are just very entrepreneurial. For me, when I see a problem I think, ‘Ok, this is not how it should be.’ I see myself as the person with the obligation to solve that problem. The joy of solving the problem further fuels your drive, so you become bolder and bolder. The things you achieve encourage you and you start to believe. Believing is the most important thing for an entrepreneur. You must believe, even when no one else does.
Tell us about the “aha!” moment that led you to start your business.
Kobo 360 is an e-logistics platform, basically Uber for trucks across Nairobi and, soon, pan-Africa. The idea came in 2014 when I was still in the United States and we were shipping goods to Nigeria. It would take one week to move goods 1,000 kilometers in Nigeria. We saw massive inefficiencies, so we started looking into it and in 2018 we started an app that connects drivers to cargo owners. Today, that journey takes just about three days.
We have about 7,000 trucks on the platform now, all of them are independent contractors. We’ve moved close to 200 million metric tons in the 11 months of Kobo so far. We’re working with Nestle, Honeywell, DHL, and Coca-Cola. Our target is to have over 200,000 trucks by the next 36 months, which means we will have supported about 400,000 jobs on the platform.
What’s your number one tip for new entrepreneurs?
We don’t have all the resources that Silicon Valley has. There’s a lack of infrastructure, there’s not a lot of venture capital activities going on, so you just have to put your head down and execute. That’s the key thing.
How can governments support the development of an entrepreneurial culture in Africa?
It’s a partnership between the governments and the entrepreneurs across the continent. Entrepreneurs bring ideas. Governments can support us by doing their own part, which is infrastructure and policies.