The Nigerian digital technology freight logistics startup, Kobo360 has raised a total sum of $30 million funding; part debt funding and part venture funding. It raised a $20 million Series A equity round led by Goldman Sachs, with participation from Asia Africa Investment and Consulting Pte, and existing investors including the International Finance Corporation, Y Combination and TLcom Capital.
The company also announced that it raised an additional $10 million in local currency working capital from Nigerian commercial banks. This new funding round follows a $6 million seed investment last year led by the International Finance Corporation which enabled the company to expand to Togo, Ghana and Kenya.
In a statement on Wednesday, 14th of August, the company said it plans to broaden its reach in Africa significantly by entering ten new countries beyond its current operating markets of Nigeria, Togo, Ghana and Kenya by the end of 2020. According to the CEO, Obi Ozor, the final decisions on the 10 new countries will be made by the first quarter 2020.
With the funding, the team said it will “continue to scale the organisation, develop the technology offering, and accelerate supply growth.”
Kobo360 is also “planning to add 25,000 drivers to the platform in the coming months to power the recent Africa Trade Continental Agreement, expected to catalyse intra-African trade.”
Speaking on this, Obi Ozor, Co-founder and CEO of Kobo360 said, “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.
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%, as we work together to mobilise logistics across Africa.”
As a cross-border freight service, the company intends to maximise this funding to benefit from the Africa’s Continental Free Trade Area (AFCFTA) which was signed this year by all the 54 countries in Africa to reduce friction and barriers on Pan-African commercial activity.
The startup expects to have a voice in the final implementation of AFCTA, in addition to lower costs for its country-to-country freight movement. On this, Ozor said, “We’re going to do some policy work through the IFC so we can help shape AFCTA. The key to the deal is really logistics, so if the logistics component doesn’t work out the deal isn’t going to work”.
The company’s plan is to use a part of this new funding to build out its Global Logistics Operating System. GLOS (shortened form) is a blockchain-enabled platform that will help the company to transition to more supply-chain services.
Launched in 2017 by two Nigerian entrepreneurs – Obi Ozor and Ife Oyedele II, this latest funding has made Kobo360 the second top-funded transport and logistics startup in Africa with investors betting on the company’s ability to meet a rise in demand for cargo deliveries while riding on the back of the AFCFTA.