Nigeria’s Kobo360 closes whopping $20m Series-A round led by Goldman Sachs

Nigerian logistics platform Kobo360 has closed what is likely the second biggest investment for an African tech startup in 2019 so far, after concluding a $20-million Series-A funding round led by US multinational investment bank and financial services company Goldman Sachs.

The deal is likely second only to Egyptian transportation startup Swvl‘s $42-million round announced in June (see this story).

Both may be dwarfed by Andela’s $100-million and Carepay’s $45-million rounds — according to an article in June by Ugandan tech publication Digest Africa — however both Andela and Carepay are headquartered outside of Africa (Andela in the US and Carepay in The Netherlands).

Kobo360 also secured $10-million in working capital financing from Nigerian commercial banks

Kobo360 describes itself as “the marketplace for shippers and transporters”. Its digital logistics platform aggregates end-to-end haulage operations to help cargo owners, truck owners and drivers, as well as cargo recipients to achieve an efficient supply-chain framework.

The platform was launched in 2017 by CEO Obi Ozor and CTO Ife Oyedele (pictured above, from left to right).

Kobo360 said in a statement earlier today that Asia Africa Investment and Consulting also participated in the round, along with existing investors TLcom Capital, Y Combinator and the International Finance Corporation (IFC).

Oyedele told Ventureburn the Series-A round was concluded last week. ” It’s been several months in the making, and we spoke to a number of global and African investors during this round,” he said.

In addition to the round, Kobo360 also said it has secured an additional $10-million in local currency working capital financing from three Nigerian commercial banks, namely FCMB, Polaris Bank and Fidelity Bank.

Kobo360’s platform aggregates a fleet of over 10 000 drivers and trucks, with operations in Nigeria, Ghana, Kenya and Togo.

The startup pointed out that it services small businesses and large enterprises that include Dangote Group, DHL, Unilever, Olam, African Industries, Flour Mills of Nigeria, and Lafarge.

Boost presence in Southern and Central Africa

Kobo360 said the funding will help the startup scale by adding 25 000 more drivers in the coming months, as well as by developing its tech platform — particularly its Global Logistics Operating System (G-LOS).

G-LOS, Oyedele explained, is a blockchain-enabled platform that will leverage technology to combine all activities in the lifecycle of the supply chain ecosystem into “one robust system”.

“This will also help the company transition to more supply-chain services, ensuring we work harder, smarter and faster for all stakeholders on the Kobo platform,” he said.

Kobo360 is also looking to expand to 10 new countries by the end of 2020. Oyedele did not disclose the names of these countries, however he explained that the startup is looking to boost its presence in Southern and Central Africa.

“We are actively exploring additional countries across the continent; needless to say that we will select strategic ports and trade hubs on the continent, as of course we need to collaborate with centres of large scale industry, and work with cargo suppliers to transport goods,” he said.

Ozor explained in an earlier statement that the funding will allow Kobo360 to grow its team and strengthen its 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,” said Ozor.

‘Africa Free Trade Continental Agreement exciting’

Oyedele described the African Continental Free Trade Agreement (AfCTA) — which has been signed by 54 of the continents 55 countries — as “exciting and important” for the entire continent and for Kobo360 too.

He said the agreement means the full prospect of the African market is now open for collaboration and that businesses can confidently explore growth opportunities that would have previously been difficult or impossible.

Oyedele said with AfCTA facilitating the movement of good across the continent — from agricultural produce, medical supplies to manufactured goods — Kobo360 expects it to lead to healthy competition among key players and increase innovation across the continent.

“In short, we expect it to be good for a business such as ours. The expansion of trade across Africa presents new employment opportunities as more drivers will be needed to transport goods across the continent,” he added.

KoPay product offers working capital

Kobo360 is also developing a suite of driver-focused products to support the drivers on its platform. In addition the startup has also launched KoPay which offers access of up to $5000 in monthly working capital. It also has an insurance product KoboSAFE.

A third product, KoboCare, provides users access to discounted fuel, an incentive-based education programme, as well as comprehensive health maintenance organisation packages.

Kobo360 was in March named Disrupter of the Year at the 2019 Africa CEO Forum Awards in Kigali, Rwanda (see this story).

Last year, the logistics startup landed a $6-million equity investment from the IFC (see this story). The deal came a couple of months after Kobo360 raised $1.2-million in a seed round led by US venture capital firm Western Technology Investment (see this story).

Kobo360 — which won the Best Enterprise Solution at the 2018 AppsAfrica Innovation Awards — was also accepted into Y-Combinator’s 2018 Summer cohort, receiving a $120 000 equity investment from the seed fund.

Read more: Nigeria’s Kobo360 named Disrupter of the Year at 2019 Africa CEO Awards
Read more: Kobo360 lands $6-million equity investment from World Bank’s IFC
Read more: Nigerian logistics startup Kobo360 closes $1.2m seed round

Editor’s note (14 August 2019): The article has been updated to include comments from Kobo360 CTO Ife Oyedele.

Featured image, from left to right: Kobo360 founders CEO Obi Ozor and CTO Ife Oyedele (Supplied)