Nigerian logistics startup Kobo360 is about to achieve a great milestone in its development as it recently secured a US$30 million debt and equity funding round led by Goldman Sachs to power its expansion across Africa.
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, Kenya and Togo, and has now secured its biggest investment yet. It has completed a US$20 million Series A equity round led by Goldman Sachs with participation from Asia Africa Investment and Consulting and existing investors including TLcom Capital, Y Combinator, and the International Finance Corporation (IFC).
An additional US$10 million in local currency working capital financing has been secured from Nigerian commercial banks. The investment will be used to help Kobo360 continue to scale, develop its technology offering and accelerate supply growth. The startup plans to add 25,000 drivers to the platform in the coming months to power the recent Africa Free Trade Continental Agreement, and is also planning to significantly broaden its reach in Africa, entering 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.”
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.
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.
“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.