Over the last month, new developments surrounding the Africa Free Trade Agreement (AfCFTA) have brought a fresh wave of excitement to a variety of sectors with the prospect of access to new, continental African markets drawing closer. From retail to manufacturing, different industries have arisen in conversations on where the bill will impact change the most. Most recently, one company from the logistics sector hit the headlines in a major way and is a representation of the very heart of what the agreement is designed to do – improve intra-African trade.
Kobo360, the digital technology platform disrupting and leading African third-party logistics, recently announced the completion of a $20M Series A equity round led by Goldman Sachs as well as the likes of the International Finance Corporation, TLcom Capital, Asia Africa Investment and Consulting and Y Combinator. With an additional $10M in local currency secured from Nigerian commercial banks, the fundraise speaks to not only how impactful the AfCFTA will be on trade, but also the high regard in which international investors and African banking institutions hold Kobo360, a company taking the logistics and wider African tech scene by storm.
Founded in 2017, Obi Ozor, a Wharton Alum and ex-Uber Nigeria and his co-founder Ife Oyedele II, Kobo360 are building a digital logistics platform that enables the development of an efficient supply chain for end-to-end long-haul freight operations, connecting and supporting cargo owners, truck owners & drivers, and cargo recipients. Fresh from their $6mn fundraise just last year, the YCombinator-alumni have had an exceptional year, beating e-commerce platform Jumia to win “Disrupter of the Year” at the 2019 Africa CEO Forum, as well as securing double-digit investment and expanding across the continent.
Having launched in Togo, Ghana and Kenya this year, the company expects to move into 10 new countries by the end of 2020 and plans to use their new investment to scale their organization, strengthen their tech offering and accelerate supply growth.
I caught up with their dynamic CEO, Obi Ozor, to get a glimpse into the mindset behind what is fast-becoming one of Africa’s most important startups.
Raising $30mn in Series A, on top of $6m as a Seed round, in just two years since you launched, is a significant feat – are you surprised by the speed of your progress?
Credibility has been our most important asset to our success – this is how we’ve been able to position ourselves in front of a global investors such as Goldman Sachs. Our track record speaks for itself – we’ve moved over 5000Mkg, aggregated a fleet of over 10,000, serviced thousands of SMEs and partnered with over 80 global logistics partners including Dangote Group, DHL and Unilever – all within two years.
Like most startups, we’re a highly ambitious group at Kobo360 but what sets us apart is our focus on execution. It’s one of the things that’s got us to where we are today. The very problem we’re solving in the logistics sector is how to get Africa on the move and we take this same direct approach into all aspects of our business. That’s what produces results. That’s what our investors focused on when we opened discussions with them.
I think a good example of this has been our country expansions this year. We’re a company that started in Nigeria but we already consider ourselves to be a Pan-African company, with tech solutions that will change how the whole continent does business. Once we refined our business model in Nigeria, we made swift steps to move into three countries and we’re not stopping there. We’re in a $150bn sector ripe with opportunity so you have to be dynamic when opportunities present themselves.
You’ve been previously referred to as the logistics version of your former company, Uber – a company whose relationship with its drivers has been fractious at times. How do you plan to keep your drivers on side at Kobo360?
Kobo360 wouldn’t be where we are today without our truck drivers. Plain and simple. Right from the start of our journey, we’ve made it a point to ensure our drivers are well-taken care of as they’re such a crucial part of our team and the supply chain. We’re looking to raise our driver fleet from 10,000 but behind the scenes, we’ve been putting our efforts towards optimising our current offerings for our current and future drivers when they arrive.
For example, drivers running trips on the Kobo360 platform are already increasing their monthly earnings by 40%. In addition to this, we also provide access to a range of services including access to up to $5,000 monthly working capital, insurance products, and discounted petrol, comprehensive HMO packages and an incentive-based education program for drivers’ families through our driver-empowerment programs KoPAY, KoboSAFE and KoboCARE. We have drivers from a range of backgrounds on the continent, which is why we’ve adapted our apps to accommodate local languages such as Hausa, Pidgin, Twi, Swahili and French. But this feature also speaks to an inclusive approach we’re taking to another issue on the continent – unemployment.
With the AfCFTA coming into effect and our planned expansions, we’ll need more truck drivers from across the continent and we want to provide an opportunity for them to secure their financial futures. It’s not just about saying we value our drivers, it’s about backing it up with tangible measures to show they’re a massive part of the Kobo360 family.
Now to the hot topic on the continent – the Africa Continental Free Trade Agreement. In your own words, where does Kobo360 play a role in ensuring Africa makes the most of the agreement?
There’s obviously set to be an influx of inter-regional trade and our job is to facilitate that. In theory, it’s an exciting prospect for a lot of SMEs but they’re still dealing with the realities of poor supply chains in their domestic markets. Think about it – if you’re a business in Lagos and you’re worried about whether your cargo will make it in good condition (or even at all) to Abuja, the prospect of you transporting goods from Lagos to Nairobi is a distant reality.
But that’s where we come in – from location-based technologies to temperature-controlled storage, we’re investing in tech that gives businesses the necessary transparency and peace of mind over their cargo. These are issues that don’t go away if you’re a multinational. The AfCFTA makes the continent a much more attractive proposition to foreign companies who will need a partner who can deliver their goods on time and in the right condition.
This all feeds into our strategy to build our Global Logistics Operating System (G-LOS) – a blockchain-enabled platform that will leverage technology to combine all activities in the lifecycle of the Supply Chain ecosystem into one robust system and connect logistics across Africa – however, we’re already in a strong position to support all types of businesses (SMEs or multinationals) when they decide to make the most of the agreement.