Can AirBnB Master The ABCs Of Africa?

Team WeeTracker November 20

Ten years back, who was to say that a colossal disruption is coming for the accommodation industry? Nobody in their imagination would have anticipated that hotels will have to face competition not just from other hotels, but from anyone with a spare room in their home. But then, nobody could have either thought there were ways to find a taxi other than waiting for one on a roadside, or that your favourite restaurant will deliver to you and you would no longer have to go out on a rainy Sunday to get the most delicious items from its menu. All this has now become a habit for most people. It’s almost tough to imagine a time when we once lived, and happily too, without these conveniences. That’s the things about disruptors. They come, they disrupt, and they stay for a very long time (until the next one arrives).

Airbnb started in the time that saw new trust building with peer-to-peer networks, and a plethora of companies acting only as a platform for people to engage, and not directly providing any services. The attitude of home-owners has witnessed a change. They have opened their doors to welcome guests, and sufficiently earn in the process. It has tweaked the notion of tourism altogether. The idea of not staying in a hotel but putting up with some unknown locals on a trip seems normal. The hotel industry sees it as its one of the strongest competitors. In a decade, it could change the perspectives of people around the world, how is it doing in some of the nascent ecosystems? Let’s take a look.

 

The ABC of BNB

Airbnb is a San Francisco-based online marketplace and hospitality platform which began its operations in 2008. It currently boasts a presence in 191 countries worldwide. The company can be considered a disruptor of the traditional hotel industry as it is believed to have around 4.85 million listings worldwide and perhaps to a slightly less impressive extent, around only 100,000 of those in Africa.

 

 

With those figures in mind, it could be surmised that Airbnb doesn’t quite have as much a stronghold or as loud clout in Africa as it does in some other parts. And it may be construed that Africa doesn’t quite cut it as a significant revenue stop for Airbnb or the company just hasn’t gained as much ground in the African hospitality market as it has in some others — a claim that might become quite evident when comparisons and juxtapositions are made between facts and figures from Africa and those obtainable from the more established hospitality destinations. This factor can be thought to not exactly be doing justice to the company’s plans of establishing a strong presence in every part of the world.

Nevertheless, Airbnb’s apparent shortcomings in Africa do not necessarily take away all the gloss from the shine that it has reflected off the continent’s hospitality market so far. In spite of all there is to be done and the lot that is still left to be desired, it is undeniable that the growth has been tremendous and it will be utterly unfair to assert that the company hasn’t come mostly good in these quarters. Referring to some of the recent numbers does a good job of underlining just how much progress has been made.

Also Read: Naspers Teardown: How This African Newspaper Became One Of The Largest Companies In The World

What do the figures say?

For starters, out of the 3.5 million guest arrivals in Africa that have been recorded on the Airbnb platform since its founding, around half that number has occurred during the last year. Of the eight fastest-growing countries in the world in terms of guest arrivals on the platform, three are from Africa. These include Africa’s most populous nation; Nigeria, which is believed to be witnessing a triple-digit YOY guest arrival growth of around 213%, their Western African neighbours, Ghana; which is also on a roll with a growth rate of 141%, and Mozambique making up the top three with a respectable 136%.

South Africa, Airbnb’s largest African market, is still waxing strong and going steady at a growth rate of 65%; a feat that is made all the more glaring by the fact around 2 million of the total 3.5 million guest arrivals in Africa have been in SA alone. Now, if we attach some credence this one time to the notion that numbers don’t lie and they don’t, perhaps we can suffice it to imply that Airbnb is doing a satisfactory job in Africa. But is that the case?

 

 

Gaining strong foothold

With multiple initiatives in Africa and policies that might be suggestive of an onslaught on the market, Airbnb’s posture depicts an interest making the most of the tremendous opportunities that are available in African hospitality industry. A good illustration of this improved posture can be cited in its collaboration with the Mother City, Cape Town. This example is unique in that it represents Airbnb’s first partnership with an African city, even though the company is known to have already collaborated with over 300 governments worldwide.

But there is more to indicate that the company may indeed be shaping up for major investments in Africa. In 2017, Airbnb announced USD 1 Mn in investments through the year 2020 to promote community-led tourism on the continent. Following in a similar narrative, the company is also known to have held a conference tagged: Airbnb Africa Travel Summit, which was a 3-day event that drew to a close on 13th September 2018 in Cape Town — a feat that might indicate the company’s renewed interest in the African market. The summit is believed to have brought together over 200 travel and tourism delegates from the continent that connected to exchange ideas and information on such details as ways through which the industry can be made more profitable, as well as the intricacies related to accelerating tech-tourism in Africa.

Another initiative from the company is the Airbnb Africa Academy (the first session took place in August 2018 in Johannesburg, followed by Cape Town); a free hospitality program for people from rural and under-resourced communities which seeks to provide them with tools and information that can be utilized in their spaces for the creation of unique listings or Experiences on Airbnb. From the Airbnb perspective, Experiences can be thought of as activities or excursions organised by local hosts to familiarise guests with the cultures of the city. This can range from indulging in urban farming to enjoying the city’s best nightlife. The service was first launched in Africa in Cape Town in 2016. It is now open to all hosts across South Africa.

From those last two words in the preceding sentence, perhaps from the last three paragraphs too, and even from data that is soon to follow, putting two and two together might suggest that Airbnb’s presence in Africa is largely concentrated or centred around South Africa as it is evident that the country is seeing most of the action. While this trend may be founded on legitimate business reasons, the lopsided nature of the development does stick out like a sore thumb and considering the sheer amount potential in a number of other African destinations, doesn’t that provoke thought?

Here are some statistics of Airbnb’s Africa business as of September 2017, to give our readers a deep insight into the company’s presence on the continent, and reflect what a growing market Africa is for the travel industry.

 

 

Not everything is hunky-dory!

Airbnb’s success across the world is attributed to its innovative model where users can experience the cultures and the traditions associated with the place, and the competitive pricing it offers. As can be deduced from its business model, Airbnb targets tourists who do not want to enclose themselves in the four walls of a hotel while on a visit to a destination but would instead move about and engage in what the local community has to offer. The platform can be said to give travellers and holidaymakers the opportunity to experience the destination truly.

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Examining the data available, however, does reveal a something of a worrying bit in terms of the earnings of hosts which can be perceived as quite low in some quarters. A typical host in South Africa, for example, was found to be earning USD 1.9 K annually for giving out a property on rent for an average of 19 nights a year. When juxtaposed with the popularity of the platform, and the fact that 47 percent of the hosts are using their Airbnb earnings to help afford staying in their homes (according to Airbnb), that figure may come across as somewhat negatively-skewed.

What Murray Cox, the founder of AirDNA and InsideAirbnb, had to say about this is quite interesting. To quote him,

“Airbnb understates the earnings of hosts primarily, in my opinion, to make a case with cities, states and regions that they should be unregulated.”

According to his survey, hosts in Cape Town were making USD 3.36 K annually on average for around 38 nights a year. The apparent discrepancy in the values could be attributed to the fact that Airbnb tends to adopt medians and not averages as its preferred measure of central tendency, and this may, perhaps, have something to do with minimising the commercial nature of their business. From a statistical standpoint, calculating central tendencies using medians have a tendency to mask the figures on the higher side.

Taking a brief look at the rental housing industry, there appears to be an issue in South Africa with Cape Town facing a shortage of what is believed to be around 100,000 housing units. In other words, middle and working-class residents are having a hard time finding affordable houses to rent there. And part of the reason for this challenge could be connected to the fact that more and more homeowners are registering on Airbnb, and in the process, are taking away with them the quality and prime location houses available in the market as is dictated by Airbnb’s standards. This is believed to leave a significant number of residents with the unsavoury option of settling for low-quality houses at far away locations, and at prices that are really high.

But unlike long-term rental industry, Airbnb does require a lot of time and effort (in terms of managing bookings, catering to guests, handling check-ins and check-outs, etc).  The more common practice, especially in long-term rentals, would be to hire managers for this, but that also comes with its own cost implications. In a survey conducted by WeeTracker, one of the respondents from Lagos, Nigeria, who previously had 9 listings on Airbnb, and has now brought them down to two (the rest of them are now tied up in long-term rentals), remarked; “After the initial excitement around Airbnb wears off, it becomes clear that long-term is far more profitable.” If the claims of the Nigerian host do hold water, this could imply that Airbnb might have its work cut out for it in the area of making itself more profitable and attracting top-notch listings from hosts in this region who appear to be disenchanted with the current mechanisms and are exploring other routes and channels.

 

Lopsided Growth

It is a contrasting narrative from South Africa where it would seem Airbnb has somewhat set up shop and is doing pretty good. The country currently boasts the largest number of Airbnb listings in Africa, which in turn boosts its tourism sector significantly. South Africa generated USD 247 Mn from hosts and guests activity in 2017. This number has seen a phenomenal jump in 2018 as it now stands at USD 678 Mn — roughly a three-fold increase. South African hosts have earned USD 260 Mn since Airbnb made its first foray into the country’s hospitality and tourism market.

Interestingly, these earnings from South Africa alone account for a whopping 65 percent of what the hosts across Africa have earned till date (USD 400 Mn). And to further buttress the point that Airbnb has a roll in SA compared to other African countries with, arguably, just as much tourism and hospitality potential, Cape Town, which lays claim to one-third of SA’s listings, is known to offer over 100 Airbnb Experiences, of which 30 percent is focused on social impact. 100 percent of the revenues generated are believed to go to NPOs. But in any case, South Africans are still making a lot from such services. Someone hosting Experiences 6 times a month in SA is known to be earning up to USD 14 K annually. The relative success which the company has enjoyed thus far in SA, which sort of eclipses what is being done in other parts of Africa and blows everyone else out of the water, might indicate that Airbnb has had its foot on the gas in the country for so long, and it’s about time it started paying attention to other markets if the apparent disparity is to be addressed.

 

 

The disproportional popularity of South Africa as a market, according to Velma Corcoran, Airbnb’s SA manager, who revealed in an interview with Business Insider, is hinged on the idea that “Airbnb has a very compact team, which created the need to focus only on strategic markets like SA. The company’s next step is to spread across Africa while driving sustainable growth in tourism.” When questioned about the challenges and drawbacks hampering the ease of its spread throughout Africa in the same interview, she offered that the biggest hurdle is to change the perception of foreigners towards Africa. To quote her,

 

“It is important for us to help people understand that Africa is a continent and not a country, and for them to grasp the breadth and depth of what the continent has to offer.”

 

This appears to be another area where the company has its work cut out for it as it would seem the company might just be guilty of a lighter version of the same sin — the sin of thinking Africa a country — especially since it is beginning to increasingly seem like Africa has been somewhat reduced to South Africa in the measurement of its business on the continent. It is true that so much has already been done but looking at the big picture; it would seem like a “tiny blue dot” compared to what is yet to be done, which could be thought of as all that matters in the grandest scheme of things. So, perhaps the company needs to take a break from SA where it appears to have steamrolled thus far and intensified its efforts in other parts of Africa. This could do it a whole world of good especially as it isn’t precisely hegemony and it doesn’t exactly hold a monopoly over the market since there are other platforms like SleepOut.com, TravelGround, and Afristay among others, which could serve up stiff competition both within and outside the continent.

 

One Last Glance!

The total contribution of the travel and tourism industry to Africa’s GDP is estimated to grow at 3.8 percent in 2018, escalating it to around USD 120 Bn. The growth rate for the US will be somewhere around 3.2 percent. This may, in some ways, reflect how the absolute numbers (bookings/guest arrivals) might not be so impressive for Africa today and perhaps still leave a lot to be desired, but the growth potential it holds cannot be overlooked. As the contribution of the travel and tourism to the global economy continues to grow, emerging tourist destinations are expected to expand at the double the rate than the established destinations.

Data Source: Airbnb report

Egypt’s Nawah Scientific Gets USD 1 Mn Funding Boost From Endure Capital

Nzekwe Henry December 10

Egyptian research startup, Nawah Scientific, has secured an investment worth USD 1 Mn in a pre-Series A round led by Endure Capital, with 500 Startups, Averroes Ventures, Egypt Ventures, and angel investor, Dr. A. Abdelhamid, also joining the funding round. This is the first time the startup is raising external investment.

Nawah Scientific is a Cairo-based startup that appears to be carving a niche for itself in the area of scientific research. The startup which was founded in 2015 by Dr. Omar Sakr; a PhD holder in the field of Pharmaceutical Sciences, boasts a collection of advanced equipment that is suited to the research and development needs of both natural and medical sciences.

Nawah Scientific helps scientists and universities who do not have access to sophisticated equipment and facilities carry out critical research tests that would be otherwise improbable or too much to ask.

The startup goes about this by receiving experiment requests via its online platform. Through a courier, the test samples are moved under prime conditions from the address of the client that made the request to premises of the startup.

A team of competent in-house scientists then take the reins from that point onwards as the required tests are carried out and the test results are relayed to the client via the startup’s online platform. Through this simple but effective mode of operation, Nawah Scientific is able to cater for the needs of researchers as it affords scientists access to top-notch research facilities, whilst fostering scientific research in both Egypt and beyond.

Having been established barely three years prior, Nawah Scientific claims to have offered its services to clients within and outside Egypt. So far, the startup claims to have analyzed as many as 15,000 samples from 32 universities. But the services of the startup do not stop at scientists and academia as it also carries out complicated research projects and simple analysis for chemical and pharmaceutical companies.

Commenting on the development, Dr. Omar Sakr, Founder and CEO of Nawah Scientific, tethered his motivation for establishing the startup to the need to make access to cutting-edge research and high-tech equipment more available.

He also noted that a lot of time that should otherwise be put into meaningful work is spent by scientists shuttling between cities and universities to have their samples tested. And in the process, yielding unreliable research projects that are shallow at best. According to the CEO, this has put a strain on the trust between industry and academia resulting in a poor ‘research-to-product’ conversion rate. He, however, believes that the startup is now better poised to fix these problems.

With the latest development, Nawah Scientific has now become one of the first life sciences startups in the MENA region that has achieved success in raising significant investment. Since its inception, the startup has posted an impressive year-on-year growth and this can be thought to have gone some way towards attracting and closing the investment deal. And this bodes well for other science-based startups in the region as the company appears to have broken the proverbial glass ceiling.

Speaking with regards to the investment, Tarek Fahim, Managing Partner of Endure Capital, opined that biotech startups share a lot in common with software startups before AWS and rapid development tools. He also stressed the importance of infrastructure players who can push boundaries to the growth and sustainability of biotech enterprises, stating that they can help “lower cost for starting and increase the speed of prototyping.”

Egypt Ventures; a VC that was launched recently by Egypt’s Ministry of Investment, is believed to be the biggest investor in this round. Hema Ali, Managing Director of the newly launched VC, expressed the company’s excitement at being part of the startup’s journey as it looks to scale its offerings and expand into new markets.

It was this time last year when Nawah Scientific clinched the grand prize in the pitch competition at the 2017 RiseUp Summit. Having emerged winners of the competition, the startup roped in a USD 50 K cash prize.

Now, barely a year on from that night of blitz, the startup appears to be holding its own quite well, and the latest investment worth USD 1 Mn (which is quite substantial given that the startup is raising external capital for the first time) is a testament that Nawah Scientific is on the right track, as this connotes investor confidence.

Plans related to expanding the startup’s services and growing its marketing activities outside of Egypt are expected to get most of the attention with the latest capital injection.

 

 

Feature image CourtesyNawah Scientific

Egyptian Healthtech Startup Vezeeta Raises Investment From IFC

Nzekwe Henry December 10

Egyptian healthtech startup, Vezeeta, has secured an undisclosed amount of investment from World Bank Group’s International Finance Corporation (IFC). This development sees Vezeeta become the first Egyptian technology company to bag a direct investment from the IFC.

Vezeeta is one of the leading healthtech startups in the MENA region and the latest investment from IFC into the Cairo-based company follows a previous announcement which saw the startup close a Series-C round worth USD 12 Mn. That round was led by STV; a Saudi-based investment firm.

Vezeeta was launched in 2012 by Amir Barsoum. The startup makes it possible for patients to search, compare, book, and consult with doctors in Egypt, Saudi Arabia, Jordan, and Lebanon. Vezeeta also assists medical personnel with practice management solutions that help in better management of medical appointments and patient data.

Up to 2 million appointments are believed to be facilitated by the platform on a yearly basis, and that’s according to the startup. More so, Vezeeta claims to have over 10,000 healthcare providers signed on to the platform, providing services to at least 2.5 million patients in the region.

With regards to the development, Amir Barsoum, Founder and CEO of Vezeeta, offered that the investment from a “global power” like the IFC will help accelerate the growth of the startup, as well as buoy its plans of building a formidable global network.

Chief Executive Officer of the IFC, Philippe Le Houerou, also commented on the development expressing his confidence in the ability of Vezeeta to drive innovation in the MENA region. The CEO also expressed delight at the prospect of African entrepreneurs harnessing their creativity and drive with the power of novel technologies to address some of the continent’s most pressing problems.

Vezeeta’s Chief Technology Officer, Adel Khalil, also rendered his voice in support of the development reiterating its importance in helping the startup keep up with its mandate of empowering millions of patients in the region, and making sure patients and healthcare providers are seamlessly connected by leveraging data and new products in healthcare.

Mohammad Elmougi echoed, Vezeeta’s VP North Africa, echoed the thoughts of the CTO when he hinted at the commitment of the startup to pulling down all accessibility barriers and improving the quality of healthcare experienced by patients in the region through the elimination of all the bottlenecks that currently bedevil quality healthcare service accessibility.

While this is undoubtedly the IFC’s very first direct investment in an Egyptian technology venture, it would, however, not be the first this investment arm of the World Bank Group is throwing about its financial weight in the MENA region. Over the course of the past few years,  the IFC is known to have made funding commitments worth over USD 100 Mn in startups, venture funds, and accelerators across the Middle East and North Africa, including such Egyptian ventures as Flat6Labs and Algebra Ventures.

 

Feature image courtesyMENAbytes

Ugandan Startup Swipe2pay Swipes Away USD 40K At BRIDGE East Africa Startup Pitch

Kevin Gachiri December 10

Swipe2pay, a Ugandan startup was picked as the winner of BRIDGE East Africa Startup pitch and secured USD 40K at Weetracker’s first flagship conference event held at Crowne Plaza on 7th December in Nairobi. The announcement was made by Takuma Terakubo the CEO of Leapfrog Ventures whose joint partnership with Weetracker made the event possible. Leapfrog Ventures will add Swipe2pay to its roster of startups, it is funding in East Africa. Other startups that took part in the pitch included Yusudi, Talklift, Zumi and Asilimia.

The Selection of Swipe2pay came as a surprise considering that each of the 5 startups had delivered convincing pitches in front of the panel that comprised Japanese investors on tour in Africa, some for the first time. Solomon Kitumba, CEO Swipe2pay, had come from pitching at #slush18 in Helsinki arriving in time to make his pitch as the last participant for the day. Swipe2pay makes it possible for informal businesses that accept cash from customers to be able to accept digital payments as well as credit card transactions. The startup which was founded in 2017, is already integrated with Visa and Mastercard.

In an interview with Weetracker, Solomon intimated that “We are already active in Uganda with a majority of our customers coming from Mbarara and Jinja. We have built a regular customer base of 550 regular users on our  platform with transactions sometimes growing upto 3,500 per day when we get very busy.”

According to their website, the solution they provide to customers also includes their provision of daily, weekly and monthly reports. The fintech startup has integration with Kenya’s MPESA making it possible for them to venture into the local Kenyan market as well.

Solomon is assisted by a team of six who play different roles in driving the business forward and the funding they have received will go into product development as well as strengthening its talent pool which would be necessary for looking at how the product can be polished, refined or extend its features. Having grown in rural Uganda, Solomon had observed how informal market traders mostly women fail to access finance since they don’t keep records or any form of payments they receive from clients.  This makes it difficult to get credit reference. The need to accept funds from clients who wish to pay by cards also means that they usually turn away clients from this customer segment. Swipe2pay, therefore, helps in attracting more customers.  It is this discovery that made Solomon devise a method of bringing a better solution to these informal traders.

Weetracker’s BRIDGE East Africa, held in Kenya drew a substantial crowd of investors from Japan as well as attendance of local investors, venture capitalists and seasoned entrepreneurs. The event hosted startup pitches that were held in between the panel discussions and fireside chats with selected guests. Leapfrog Ventures announced at the event that it is looking at making 200 investments in Africa in the coming 3 years.

What You Should Know About Google Hangouts’ Rumored Shutdown

Andrew Christian December 9

Sources familiar with the tech giant’s product’s internal roadmap have reported that 2019 will be the last year for Google Hangouts, as the company plans to shut it down by the year 2020. The development, to nearly no one’s surprise, is a reiteration which accompanies the company’s apparent decision to hold off on further developments on the app more than a year ago.

Google had previously announced its pivot for the Hangouts brand for enterprise use scenarios with Hangout Chat and Hangout Meet, so it has been telling for a while that the consumer app would soon cease to exist. With the abandonment of Google Hangouts concerning development and its presumed final extinction, many entrepreneurs have begun charting a course away from the app, even though it will remain a prominent official chat option in Gmail on the web – continuing on the Google Play Store even now. In line with recent reviews, the app has shown signs of ageing which are evident in its display of bugs and performance glitches.

Hangout as a brand will remain with G Suite’s Hangout Chat and Hangouts Meet, with the former tailored for Slack app-comparable team communication and the latter as a video meetings platform. In the same line, Google Voice calling, which was initially independent and then integrated into Hangouts, was restored to its own redesigned app earlier this year.

Worthy of interest is that in spite of its inevitable axing, Hangouts was one of the few apps to receive early support for Android Auto’s new MMS and RCS functionality, alongside Whatsapp and Android Messages.

Nonetheless, Google’s Scott Johnson has chimed in on this development and denied any decision being made about the timeline of legacy Hangouts’ shutdown. He did confirm that users of consumer Hangouts will somehow be upgraded to Hangouts Chat and Hangouts Meet, both of which have been presented as enterprise-focused products that fill different needs. Scott also confirmed rather explicitly that Hangouts Classic, which is the subject of this development, will eventually be “shutting down’. Meanwhile, there are sources which corroborate the initial report, informing that decisions have been made for the depreciation of legacy Hangouts.

Most of us consider the Chat and Meet to be more business-focused products, and these plans make the situation seem as though they could have more of a consumer-facing component in the future. For entrepreneurs who have continued to use Hangouts, and who are now coming to rely on Slack or Discord style at-mentions, having such features in Hangouts may be somewhat snazzy. If the rumour of Hangouts’ death or transition are true or have been exaggerated, it wouldn’t matter so much if the new upgrades come with those new features.

Meanwhile, another source reports that Google provided an update on its current efforts, and now focuses moving towards a simpler communication experience. Starting on the consumer front, Google has “decided to stop supporting Allo to focus on Messages.” In April this year, Google only noted that it was “holding off investment” on Allo, but the tech giant confirmed that the service is about to get the sunset. Allo will be available until March 2019, with the service continuing to work until then; disregarding today’s downtime. Google has furnished us with details on how users can export existing conversation history from the app.

Google Hangouts, for as long as it has been in use, hasn’t disappointed entrepreneurs, as it can be a great asset to a company of any size – even more ideal for smaller businesses and startups. The app allows you to connect with employees easily, business colleagues and clients via calls and video chat making it seamless for those who travel or work from home. Hangouts also afford companies the flexibility of connection form virtually any smart device. Users can also, during chats, share files via Google Drive, stream live broadcast, participate in webinars and hold staff meetings amongst many more.

As customers will be able to review your business as an accessible one that cares about customer satisfaction, using Google Hangouts is a marketing strategy with all the makings of greatness. With weekly/monthly question and answer sessions, customer chats and feedback reception, you can not only appeal to customers but receive immediate interactions that can help you develop a more robust marketing strategy. Taylor Swift hosted a Google+ Hangout to announce her new album, and with the medium, she was able to reach fans from all over the world – making her song hit number one right after its release.

This goes to say that Hangouts is a great way to make business announcements such as funding rounds, product launches, expansion or any other news that customers may be interested in. The app is also useful in holding online staff meetings, and conference calls with important clients even while you are in transit.

We are yet to find out the actual features that will come with the storied Hangouts Chat and Hangouts Meet as replacements to the authority-building, customer-gathering, engaging, and collaborative Google Hangouts. 2020 is more than a year from now, so while Sundar Pichai and his team of techies decide the fate of this G Suite member, we still have no less than 12 months to enjoy the existing chat room app.

Nigeria’s Logistics Startup Kobo360 Raises USD 6 Mn From World Bank’s IFC

Andrew Christian December 7

Nigeria’s Uber-like trucking logistics startup Kobo360 has raised USD 6 Mn in its second investment round this year. The equity financing which was gained from World Bank ’s sister organization IFC, will help the company upgrade its e-logistics platform and spread its tentacles to Ghana, Togo and Ivory Coast.

This recent investment for Kobo360, which also involved efforts from other platforms such as TLom Capital and Y Combinator, will be used by the startup to become more than just a transit app. The founder, Obi Ozor, told Techcrunch that the company broke into the logistics market as an app that connects truckers and companies with freight needs, but now looks to build a global logistics operating system and become a full-fledged platform.

While bridging the gap between truckers, producers and distributors, Kobo360 is now chomping at bit to build the platform that will offer supply chain management tools for enterprise customers. In a statement, Ozor revealed that large firms are now demanding for movement, tracking and sales-related specific features, which is why the startup is looking to leverage two options – integrate other services such as SAP into Kobo or building the solutions directly into the e-logistics platform.

With this new investment round, the startup will sally forth with the said upgrade by developing its API and opening it up to for the use to large enterprise customers. With the intent for clients to use Kobo360’s dashboard for everything from moving goods, tracking, sales and accounting, the platform wishes to tackle the challenges faced by its customers.

It is also reported that the company will forge a more physical Nigerian presence in order to serve its customers better. Concerned about truck movements and monitoring, helping operation’s collect proof of delivery and accessing trucker owners more closely for inspection and training purposes, Kobo360 is poised to launch 100 hubs before the end of 2019, according to its founder.

The startup, remaining “aggressively” focused on reducing logistics friction for large enterprises and SMEs alike, alongside connecting new markets and unlock better community wellbeing, will add more warehousing capabilities to support its reverse logistics business. By matching trucks with return freight after they drop their loads, Kobo360 will bring down prices and eliminate the return-empty challenge facing its customers.

In a statement, the IFC enthused that the company currently has over 5000 trucks empanelled on its platform, from more than 600 small fleet owners, serving some of the largest enterprises in Nigeria. Kobo360 told Techcrunch in January that it is looking to add 20,000 trucks to its platform and latch on to the expansion which is now made possible by its USD 6 Mn raise. According to the founder, the expansion, which is scheduled to take off in 2019, will be with existing customers – one in the port operations business, another in FMCG and the last in agriculture.

As a matter of strategic priority, the funding, which was announced by both parties on the eve of the opening of the IFC’s Next 100 African Startups Initiative, will be used by the startup to also expand programs and services for its driver members. Along this line, Ozor remarked that neglecting drivers would crumble the company to a pile of issues while iterating that the same loophole hinders ride-hailing companies from becoming trillion-dollar enterprises.

Because owning trucks may be too cumbersome to handle, Ozor opines that the best scalable model is to aggregate trucks, while handling more volume at cheaper prices to leverage the startup’s asset-free digital platform and business model to outpace traditional long-haul 3PL providers in Nigeria.

According to a Weetracker report, Kobo360 raised USD 1.2 Mn in June this year from U.S venture capital firm Western Technology Investment and became a Y-Combinator cohort, while receiving USD 120 K equity investment from the seed fund. The logistics startup, which has served 900 businesses, aggregated a fleet of 8000 drivers and moved 155 million kilograms, is welcoming IFC’s regional head for Africa, Wale Ayeni and TLcom’s senior partner Omobola Johnson to take seats at its board.

Kobo360 also offers training and programs on insurance, discount petrol and vehicle financing to its drivers. The startup has also created an HMO for drivers, alongside an incentive-based program to afford education, which is monikered as KoboCare. The company’s top clients include Honeywell, Dangote, Unilever, Olam and DHL.

 

Featured Image Courtesy: Macktrucks

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