Tech enabled logistics firm Kobo360 is looking to change the way the sector operates by lowering costs and enhancing customer satisfaction at the same time supporting thousands of freight companies across the region.
When Kobo360 started operations, the logistics sector in Africa was in a dire state with indistinct pricing and interference from exploitative middlemen. More so in some regions in Africa, it could take days, if not weeks to move goods across the country causing businesses to lose money.
Back in the days, things in the logistics space was different; customers had to wait for their cargo in harsh environments coupled with extreme weather conditions as they constantly staring at their watches making frantic calls to truck and cargo drivers who say they are almost reaching the destination for the past 30 minutes.
Logistics firms like Nigerian startup, Kobo360, have seen a major opportunity in bringing speed and efficiency to this chaotic sector.
Its entry into the sector is disrupting the US $150 billion Africa logistics industry, which still mostly relies on telephones, opaque pricing and full of expensive middlemen.
Kobo360 is well aware that the logistics business globally is broadening and getting highly competitive as a result of digitisation. With this progressive growth, there is an increased need for user friendly tools and software solutions to support a timely and accurate collection and reporting of logistics management information.
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Today, it has become easier for logistics firms to track inventory, all thanks to e-logistics systems that track how merchandise and goods are being transported from suppliers to their firm, and also when distributing to the end consumer at the click of a button.
Kobo360’s offering is a digital logistics platform that aggregates end-to-end shipping operations to help cargo owners, drivers, truck owners, and cargo recipients achieve an efficient supply chain framework.
The firm entered the Kenyan market barely five months ago, but its impact has been immediate.
“Kobo360 has been in Kenya for since March, with access to over 3,000 trucks and truck owners. Our presence in Kenya means we are in a position to leverage on the nation’s high technology adoption rate in order to fuel logistics in East Africa and beyond,” Ms Kagure Wamunyu, Kobo360 CEO, Africa Region, says.
One of the biggest benefits for customers has been slashing of costs.
Wamuyu says their services lead to a 20 percent reduction in logistics costs by matching the user’s request with a selection of quality trucks of all categories within 6 hours.
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The company has had a flying start in Kenya. Already, Kobo360 has been able to move 15 million tonnes of cargo, as they eye a piece of the 13 million tonne cargo volumes handled at the port of Mombasa, which has direct access to over 80 ports worldwide.
In Kenya, Kobo360 feels it is excellently positioned.
Kenya has the largest port in East Africa, serving as a gateway to other East African markets.
Further, Kenya’s high rate of adoption of technology means the firm is in pole position to fuel logistics in East Africa and beyond.
“We are growing especially with the high technology adoption rate observed here in Kenya. And now, with the implementation of the recent Africa Free Trade Continental Agreement (ACFTA) the market is set to grow; we will move cargo from the south to the northern tip of Africa,” she says.
It has big plans of scaling up in the immediate future through increasing its driver portfolio as well as the number of countries of operation.
The Nigerian-based firm is planning to add 25,000 drivers to the platform in the coming months to significantly broaden their reach in Africa, especially now with ACFTA, whose aim is to remove trade barriers and friction on Pan-African commercial activity.
With this anticipation, Kobo360 is also looking to expand operations to 10 new countries by the end of 2020, surpassing its current footprint in Uganda, Kenya, Nigeria, Togo and Ghana.
To stay ahead of the competition, Kobo360 has developed a suite of driver-focused products to support the over 10,000 drivers on its platform.
“We have KoPAY which offers access to up to US$5,000 monthly working capital, we also have KoboSAFE, which gives access to insurance product for drivers; as well as KoboCARE, which gives access to discounted petrol, comprehensive all health services packages, and also an incentive-based education programme for drivers’ families,” Wamuyu says.
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Last year, MarketLine research reported that the e-logistics and transport space is growing in Africa, estimating the value of Nigeria’s transportation sector at $6 billion in 2016, with 99.4 percent comprising road freight.
Wamuyu is positive that they will capture a substantial share of this market in order to support the thousands of freight companies who require a safe, reliable and cost effective delivery of their goods to cargo recipients across the region.
Investments
The freight logistics startup raised US$20 million (Kshs 2 billion) in a series A funding round led by Goldman Sachs. An additional US$10 million (Kshs 1 billion) was also raised from Nigerian commercial banks, and has been earmarked as working capital.
“The investment will be used to help Kobo360 continue to scale, develop its technology offering, accelerate supply growth, and also power our expansion across Africa,” Wamuyu says.
Since its launch in Lagos in 2017, Kobo360 has continued to grow its product offerings, Venture Capital backing and customer base. The startup claims a fleet of more than 10,000 drivers and trucks operating on its app. Its top clients include Honeywell, Olam, Unilever, Dangote and DHL.
In Kenya, Kobo360 has attracted investors including Chandaria Capital, Y Combinator, TLcom Capital, WTI, and International Finance Corporation (IFC). The firm’s logistics partners locally include Bidco Africa, Union Logistics limited, and Intraspeed ARCPRO Kenya LTD.
“Challenges are always there, especially when the trucks are in terrains where there are no signals, but so far so good,” states Wamuyu.
Growth
Since launch of operations in Kenya five months ago, the startup has been able to move over 297 million kilogrammes of goods, and serviced over 1,450 businesses with the firms aggregated fleet of over 10, 000 drivers and trucks.
Kobo360 covers 80 per cent of Nigeria’s territory, and has recorded a 40 per cent cost reduction in the supply chain.
“We are always expanding. We are now keen on growing to Tanzania and Rwanda in the near future,” she says.
Kobo360’s business model is already winning accolades. The firm was named the “Disrupter of the Year” at the highly acclaimed Africa CEO Forum Awards 2019.
“We anticipate strengthening our links across this region, which will bring us closer to building our Global Logistics Operating System (G-LOS), to ensure fast and low-cost movement of goods for businesses on the continent,” Wamuyu concludes.
