The Kobo360 story is one of a promising African startup really crushing it at the moment. Kobo 360 is a startup using technology to disrupt and improve the logistics sector in Africa.
According to the 2018 Logistics and Supply Chain Industry report, the value of the logistics sub-sector of the economy currently stands at N250 billion. In Africa as a whole, the numbers are even more interesting, this is why kobo360 has taken a pan-African approach to solve the issue.
The core value proposition of the startup is the digital technology platform, this significantly reduces the cost of expanding its reach as the software is almost infinitely scalable.
After an impressive $6M seed round, Kobo 360 has raised a Series A round of $20M led by Goldman Sachs including the International finance corporation, Asia Africa investment, and Consulting, TLcom Capital Y Combinator, etc. The startup also raised an additional $10M locally from Nigerian Commercial Banks. This inflow of capital is both validations for the cause of the startup and also the needed fuel to drive this startup to success.
Kobo 360 was founded in 2017 by Obi Ozor, a Wharton School of Business Alumni and co-founder Ife Oyedele.
By 2019, the startup was already beating the likes of Jumia, an e-commerce platform to win the African disruptor of the year at the 2019 African CEO forum. In 2020
Kobo360 story: The Mission
Kobo 360 is a digital logistics platform that looks to increase the efficiency of the supply chain for long haul freight operations, and connecting cargo owners, truck owners, truck drivers, and cargo recipients
There are many loose ends in any logistics platform where things can possibly go wrong. Kobo 360 is using technology to tie this up really nicely and improve its operations.
It introduced the KOBOsafe, Kobocare, Kopay, etc to ensure drivers are taken care of adequately and boast of up to 40% increase in drive remuneration compared to the former operations of the logistics sector
Kobo360 story: The Rise
Kobo 360 started like every other startup so much uncertainty and the required amount of determination to succeed
In the early days, there was the question of credibility for the startup, this required the startup undertaking the most daunting of tasks and handling logistics to the most obscene routes to prove itself to the big clients that could give them the considerable volume of cargo to deliver. This would serve as the first form of validation for the business model and give them the required credibility for them to walk tall to other meetings and close the deals easily.
In 2017, the management of Honeywell, a subsidiary of Flour Mills of Nigeria plc, was approached for business. The founders invited them to find ways to test them. Honeywell asked Kobo to find six trucks for the Lagos–Maiduguri route, The route was into the heart of an area plagued by the terrorist organization Boko Haram, where truck drivers often lost entire loads to the militant group. Kobo360 delivered four trucks within 48 hours and Honeywell gave them another route. This time to Bayelsa state, in the south.
That’s where you could find some activity from the Niger Delta militants who would extort money from the truck drivers, remembers Ozor. To convince truck owners to drive the route, Kobo360 frequently had to pay them upfront, borrowing working capital from relatives and friends.
They did 62 trips in three weeks and were awarded a four-year contract from Honeywell.
Kobo360 story: Gaining traction
Startups are always about solving problems, eliminating inefficiencies, and finding new innovative ways to go about their business. Congestion at the port was one major problem at the Lagos port that truck owners were surely tired of and would pay anything to avoid. Kobo started bringing the truck to the port on barges, this solved this problem in no time and further endeared them to the heart of the truck drivers and owners.
About 82% of the truck owners and drivers are from the North, this led Obi Ozor to move his entire family to Kano in order to be closer to these people understand the way they do business and build lasting relationships with them. This has paid off and seen tremendous results.
Related: Starting a Business in Nigeria
Kobo 360 story: Challenges
One factor that tends t increase the cost of logistics is the reality that these trucks would not be engaged in returning from most of these trips far into the hinterland. They solved this problem by connecting with farmers and SMEs in several areas. This helped them to engage the trucks on return trips and invariably reduce the cost of individual trips. 27% of the startups customers are the SMEs and farmers that come from this method of doing things
Most truck owners required their payment as soon as possible, this led Kobo360 to launch KOpay, a fintech offering that allowed the startup to pay truck owners immediately while charging them commission based on their credit rating. Kopay is projected to become their second largest source of revenue in the near future.
The founder envisions that the startup will become a $2 billion company in the $150 billion African logistics market in the near future.