Lori Systems, an African on-demand logistics and trucking company that digitizes transportation and provides shippers with solutions to manage their freight and carriers, raised a pre-Series B round in which Google participated along with other investors existing. Sources say the company raised at a slightly higher valuation than its last valuation of $110 million in 2020.
This undisclosed investment is Google’s third from the $50 million Africa Investment Fund targeting early-stage and growth-stage startups across the continent, which the company’s CEO, Sundar Pichai, announced last October. The fund is part of Google’s investment plan $1 billion in “technology-driven initiatives” over the next five years. The news also comes from the launch of Google’s first product development center on the continent, in Nairobi, Kenya, the city where Lori Systems was first launched.
Last December, Google announced its first investment in Ugandan super app SafeBoda. During the announcement, Nitin Gajria, Managing Director for Sub-Saharan Africa, said the Africa Investment Fund would not be limited to specific verticals or regions. “We focus on investments where we think Google could add value. If the founders are building interesting products by solving real challenges in Africa, that would fall squarely into our investment thesis,” he added.
The following month, the fund took part in the South African games publisher and studio. $20 million Series A extension of Carry1st round led by a16z. With its most recent investment in Lori Systems, a Google spokesperson — asked about the fund’s investment strategy given that its investments come from three different sectors — told TechCrunch that the Africa Investment Fund has a eye for startups that it had a strategic overlap in key verticals including fintech, logistics, e-commerce and local language content.
In Africa, more than $180 billion is spent annually on transportation, and logistics accounts for more than 70% of a product’s price, according to reports. For comparison, it’s 6% in the United States. The influence of logistics operations on products leads to various problems for operators, ranging from price inconsistency, which stems from a fragmented supply and demand market, to paper documentation and limited access or non-existent in funding.
Companies like Lori are solving these problems and reducing costs through their on-demand logistics and trucking marketplaces, which connect shippers to transportation, help them move goods, extend working capital, and provide them with software to manage their operations. Lori, in a statement, said it has helped thousands of shippers and carriers move more than $10 billion worth of goods across the continent since its launch in 2016.
TechCrunch Startup Battlefield Africa winner in 2017 is currently present in Kenya, Uganda and Nigeria. In 2019, we reported the company’s Series A round, which multiple publications quoted at $20-30 million, led by Imperial Logistics (recently acquired by Dubai Ports World). Lori raised a total of $38.2 million, according to Crunchbase. Some of its competitors include Kobo360, Sendy, and Sote.
Given that its last fundraising was almost three years ago, I asked CEO Uche Ogboi why it took so long for Lori, one of the most funded logistics companies on the continent, to secure funding. later and why it had opted for an extension instead of a new round. She said Lori has been focused on growth, sustainability and a path to profitability since her last round of funding. According to the chief executive, the company has significantly expanded its product line and now offers a “fully digitized transport management platform”, built in response to the pandemic, which has disrupted trade flows for shippers and carriers. Its new products tripled transaction volume, while its market take rate nearly doubled, she said.
“At this point in our journey, and in this current market, we have made the strategic decision to expand our Series A rather than increasing a Series B on unfavorable terms,” Ogboi responded in an email response regarding the the company’s fundraising efforts and the current venture capital landscape. “We are excited about this opportunity to partner with Google and expect to reevaluate our investment options in the first half of the year. next year. Lori wants to use the new funds to develop new product lines and achieve profitability, added Jean-Claude Homawoo, co-founder and chief product officer.
It was unclear how much Google’s African Investment Fund invested in this round, just like investments in Safeboda and Carry1st. Still, it’s worth noting that the fund – which, according to its spokesperson, does not intend to direct investments, but “to partner with leading investors with regional presence and local knowledge – mainly participated in extension agreements via convertible notes.
“At Google, we understand the transformative power that digitization can bring to the African continent. There is so much potential in the region, but only through innovation can this be fully unlocked,” Gajria commented on Google’s participation. “lori Systems is a great example of how technology can be scalable across Africa, and how, in turn, this can lead to significant economic development. »