KOBO360 raises $30mn funding: What challenges are Nigeria facing?

Nigerian logistics company Kobo360 has recently made headlines by securing a significant $30 million funding, comprised of a $20 million Series A round led by Goldman Sachs and an additional $10 million in working capital financing from Nigerian commercial banks. The company's co-founder, Obi Ozor, along with Winston Osuchuku, co-founder of Trans-Saharan Copper, joined CNBC Africa to discuss the latest milestone and shed light on the challenges of running a logistics company in Nigeria. Kobo360, often likened to the 'Uber of logistics,' operates as a digital platform connecting large enterprises in need of cargo transportation with a network of over 10,000 drivers across Nigeria and several other African countries. Beyond Nigeria, the company has expanded its services to Ghana, Kenya, and Togo. The infusion of fresh capital is set to fuel Kobo360's ambitious growth plans, with a key focus on enhancing technology adoption in Nigeria and West Africa. One of the primary goals is to increase driver onboarding and training to bolster the service offered to global multinationals. Additionally, the funding will support the company's expansion into 10 new countries by the end of 2020. As Kobo360 navigates the logistics landscape in Nigeria, key challenges such as regulatory compliance, governance standards, and resource scarcity come to the forefront. The co-founders emphasized the importance of governance and credibility in attracting investors to support the business's vision. They highlighted the critical role played by Goldman Sachs in providing both equity and debt financing, essential for addressing the working capital needs of an asset-intensive business like Kobo360. Beyond financial backing, investors like Goldman Sachs bring valuable resources and expertise that can propel a company's growth trajectory. The co-founders acknowledged the rigorous due diligence process undergone, including audits and customer interactions, underscoring the significance of demonstrating operational excellence and transparency. In a region where governance practices may vary, aligning with global standards becomes imperative for startups seeking to attract international investment. The funding secured by Kobo360 marks a significant milestone in the company's journey and signals a vote of confidence from investors in Africa's growth potential. As Kobo360 leverages the fresh capital infusion to drive technology adoption, expand its driver network, and accelerate regional expansion, the company is poised to solidify its position as a key player in the African logistics sector.