Nigeria’s OnePort 365 lands $5M to digitize freight management in Africa – TechCrunch
The global maritime industry oversees the movement and handling of over 800 million containers in various ports worldwide. Africa controls about 12% of this volume, with its clearing and forwarding market standing at almost $4 billion.
That said, Africa’s freight space is stuck with numerous challenges. Some include congestion at ports, opaque processes of service providers, fragmented payments, and low visibility and documentation.
These were the four main challenges Hio Sola-Usidame fronted while running Logigrains, a company he founded in 2016 involved in logistics and commodities trading. OnePort 365 was the business he launched three years later to tackle these issues in Africa’s freight management space. And in a new development, the three-year-old startup confirmed to TechCrunch that it has raised $5 million in seed funding.
Founder and CEO Sola-Usidame explained to TechCrunch that in his experience working in the freight forwarding space, generating a quote for a shipment takes about 10 to 14 days. According to the founder, most of the processes involved in the supply chain are manual, which is why it takes time for quotes to be generated.
“Typically, these guys have to deal with as much as 10 different middlemen. The way it works is this, there are probably about six different channels involved–you have a trucking phase, you have a customs brokerage, you have a terminal, you have a shipment, you have a warehouse, and then you have marine insurance,” he said. “As of today, I can tell you 80% of transactions are very much offline.”
Say this hurdle gets passed, the next one to cross becomes visibility, where Sola-Usidame argues that out of every 10 trucks that leave the ports in Nigeria, three go missing in transit; the reason being that just above 20% of them have a tracking system.
“What you’re seeing is a situation whereby cargo worth $100,000 is being hauled by a truck driver earning $400, and as a result, there’s a lot of theft that goes on because there’s no visibility,” he said, giving more description. “If you can track your UPS parcel worth less than $100, why can’t the guy loading $100,000 worth of cargo in a container track where this container is in Africa?”
When it comes to payments, shippers use different payment methods across singular channels. Also, documentation in Africa is pretty much pen and paper, while the rest of the shipping and freight industry globally has moved to the electronic bill of ladings.
OnePort 365 says its platform solves these problems by providing end-to-end digitization of freight management for stakeholders in this space. It is building an operating system for cross-border trade in Africa, helping traders to manage their freight forwarding processes and enabling other value-added services, the company said in a statement.
The CEO claims that his startup, present in Nigeria and Ghana, cuts booking time from 10 to 14 days to “minutes.” Traders can also connect with shipping and inland transportation vendors and manage the entire process (from booking to payments), including real-time visibility of their shipments. And in terms of payments, OnePort 365 claims to aggregate different methods enabled by the Pan-African Payment and Settlement System (PAPSS) so traders have access to instant payouts.
OnePort 365 bootstrapped throughout its first year. While the CEO didn’t share numbers on bookings and users, he disclosed that his company has increased the number of twenty-foot equivalent unit containers (TEUs) by 140% and grown its revenue by more than 420% last year. Its business customers also grew from 5 to 50.
The seed round was led by Mobility 54, the VC arm of Toyota Tsusho and CFAO Group. Participating investors include SBI Investment, Flexport, ODX, a Singaporean syndicate fund, and other angel investors. Samurai Incubate also followed on after participating in OnePort 365’s previous round.
OnePort 365’s says its platform covers air freight, ocean freight, inland haulage (trucking, barge, and rail), pay-as-you-go warehousing, marine insurance, and customs brokerage. The new funding will look into how the company can improve its efficiency and lower cross-border trading overhead across the continent.
More money also includes trying to edge out the competition as the market for cross-border logistics services is said to hit revenues of $32 billion by 2025. Multiple companies are needed for the market to reach its full potential, and there are a few known ones: Ghana’s Jetstream and Nigeria’s SEND and MVX.
Sola-Usidame argues that his team, made up of Maersk and DHL alumni, has first-hand experience running traditional freight forwarding businesses, giving the team some sharpness over others.
“For us, we had experience running this in the traditional space before OnePort365, and it’s a massive edge that gives us a lot of experience and having a good understanding of the space, and that’s what’s led us to significant growth in that period, he said.
The company plans to use the funding to add more people and expand to “three major hubs” across the continent before Q4 2022. Other deployments of capital will go into ramping up its tech and providing trade finance to the shippers.
“There is great potential to unlock significant commercial opportunities across the continent by addressing the longstanding challenges that have made it difficult to move freights into and around the continent, and we are confident that OnePort 365 has what it takes to succeed,” said Takeshi Watanabe, CEO of Mobility 54 Investment SAS said in a statement.