Connecting Africa: how tech is breaking down barriers to trade
Africa has more trade zones and the greatest average distance between major cities than any other continent. Logistical challenges are often cited by businesses as a major impediment to building scaled-up and profitable operations in Africa. Breaking down these barriers must be a policy priority and the African Continental Free Trade Agreement offers cause for optimism. Pioneering companies, however, have been taking matters into their own hands. Kobo360 is one such company. We spoke to Kobo’s Co-Founder, Ife Oyedele II about how the company uses technology to break down the logistical barriers to moving goods in Africa.
With the ratification of the AfCFTA there has been momentum building recently for intra-African trade to provide Africa’s next boom. But, many businesses continue to find the logistics very challenging. How does Kobo360 use technology to break down these barriers?
Kobo360 is using technology to connect cargo owners, truck owners, drivers and cargo recipients. By doing so, we bring efficiency and cost reduction to the supply chain framework. We transport large-sized goods and remove the stress of having to deal with seeking contractors to move heavy goods from one location to another, whether its within the same country, or across Africa. With the Kobo app, customers can also track the location of their goods, they can follow it step by step from pick up to delivery, so they are guaranteed safety for their goods.
‘Time, cost and quality are key drivers of success in logistics.’
Time, cost and quality are key drivers of success in logistics which is why we are building a global logistics operating system that will ensure fast movement of goods at a lower cost for businesses across Africa.
You’ve clearly had a marked effect on the logistics industry in Africa and Kobo 360 was named disrupter of the year at the Africa CEO Forum in March. How do tech-driven companies like yourself disrupt markets?
I would say that tech-driven companies disrupt markets by creating immense value and filling a huge gap in the market. We have spent the last two years fully focused on executing, at scale, on the enormous challenge of moving goods around Africa - starting with Nigeria, but quickly expanding to Togo, Ghana, Kenya and other key markets.
You’ve clearly got big ambitions for Kobo360 as shown by your recently opened office in Togo and as well as your expansion into Ghana and Kenya. Why have you chosen these markets and how do you plan to continue to scale up your operations?
Each African country we’ve chosen to expand into in 2019 has its unique value proposition. The expansion into Togo was a no-brainer as Lomé is home to West Africa’s largest shipping port whilst Ghana’s Port of Tema is the third-busiest in West Africa, after Nigeria’s port in Apapa. For East Africa, we chose Kenya as it is the most innovative market in technology. Winning Kenya will enable to connect the East African region.
‘The expansion into Togo was a no-brainer.’
By expanding our operations across Africa, we are in a better position to build a Global Logistics System that will help us to serve our customers across a seamlessly lined Pan-African market. By this, we create value to our customers as we are in all the key countries on the continent.
Tech-driven startups are often pointed to as evidence that African markets can leapfrog other developing economies. What needs to happen to ensure that technological innovation fulfils its promise of allowing African markets to unlock their full potential?
We need affordable internet, as well as sustainable e-commerce laws which ensure trust and security for traders and buyers alike. The people need to be confident in the system in order for it to progress.
For Kobo360’s success to be replicated, the right projects need to receive the right funding. What should investors look for when investing in tech startups and where should tech startups look for funding?
There are quite a number of things that investors would look for when investing in tech startups, but the product/service the tech startup is offering is very key. Tech products and services are built to eradicate problems, therefore a startup should be able to size the market opportunity for business growth. Being able to efficiently connect truck drivers with goods, track delivery and ensure product security without middlemen interference and, at a reasonable cost proved to be a challenge - and this is why Kobo360 exists. Using technology, we are able to address SME pain points and create more job opportunities for haulage drivers.
‘Tech products and services are built to eradicate problems.’
Tech startups looking for funding should apply to accelerator programs. We were accepted into Y Combinator's 2018 class and this helped in securing $1.2m pre-seed funding led by Western Technology Investment. Last December, we closed on a $6m seed funding round led by the IFC, so being a part of an accelerator has played a role in attracting investors.