Lori Systems, a Kenya-based logistics startup is formally announcing its expansion into Nigeria, Chief Operating Officer Uche Ogboi, told TechCabal.

Ogboi spoke to TechCabal on the sidelines of the TCMobility Townhall last Friday. Ogboi, who was on the panel of discussants about Nigeria’s haulage industry, was appointed to her role in late July and has spearheaded the company’s efforts in Nigeria.

Founded in 2016, Lori Systems is solving inefficiencies in Africa’s cargo transportation industry. It was established by Josh Sandler and Ernest Gichini Ngaruiya to reduce the cost of moving goods across the continent. Individuals and businesses operating in Africa spend $180 billion on goods transport annually. But according to Lori, this high cost inflates the cost of products with as much as 75% of the price of a product being attributed to logistics, compared to 6% in the US.

Lori wants to fix this and has developed an online platform for truck drivers, allowing transporters to find available drivers to move their cargo.

“The key thing for us is to drive down the cost of goods across Africa,” Ogboi said.

Its platform allows users to who place haulage orders including specifications about their preferred trucks and cargo types. Once the order is made it is pushed to Lori’s driver network. The platform relies on different algorithms and matches the user’s orders to the best fit transporters.

Lori wants to drive down the gridlocks and the choke points whereby a truck is idle and waiting for goods to avoid getting on the road empty.

“If that truck is on our platform they would not have a moment where they won’t have goods to carry,” Ogboi assured.

The company started out in Kenya with a product launch in May 2017, but it has since expanded. It now operates in 9 African countries including Uganda, Rwanda and South Africa and has a network of over 2,500 drivers across these countries.

With East Africa as its hub, Lori’s expansion into Nigeria and Ghana is its first move into West Africa. And although the startup is only just announcing its entry into Nigeria, it has actually been operating in the country at a limited scale since January.

“We started [in Nigeria] in January, but we started piloting with a few customers.

“And in the last month or so we have been looking to really grow aggressively here and expand.”

Lori says its Nigerian client base includes companies like Flour Mills of Nigeria, Olam Group and Dangote; these are three of the biggest companies in the agriculture and fast-moving consumer goods (FMCG) sectors in the country.

But the startup does not expect Nigeria to be an easy market as Ogboi admits that the country’s infrastructural problems may be a challenge.

“There are issues that we as private sector individuals and startups can do, and there some things that we will struggle with,” she said. 

“Infrastructure is a big one. A broken infrastructure makes it difficult for us to operate as efficiently as we would like.”

“But these are the things we’re trying to innovate around,” she added.

Lori already has some competition in Nigeria. Kobo360, a Nigerian digital logistics platform backed by the International Finance Corporation, recently secured a $30 million Series A funding from US investment bank, Goldman Sachs, TLCom Capital, YCombinator and some Nigerian banks.

Another competitor is TradeDeport, a startup backed by the Partech Africa Fund. TradeDeport is focused on the FMCG sector and helps to connect distributors to retailers in the informal sector. When it secured $3 million in April 2018, the startup had the biggest financing among logistics startups in Nigeria and already claims some of the biggest FMCG companies as clients including Unilever, Kellogs, and PZ Cussons.

All three companies will compete for market dominance in Nigeria’s logistics sector.

Meanwhile, Lori’s Nigeria expansion comes just a few months after it closed a new funding round. In June, the startup raised $8.7 million from undisclosed investors according to a US SEC filing. This came after a $6.2 million funding round it disclosed in another SEC filing in January 2018.

There is speculation that Lori is due to announce another round of funding, rumoured to be “significant” according to some sources.

Abubakar Idris Author

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