The market for cross-border logistics services is expected to reach $32 billion in revenue by 2025. Several companies are vying for market share in a growing and highly competitive industry. His e-logistics startup Jetstream Africa in Ghana is on the list and today announced that he has secured $13 million in equity and debt in a pre-series A funding round.
Fintech lender and private equity firm Cauris is the sole provider of debt financing, and equity investors include Octerra, Wuri Ventures, Seed9, The MBA Fund, French development agency Proparco, and executives from supply chain visualization platform Includes ASCVC, a venture fund founded by Project44. Existing investors Alitheia IDF and Golden Palm also participated.
The round comes about 18 months after the Tema-based cross-border logistics platform announced a $3 million seed round (including $1 million in debt). The new investment will allow Jetstream to now expand to 29 countries (12 in Africa) and continue developing its technology platform to vertically aggregate the fragmented logistics and financial vendors in the African trading world. said.
At the time of the seed round, Jetstream Africa had two lines of business. One provided cargo owners with logistics services to handle imports and exports, and the other distributed loans to freight forwarders. However, Jetstream has bundled both products over the past few months to serve freight owners only. According to Miishe Addy, the startup’s chief executive officer, Jetstream has accordingly achieved a product that fits his market.
“Running these two lines side by side, we found that the import or export business controls the supply chain,” she said in Pivot. “Freight owners and freight forwarders have a lot of information. Importers and exporters can put pressure on freight forwarders to digitize their supply chains, despite the asymmetry of trade finance and logistics to simplify business into direct import and export product lines. Did.”
Jetstream’s new business model has shifted to that of a carrier. The company is now involved in the end-to-end movement of shippers’ cargo (both import and export), charging fees and most importantly providing financing to those who need it. . Usually, when most cargo owners want to take out a loan to run their business, the traditional way is to go to the bank and secure a letter of credit. Whether or not they receive it depends on the counterparty’s bank. Description: Let’s say a Ghanaian importer does business with a Chinese exporter. Banks in Ghana will collect the Cedi and exchange it with the Chinese exporter’s bank.
This is a time-consuming process that can take weeks. Also, for cargo owners on both sides of a transaction who wish to access credit more quickly, the letter of credit system is not efficient and they must find other sources of capital that require some form of collateral for financing. I have. Jetstream basically provides them with working capital backed by actual shipments. Addy says the three-year-old startup has secured a cargo security interest. Jetstream does not process the letter of credit itself, but through its banking partners he underwrites loans that are repaid within 15 to 90 days, and pays the proceeds of the loans to all the vendors in his supply chain.
“When importing 10 containers, in addition to paying for the actual goods, the importer has to pay the shipping lines, customs brokers on both sides, truck drivers on both sides, and possibly warehouse operators at the container terminal. We have to pay at least nine different vendors,” said Addy, who co-founded Jetstream with the COO. Solomon Turgubor 2018.
“When someone applies for a Jetstream loan, they’re not just asking me to give them $50,000, they’re telling me to give me enough money to fund this entire shipment and pay these nine vendors. We also give the money directly to the nine vendors instead of the cargo owners.”
R: Miishe Addy (CEO, Jetstream Africa)
Jetstream has expanded from $1 million in debt secured in mid-2021 to approximately $9 million in total disbursed loans to date. Its forecast is to increase that volume fivefold by the end of this year, Addy said. It has scaled from payments to up to 50 monthly loan payments, which it said has resulted in positive EBITDA. According to a statement shared by the e-logistics startup, revenue has grown 48% and active customers have grown 102% in the past year. .
The 44-person team, which competes with the likes of Sote, SEND, One35 Port and MVX, has several key partnerships for its next phase of growth, including multinational banks such as Societe Generale and start-ups such as Lami and MFS. I was able to tie it. Africa. Tokunboh Ishmael, co-founder and principal partner of Alitheia IDF, one of his Jetstream investors, said the funding round, which will support the startup’s expansion into new markets, will be funded by AfCFTA-like funding. It said it would use trade policies to “enable richer intercontinental trade.” This is necessary to support inclusive economic development and maximize the continent’s potential. “
