The prospect of more intra-African commerce is boosting transport and logistics investments
Africa's transport and logistics startups are on track to receive more growth funds this year, in agreements that may assist in the development of intra-Africa trade.
Since the outbreak of the Covid-19, there has been a heightened shift to tech-enabled transportation across the continent to overcome movement obstacles, improve efficiency, and increase food chain resilience. The larger increase of e-commerce in Africa during the epidemic has also boosted logistics demand, sparked a rise in last-mile delivery apps for food and other goods.
Baobab Network, a social impact technology accelerator, shows that the transport and logistics sector is staring at soaring startup fund-raising record following iote in which it raised $217 million in 2013.
The business has already raised $200 million in funding in the last eight months alone.
Transport and logistics businesses are still on track for their greatest year yet in terms of value raised. According to Baobab's transport and logistics sector map 2021, transport & logistics businesses in Africa have secured $200.77 million over 37 funding rounds this year.
Of the 37 funding rounds, 62 percent are seed and pre-seed funding round, with value averaging $50,000.
Togo's Gozem and Nigeria'S SEND technologies) were two tech-enabled west African logistics firms that raised over $3 million, whereas Egypt' on-demand warehousing and logistics platform, Flextock raised $3.25 million in a pre-seed funding round as the North African nation saw increased activity in the sector.
MAGNiTT, a startup data platform for emerging venture markets in the Middle East and North Africa, claims it was 'a good year for Egypt, with the nation breaking its quarterly and half-yearly records in venture capital funding. The country's start-up funding in the first half of the year accounted for 91 percent of all funds raised in 2020, with a year-on-year growth of 28 percent.
Egypt was the only one to witness an increase in deal volume YoY, in accordance with a healthy startup space and capital allocation, according to MAGNiTT. Out of the top 3 most-funded geographies in MENA, Egypt was one of three countries to see an increased deal volumes increase, implying obstructing an efficient startup environment and investment allocation, according To MAGiT.
Seven Egyptian-based delivery and logistics firms have raised $42 million in funds since the beginning of the year. According to the Baobab network, the number of Africa's transport and logistic start-ups has risen to 65 percent during or after 2017 with the value range of funding for these firms extending beyond $10 million.
According to the report, We see investments in the 10M+ range have significantly increased this year, accounting for almost 30% of the investments.
This leads to increased investor attraction to this area, possibly by allowing the world's largest market-AfCFTA to be used.
After closing $40 million in a debt financing round in May and $23.2 million if he or she is in August, Nigeria's mobility firm, Moove, made esoteric gains in the August debt repayment round.
It has already been a record year for transport and logistics businesses in Africa, with 4 months left in 2021. Will money flow in as the year approaches? According to Baobab Network, will funding continue to flow into the future?
A July offer by UAE port operator, DP World, to acquire South Africa's listed firm, Imperial Logistics for $890 million, is in preparation for further developments in the more mature transport and logistics sector. DP World and other logistics firms like South Africa's Grindrod are also looking to benefit from private participation in a number of South African harbor operations.
With the permission of bird, a story agency under Africa No Filter, this story was republished.
Sign up to be a participant in the newsletter. The Weekly Brief of Quartz Africa on Quartz African is available here. In your email address, you may receive news and analysis on African business, technology, and innovation.