Lori Systems, a Nairobi-based logistics company, raised $6,170,000 in funding this year. That is according to their Securities and Exchange Commission filing in January. This is the most significant external funding the company has raised. After the $25,000 received from winning the TechCrunch Battlefield Africa last year.
Though it is not clear who the investor is, they are likely to be from the US. Given that US investors prefer their investees to incorporate in the country. And, from the SEC Form, Lori Systems incorporated as a corporation in Delaware in 2016.
There is a growing list of startups and companies in Africa that are incorporating in the USA. This includes; Flutterwave, M-Kopa, PayGo Energy, Paystack, Lidya, Halan, mPharma and more. Most of them are being incorporated in Delaware.
Joshua Sandler - the sole signatory on the form and CEO - founded the company together with Ernest Gichini Ngaruiya. Ernest, a Kenyan who resides in the US, also co-founded E la Carte, which went on to raise at least $35 million in VC funding.
Over the past year, Lori Systems has undergone a significant expansion. Expanding from serving only Kenya to Uganda, Rwanda, South Sudan. It also states Nigeria among the countries where it is present. Though there haven't been any significant announcements of their operations there.
"The company has experienced 30% month-over-month compounded growth since product launch in May 2017," says Lori Systems.
Three months ago, the startup said that it counted 70 employees on staff — up from about 15 almost a year ago. They also counted a network of 2,500 trucks using its service. The startup also partnered Kenya’s Standard Gauge Railway. The goal was to help reduce the costs involved by truckers in moving bulk imports and exports.
Lori Systems operates a marketplace - Uber-like - logistics model. According to the company, they are "tackling a massive issue". Across Africa, $180 billion is spent annually on haulage. This means that up to 75% of a product’s cost is due to logistics.
Aside from Lori Systems, there are other startups in Africa that are tackling the problem.
Y Combinator Kobo360 is among them. A month ago, we reported that the IFC was considering investing at least $3 million into them. They announced the investment - $6 million - alongside TLcom Capital Partners a week ago.
The recent $6 million in funding brought Kobo360's total raised this year to $7.2 million. This leaves the logistics battle - across Africa - largely between Lori and Kobo360.