As part of its $50 million Africa Investment Fund targeted at Africa's early-and growth-stage startups, Google has joined existing investors to invest in Lori Systems' pre-Series B round.
Over $180 billion is spent annually on haulage, and logistics account for more than 70% of a product’s price in Africa. In 2019, the on-demand logistics and trucking company digitising haulage and providing shippers with solutions to manage their cargo and transporters raised a Series A round led by Chinese investors Hillhouse Capital and Crystal Stream Capital, with participation from investors including Nigeria and U.S.-based EchoVC, Flexport CEO Ryan Petersen and Nigerian founder Iyinoluwa Aboyeji.
TechCrunch reports that the pre-Series B round was raised at a slightly higher valuation than its last $110 million valuation in 2020. Founded in 2017 by Josh Sandler, Jean-Claude Homawoo, and Ernest Gichini Ngaruiy, Lori Systems operates largely in East Africa, with its base in Kenya, and has since expanded to Nigeria and South Africa.
Lori Systems recently partnered with Moove to bridge the financing gap for Africa’s trucking and logistics industry. Lori Systems has built a network of thousands of vetted transporters to move cargo across 12+ countries. "Lori's mission is to drive down the cost of goods in frontier markets. We've grown a marketplace that brings transparency and data to the forefront of the continent's critical haulage industry," Uche Ogboi, CEO of Lori Systems said.
According to Jean-Claude Homawoo, Lori Systems' co-founder and CPO, the global logistics industry has seen much innovation. "However global supply chains are in dire need of modernization, with technologies yet to reach critical scale. On the continent, the African Continental Free Trade Area (AfCFTA) is expected to lead to an 81% increase in intra-African trade, providing a $21.9 Billion opportunity in untapped trade potential that the 54 ratifying countries are hoping to capitalize on over the next 5 years. Logistics is key to unlocking this opportunity," Jean-Claude said.
Google's $50 million investment plan in Africa
In 2021, Google announced its plan to invest up to $50 million in African early- and growth-stage startups via its Africa Investment Fund, ramping up efforts to support more businesses on the continent—including the Google Equiano subsea cable with has since landed in Togo, Nigeria and South Africa, as well as the $3 million fund for Black founders in Africa.
In a statement, Nitin Gajria, Google’s Managing Director for Sub-Saharan Africa. stated that "Google understands the transformative power digitisation can bring to the African continent. There is so much potential in the region, but it's only through innovation that this can be fully unlocked. Lori Systems is a great example of how technology can be scalable across Africa, and how, in turn, this can drive meaningful economic development. We’re excited to see where the future takes a business like this."
The Google fund has invested in Ugandan super app SafeBoda and South African games publisher and studio Carry1st’s $20 million Series A extension round led by a16z—Lori Systems is its third investment.