Topship has raised a $2.5 million seed round from institutional and individual investors.
The round was led by Flexport with participation from Y Combinator; Olive Tree Capital; Mercury CEO, Immad Akhund; Dropbox co-Founder, Arash Ferdowsi, and others.
With the funding, the digital freight forwarding startup seeks to create the easiest means for African businesses to export and import parcels and cargo to their customers, suppliers, and distributors worldwide.
Africa lags behind the rest of the world in international shipping. This has been due to a lack of widespread broadband access, logistics, customs, hidden charges, and other challenges confronting businesses trying to sell online.
However, since the COVID-19 pandemic in 2020, when there was a surge in global e-commerce traffic, African digital freight forwarders are using technology to handle these issues.
Topship, one of Y Combinator’s 2022 Winter batch, was founded in 2020 by co-founders Moses Enenwali and Babatunde Junaid when they noticed the increase in demand for shipping parcels, cargo and digital freights.
Leveraging on his experience and network with merchants while working with logistics company ACE Logistics and e-commerce fulfillment provider Sendbox, CEO Enenwali said Topship wants to create the easiest way for African businesses to export and import parcels and cargo to their customers, suppliers, and distributors worldwide.
The startup uses belly-hold cargo to ship merchandise. Air cargo shipping is more straightforward to start compared to ocean cargo and according to Enenwali, it made more sense because passenger planes flew half empty for most of 2020.
Topship serves a wide range of users. From a merchant moving tons of heavy equipment, to a student mailing documents to a school abroad or a Gen Z shopping from a foreign store, the startup is a borderline local and international shipping solution between digital freight and e-commerce fulfillment.
Currently, Topship allows 1,500 merchants to move cargo and parcels from Nigeria to over 150 countries. Although it can help Nigerian merchants receive parcel deliveries from the other way round, they can only accept cargo deliveries from the U.S., the U.K, and China.
The new funding provides Topship with deep enough pockets to expand and start operations in other African countries. In 2021, merchant groups from Ghana, Tanzania, and Kenya invited Topship to consider the possibility of launching in their respective markets.
In addition, a portion of the investment would improve its asset-light technology and build out a proprietary global shipping infrastructure to make imports and exports significantly faster and easier.
The funding was led by Flexport and backed by Y Combinator- Soma Capital, Starling Ventures, Olive Tree Capital, Capital X, and True Capital. The individual investors in the round include Immad Akhund, Mercury CEO, and Arash Ferdowsi, co-founder of Dropbox.
Flexport has backed several African companies such as Trella, Flextock, ShipBlu, Sendbox, and Freeterium.