by Amit Jain
There has been a sharp rise in investments in the transport sector since the Africa Continental Free Trade Area (AfCFTA) came into force. According to Baobab Network the transport and logistics sector in Africa has raised almost raised funding worth US$200m in the first eight months of this year (2020) alone. This comes after a record breaking 2020 where the sector raised US$217m. Of the 37 funding rounds this year, 62% are either seed or pre-seed funding rounds, with values averaging US$50,000.
Singapore funded Togolese superapp Gozem and Nigeria’s SEND technologies were two tech-enabled logistic firms that raised over US$3m, while Egypt’s on-demand warehousing and logistics platform, Flextock raised US$3.25m in a pre-seed funding. It has been a good year for Egypt with the country breaking records in venture capital funding. The country’s start-up funding in the first half of the year was equivalent to 91% of all funds raised in 2020. Baobab Network puts the number of Africa’s transport and logistics start-ups at over 430 with 65% founded during or after 2017 with the value range of funding for these startups seen rising beyond US$10m. Nigeria’s mobility startup, Moove, recorded a big raise after closing US$40m in a debt financing round in May and US$23.2m in a Series A funding round in August. Major pending deals include an offer by UAE port operator, DP World to acquire South Africa’s listed firm, Imperial Logistics for US$890m. Meanwhile China’s biggest port operator China Merchants Group consolidated its foothold in Djibouti after it agreed a US$350m financing deal to turn its Port of Djibouti into an international business hub. It signed the the agreement with state-owned company Great Horn Investment Holding in Dec 2020, paving the way for a massive revamp of the historic port. Located in Djibouti City, the US$3bn project is to be modelled on the southern Chinese port city of Shekou. The AfCFTA has put a sharp focus on trade facilitation and investors are keen to be part of the action. Since January, start-ups in Africa have consistently raised more than US$100m a month.