Lori's discounted ride

Challenges with working capital have been the constant denominator for logistics startups across Africa. Nairobi-based startup Lori claims it may have found the silver bullet to solving these challenges.

Launched in 2016 by Jean Claude Homawoo and Josh Sandler, Lori set out to reduce the cost of moving goods across the continent by connecting shippers with transport providers through its aggregator platform. Lori provides the working capital to help transporters deliver goods to its customers’ vendors.

The startup’s typical customers—manufacturers, distributors, and high-volume shippers—are characterised by long payment cycles. Their vendors typically have to wait 30 to 90 days for manufacturers and distributors to settle invoices. On the other hand, the transporters must be paid almost immediately, part before the trip and the rest upon fulfillment.

However, a common challenge with this model is that Lori’s customers—manufacturers and distributors—often do not pay back debt on time, creating working capital challenges for the startup.

Lori’s nine years of hard-won experience in Africa’s logistics industry has informed a tweak in its business model to solve this challenge. Under its new setup, the logistics startup draws on an invoice facility at the bank, prices the interest at its rate, and uses the funds to kick off the trip and pay the driver. The bank charges an 8% fee for financing the process.

The startup, which has its eyes on profitability this year, also raised a $2 million bridge round in 2024 However, that round came with a steep valuation cut. The logistics platform once valued at $120 million saw its valuation slashed to about $5 million in the latest round.

TechCabal caught up with Lori’s CEO; he shared how the logistics startup has doubled its take rates, kept receivables low, and improved margins and EBIT among other thoughts about Africa’s logistics space.

Read the full interview here

Niger State, the Nigerian state with the fifth-largest fibre infrastructure (3,681.66km), has officially waived right-of-way (RoW) fees for fibre optic infrastructure.

The state, located in north-central Nigeria, became the twelfth Nigerian state to implement the policy designed to incentivise telecom operators and expand internet access.

Why does this matter? RoW fees—levied by state governments for laying fibre optic cables—have long been a bottleneck to broadband expansion across Nigeria, creating high entry costs for telecom operators like MTN Nigeria, Airtel Africa, and Globacom. The new RoW waiver is part of a broader effort to attract private-sector investment, extend internet access to remote communities, and digitise public services.

Telecom operators will pay a one-time, non-refundable application fee of ₦500,000 ($311.80).

Across Nigeria, several states waived right-of-way fees. However, many of these states have failed to attract the intended infrastructure investments that accompany these waivers.

TechCabal’s Frank Eleanya argues that these states need accompanying investor-friendly policies, functional bureaucracies, and urban population density to attract more attention from telecom operators, regardless of RoW charges.

Still, telecom regulators continue to push for more states across the country to implement waived RoW. Nigeria hopes the waiver will encourage more operators to invest in fibre infrastructure and help close the connectivity gap in some of the country’s underserved regions.

Globally, angel investors often have a hard time investing in startups. But, by only investing in sectors where angels have experience and helping the startup hit its revenue milestones, angels are more likely to get returns on their investment, according to Fisayo Durojaye, an angel investor in Shuttlers, Home Depot and Oneport 365.

Why should you listen to Durojaye? Well, he has exited from Oneport, worked as a VC for 4 years at Echo VC, and was investment director at Lagos-based WAEV Capital, while also running a VC course that has spun investors at Lofty Inc., Seven VC and Kuramo Capital.

Before all this, he was an investment banker , a career he left behind because he did not find it fulfilling. He found that fulfilment in VC after Lifebank, a portfolio startup at Echo VC, provided the blood his wife needed for the birth of their child.

Perhaps the most important thing from Durojaye’s conversation with TechCabal’s Muktar Oladunmade was the need for local context in startup investing. That local context helped Durojaye invest in Shuttlers and dodge an investment opportunity in a startup that relied too heavily on partnerships with governments for subscription-based emergency services. When investing outside Nigeria, he defers to local VCs who understand that terrain.

Durojaye is also adamant that the next generation of funds must perform, or they won’t raise again, implying this fund cycle is a make-or-break cycle. If you ask him, liquidity is the holy grail for investing, and without exits or secondaries, capital won’t recycle. He also believes the ecosystem must include non-VC capital for businesses that don’t scale like tech—SMEs, manufacturing, healthcare, etc.

Not one to pass up on an opportunity to share his deep scepticism of startups with high burn and no path to profit, he critiqued African startups that claim tech efficiency but burn like traditional businesses. He also insists on revenue-based modelling, EBITDA, and price discipline, not GMV or valuation inflation as an investor.

You can read this week’s episode of Ask an Investor here.