The cross-border logistics market is expected to reach $32 billion in revenue by 2025, with several players vying for market share in the increasingly competitive industry. Ghana e-Logistics Startup Jetstream Africa is on the list, and today it announced that it has secured $13 million in equity and debt ahead of Series A.
Fintech lender and private equity firm Cauris is the sole provider of debt financing while equity investors include Octerra, Wuri Ventures, Seed9, MBA Fund, French development organization Proparco and ASCVC , a venture fund founded by the executives of supply chain display platform Project44. Existing investors Alitheia IDF and Golden Palm also participate.
This round comes about 18 months after the Tema .-based cross-border logistics platform announced $3 million seed round (including $1 million in debt). Jetstream says this new investment will allow it to expand into new countries — it’s currently in 29 countries (12 in Africa) — and continue to grow its technology platform, the aggregator platform. vertically fragmented logistics and financial providers in the commercial world of Africa.
At the time of the seed round, Jetstream Africa had two lines of business: one providing logistics services to cargo owners involved in import and export, and another providing financial distribution to companies. Freight Forwarders. However, Jetstream has bundled both products over the past few months to serve only owners of goods. According to the CEO of the startup Miishe AddyJetstream has achieved a corresponding market fit product.
“When we run those two lines side by side, we observe that the import-export business controls the supply chain,” she said on the axis. “Although shippers and forwarders have a lot of information asymmetry, importers and exporters can put pressure on forwarders to digitize the supply chain. We have simplified our business into direct import and export products by combining trade finance and logistics.”
Jetstream’s new business model has shifted to a freight forwarding model. The company is now involved in the shipper’s end-to-end transportation of goods (both import and export), charging fees and, most importantly, providing financing to those in need. Usually, the traditional method of most shippers when they want to get a business loan is to go to the bank to apply for a letter of credit. Whether they receive it or not depends on their partner’s bank. To clarify: Suppose a Ghanaian importer is doing a transaction with a Chinese exporter — the bank in Ghana collects cedi and interacts with the exporter’s bank in China, which, After confirming to the shipper, will distribute the yuan.
It is a time consuming process that can take several weeks. And for shippers on both sides of the transaction who want faster access to credit, the letter of credit system is inefficient, leaving them to look for other sources of funding that require some form of collateral for their loan. surname. Essentially, Jetstream provides them with working capital backed by physical shipment. According to Addy, the three-year-old startup has a guaranteed interest in the goods. Instead of processing letters of credit on its own, Jetstream guarantees loans — to be repaid within 15-90 days — through its banking partners and disburses loans to every supplier in the supply chain. .
“If you import 10 containers, in addition to paying for the actual goods, the importer has to pay the shipping line, the customs broker on both sides, the truck driver on both sides, you have to pay the warehouse operator. in some cases, or Container Port. There are a minimum of nine different providers that you have to pay for,” noted Addy, co-founder of Jetstream with COO Solomon Torgbor in 2018.
“And when someone applies for a Jetstream loan, they not only say give me $50,000 but enough money to finance this entire shipment and pay these nine vendors. Also, we don’t give the money to the shippers but directly to the nine sellers.”
Jetstream has grown its trade finance product from $1 million in debt it secured in mid-2021 to about $9 million in total loans disbursed to date. Its plan is to increase that amount fivefold by the end of the year, Addy said. The CEO also mentioned that Jetstream has scaled up from disbursing one loan per month to a maximum of 50 loans per month after transforming its business model, thus becoming a positive EBITDA. Additionally, revenue has grown 48% and active customers have grown 102% over the past year, according to a statement shared by the e-logistics startup, which handles shipments that include 47% of freight. no, 44% sea freight and 9% land transport.
Team of 44, playing against the likes of Sote, TO SEND, Port One35 and MVX among others, has been able to forge a number of partnerships essential to its next phase of growth, including multinational banks like Societe Generale and startups like Lami and MFS Africa. Tokunboh Ishmael, co-founder and principal partner at Alitheia IDF, one of Jetstream’s investors, said this funding round, which supports the startup’s expansion into new markets, will help the company capitalize on Trade policies like the AfCFTA, “facilitate the richer transcontinental trade needed to support inclusive economic development and unleash the full potential of the continent.”