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December 15, 2018
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Nigerian logistics startup Kobo360 raises $6M, expands in Africa

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Nigerian trucking logistics startup Kobo360 has raised $6 million to upgrade its platform and expand operations to Ghana, Togo, and Cote D’Ivoire.

The company — with an Uber -like app that connects truckers and companies with freight needs — gained the equity financing in an IFC led investment. The funding saw participation from others, including TLcom Capital and Y Combinator.

With the investment Kobo360 aims to become more than a trucking transit app.

“We started off as an app, but our goal is to build a global logistics operating system. We’re no longer an app, we’re a platform,” founder Obi Ozor told TechCrunch.

In addition to connecting truckers, producers and distributors, the company is building that platform to offer supply chain management tools for enterprise customers.

“Large enterprises are asking us for very specific features related to movement, tracking, and sales of their goods. We either integrate other services, like SAP, into Kobo or we build those solutions into our platform directly,” said Ozor.

Kobo360 will start by developing its API and opening it up to large enterprise customers.

“We want clients to be able to use our Kobo dashboard for everything; moving goods, tracking, sales, and accounting…and tackling their challenges,” said Ozor.

Kobo360 will also build more physical presence throughout Nigeria to service its business. “We’ll open 100 hubs before the end of 2019…to be able to help operations collect proof of delivery, to monitor trucks on the roads, and have closer access to truck owners for vehicle inspection and training,” said Ozor.

Kobo360 will add more warehousing capabilities, “to support our reverse logistics business”—one of the ways the company brings prices down by matching trucks with return freight after they drop their loads, rather than returning empty, according to Ozor.

Kobo360 will also use its $6 million investment to expand programs and services for its drivers, something Ozor sees as a strategic priority.

“The day you neglect your drivers you are not going to have a company, only issues. If Uber were more driver focused it would be a trillion dollar company today,” he said.

The startup offers drivers training and group programs on insurance, discounted petrol, and vehicle financing (KoboWin). Drivers on the Kobo360 app earn on average approximately $5000 per month, according to Ozor.

Under KoboCare, Kobo360 has also created an HMO for drivers and an incentive based program to pay for education. “We give school fee support, a 5000 Naira bonus per trip for drivers toward educational expenses for their kids,” said Ozor.

Kobo360 will complete limited expansion into new markets Ghana, Togo, and Cote D’Ivoire in 2019. “The expansion will be with existing customers, one in the port operations business, one in FMCG, and another in agriculture,” said Ozor

Ozor thinks the startup’s asset-free, digital platform and business model can outpace traditional long-haul 3PL providers in Nigeria by handling more volume at cheaper prices.

“Owning trucks is just too difficult to manage. The best scalable model is to aggregate trucks,” he told TechCrunch in a previous interview.

With the latest investment, IFC’s regional head for Africa Wale Ayeni and TLcom senior partner Omobola Johnson will join Kobo360’s board. “There’s a lot of inefficiencies in long-haul freight in Africa…and they’re building a platform that can help a lot of these issues,” said Ayeni of Kobo360’s appeal as an investment.

The company has served 900 businesses, aggregated a fleet of 8000 drivers and moved 155 million kilograms, per company stats. Top clients include Honeywell, Olam, Unilever, Dangote, and DHL.

MarketLine estimated the value of Nigeria’s transportation sector in 2016 at $6 billion, with 99.4 percent comprising road freight.

Logistics has become an active space in Africa’s tech sector with startup entrepreneurs connecting digital to delivery models. In Nigeria, Jumia founder Tunde Kehinde departed and founded Africa Courier Express. Startup Max.ng is wrapping an app around motorcycles as an e-delivery platform. Nairobi-based Lori Systems has moved into digital coordination of trucking in East Africa. And U.S.-based Zipline—who launched drone delivery of commercial medical supplies in partnership with the government of Rwanda and support of UPS—and is in “process of expanding to several other countries,” according to a spokesperson.

Kobo360 has plans for broader Africa expansion but would not name additional countries yet.

Ozor said the company is profitable, though the startup does not release financial results. Wale Ayeni also wouldn’t divulge revenue figures, but confirmed IFC’s did full “legal and financial due diligence on Kobo’s stats,” as part of the investment.

Ozor named Lori Systems as Kobo360’s closest African startup competitor.

On the biggest challenge to revenue generation, it’s all about service delivery and execution, according to Ozor.

“We already have volume and demand in the market. The biggest threat to revenues is if Kobo360’s platform doesn’t succeed in solving our client’s problems and bringing reliability to their needs,” he said.

News Source = techcrunch.com

BoxLock secures your booty against porch pirates

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This clever – if expensive – product is called the BoxLock and it is a keyless padlock that lets your package delivery person scan and drop off your packages into a locked box. The system essentially watches for a shipping event and then waits for the right barcode before opening. Once the delivery person scans the package, the lock opens, the delivery person sticks the package in a box or shed (not included) and locks it back up. You then go and grab your package at your leisure.

The lock costs $129.

The company appeared on everyone’s favorite show, Shark Tank, where they demonstrated the system with a fake door and fake UPS dude.

The internal battery lasts 30 days on one charge and it connects to your phone and house via Wi-Fi. While the system does require a box – it’s called BoxLock, after all, not LockBox – it’s a clever solution to those pesky porch pirates who endlessly steal my YorkieLoversBox deliveries.

News Source = techcrunch.com

African experiments with drone technologies could leapfrog decades of infrastructure neglect

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A drone revolution is coming to sub-Saharan Africa.

Countries across the continent are experimenting with this 21st century technology as a way to leapfrog decades of neglect of 20th century infrastructure.

Over the last two years, San Francisco-based startup Zipline launched a national UAV delivery program in East Africa; South Africa passed commercial drone legislation to train and license pilots; and Malawi even opened a Drone Test Corridor to African and its global partners. 

In Rwanda, the country’s government became one of the first adopters of performance-based regulations for all drones earlier this year. The country’s progressive UAV programs drew special attention from the White House and two U.S. Secretaries of Transportation.

Some experts believe Africa’s drone space could contribute to UAV development in the U.S. and elsewhere around the globe.

“The fact that [global drone] companies can operate in Africa and showcase amazing use cases…is a big benefit,” said Lisa Ellsman, co-executive director of the Commercial Drone Alliance.

Test in Africa

It’s clear that the UAV programs in Malawi and Rwanda are getting attention from international drone companies.

Opened in 2017, Malawi’s Drone Test Corridor has been accepting global applications. The program is managed by the country’s Civil Aviation Authority in partnership with UNICEF.

The primary purpose is to test UAV’s for humanitarian purposes, but the program “was designed to provide a controlled platform for… governments…and other partners…to explore how UAV’s can help deliver services,” according to Michael Scheibenreif, UNICEF’s drone lead in Malawi.

That decision to include the private sector opened the launch pads for commercial drones. Swedish firm GLOBEHE has tested using the corridor and reps from Chinese e-commerce company JD have toured the site. Other companies to test in Malawi’s corridor include Belgian UAV air traffic systems company Unifly and U.S. delivery drone manufacturer Vayu, according to Scheibenreif.

Though the government of Rwanda is most visible for its Zipline partnership, it shaping a national testing program for multiple drone actors. 

“We don’t want to limit ourselves with just one operator,” said Claudette Irere, Director General of the Ministry of Information Technology and Communications (MiTEC).

“When we started with Zipline it was more of a pilot to see if this could work,” she said. “As we’ve gotten more interest and have grown the program…this gives us an opportunity to open up to other drone operators, and give space to our local UAV operators.”

Irere said Rwanda has been approached by 16 drone operators, “some of them big names”—but could not reveal them due to temporary NDAs. She also highlighted Charis UAS, a Rwandan drone company, that’s used the country’s test program, and is now operating commercially in and outside of Rwanda.

UAV Policy

Africa’s commercial drone history is largely compressed to a handful of projects and countries within the last 5-7 years. Several governments have jumped out ahead on UAV policy.

In 2016, South Africa passed drone legislation regulating the sector under the country’s Civil Aviation Authority. The guidelines set training requirements for commercial drone pilots to receive Remote Pilot Licenses (RPLs) for Remotely Piloted Aircraft Systems. At the end of 2017 South Africa had registered 686 RPLs and 663 drone aircraft systems, according to a recent State of Drone Report.

Over the last year and a half Kenya, Ghana, and Tanzania have issued or updated drone regulatory guidelines and announced future UAV initiatives.  

In 2018, Rwanda extended its leadership role on drone policy when it adopted performance-based regulations for all drones—claiming to be the first country in the world to do so.

So what does this mean?

“In performance-based regulation the government states this is our safety threshold and you companies tell us the combination of technologies and operational mitigations you’re going to use to meet it,” said Timothy Reuter, Civil Drones Project Head at the World Economic Forum.

Lisa Ellsman, shared a similar interpretation.

“Rather than the government saying ‘you have to use this kind of technology to stop your drone,’ they would say, ‘your drone needs to be able to stop in so many seconds,’” she said.

This gives the drone operators flexibility to build drones around performance targets, vs. “prescriptively requiring a certain type of technology,” according to Ellsman.

Rwanda is still working out the implementation of its performance-based regulations, according to MiTEC’s Claudette Irere. They’ve entered a partnership with the World Economic Forum to further build out best practices. Rwanda will also soon release an online portal for global drone operators to apply to test there.

As for Rwanda being first to release performance-based regulations, that’s disputable. “Many States around the world have been developing and implementing performance-based regulations for unmanned aircraft,” said Leslie Cary, Program Manager for the International Civil Aviation Authority’s Remotely Piloted Aircraft System. “ICAO has not monitored all of these States to determine which was first,” she added.

Other governments have done bits and pieces of Rwanda’s drone policy, according to Timothy Reuter, the head of the civil drones project at the World Economic Forum. “But as currently written in Rwanda, it’s the broadest implementation of performance based regulations in the world.”

Commercial Use Cases

As the UAV programs across Africa mature, there are a handful of strong examples and several projects to watch.

With Zipline as the most robust and visible drone use case in Sub-Saharan Africa.

While the startup’s primary focus is delivery of critical medical supplies, execs repeatedly underscore that Zipline is a for-profit venture backed by $41 million in VC.

The San Francisco-based robotics company — that also manufactures its own UAVs — was one of the earliest drone partners of the government of Rwanda.

Zipline demonstration

The alliance also brought UPS and the UPS Foundation into the mix, who supports Zipline with financial and logistical support.

After several test rounds, Zipline went live with the program in October, becoming the world’s first national drone delivery program at scale.

“We’ve since completed over 6000 deliveries and logged 500,000 flight kilometers,” Zipline co-founder Keenan Wyrobek told TechCrunch. “We’re planning to go live in Tanzania soon and talking to some other African countries.”  

In May Zipline was accepted into the U.S. Department of Transportation’s Unmanned Aircraft Systems Integration Pilot Program (UAS IPP). Out of 149 applicants, the Africa focused startup was one of 10 selected to participate in a drone pilot in the U.S.– to operate beyond visual line of sight medical delivery services in North Carolina.    

In a non-delivery commercial use case, South Africa’s Rocketmine has built out a UAV survey business in 5 countries. The company looks to book $2 million in revenue in 2018 for its “aerial data solutions” services in mining, agriculture, forestry, and civil engineering.

“We have over 50 aircraft now, compared to 15 a couple years ago,” Rocketmine CEO Christopher Clark told TechCrunch. “We operate in South Africa, Namibia, Ghana, Ivory Coast, and moved into Mexico.”

Rocketmine doesn’t plan to enter delivery services, but is looking to expand into the surveillance and security market. “After the survey market that’s probably the biggest request we get from our customers,” said Clark.

More African use cases are likely to come from the Lake Victoria Challenge — a mission specific drone operator challenge set in Tanzania’s Mwanza testing corridor. WeRobotics has also opened FlyingLabs in Kenya, Tanzania, and Benin. And the government of Zambia is reportedly working with Sony’s Aerosense on a drone delivery pilot program.

Africa and Global UAV

With Europe, Asia, and the U.S. rapidly developing drone regulations and testing (or already operating) delivery programs (see JD.com in China), Africa may not take the sole position as the leader in global UAV development — but these pilot projects in the particularly challenging environments these geographies (and economies) represent will shape the development of the drone industry. 

The continent’s test programs — and Rwanda’s performance-based drone regulations in particular — could advance beyond visual line of sight UAV technology at a quicker pace. This could set the stage for faster development of automated drone fleets for remote internet access, commercial and medical delivery, and even give Africa a lead in testing flying autonomous taxis.

“With drones, Africa is willing to take more bold steps more quickly because the benefits are there and the countries have been willing to move in a more agile manner around regulation,” said the WEF’s Reuter.

“There’s an opportunity for Africa to maintain its leadership in this space,” he said. “But the countries need to be willing to take calculated risk to enable technology companies to deploy their solutions there.”

Reuter also underscored the potential for “drone companies that originate in Africa increasingly developing services.”

There’s a case to be made this is already happening with Zipline. Though founded in California, the startup honed its UAVs and delivery model in Rwanda.

“We’re absolutely leveraging our experience built in Africa as we now test through the UAS IPP program to deliver in the U.S.,” said Zipline co-founder Keenan Wyrobek.

News Source = techcrunch.com

Nigerian logistics startup Kobo360 accepted into YC, raises $1.2 million

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When Nigerian logistics startup Kobo360 interviewed for Y-Combinator’s 2018 cohort a question stood out to founder Obi Ozor. “‘What’s holding you back from becoming a Unicorn?’ they asked. My answer was simple: ‘working capital,’” said Ozor.

Kobo360 was accepted into YC’s 2018 class and gained some working capital in the form of $1.2M in pre-seed funding round led by Western Technology Investment announced this week. Lagos based Verod Capital Management also joined to support Kobo360.

The startup — with an Uber -like app that connects Nigerian truckers to companies with freight needs — will use the funds to pay drivers online immediately after successful hauls.

Kobo360 is also launching the Kobo Wealth Investment Network, or KoboWIN—a crowd-invest, vehicle financing program. Through it Kobo drivers can finance new trucks through citizen investors and pay them back directly (with interest) over a 60 month period.

Ozor said Kobo360 created the platform because of limited vehicle finance options for truckers in Nigeria.  “We hope KoboWIN…will inject 20,000…[additional] trucks on the Kobo platform,” he told TechCrunch.

On Kobo360’s utility, “We give drivers the demand and technology to power their businesses,” said Ozor. “An average trucker will make $3,500 a month with our app. That’s middle class territory in Nigeria.”

Kobo360 has served 324 businesses, aggregated a fleet of 5480 drivers, and moved 37.6M kilograms of cargo since 2017, per company stats. Top clients include Honeywell, Olam, Unilever, and DHL.

Ozor previously headed Uber Nigeria, before teaming up with Ife Oyodeli to co-found Kobo360. They initially targeted 3PL for Nigeria’s e-commerce boom — namely Jumia (now Africa’s first unicorn) and Konga (recently purchased in a distressed acquisition).

“We started doing last mile delivery…but the volume just wasn’t there for us, so we decided to pivot…to an asset free model around long-haul trucking,” said Ozor.

Kobo360 was accepted into YC’s Summer ’18 batch—receiving $120K for 7 percent equity—and will present at an August Demo Day in front of YC Investors. “We were impressed by both Obi and Ife as founders.  They were growing quickly and had a strong vision for the company,” YC partner Tim Brady told TechCrunch.

Kobo360’s app currently coordinates 5000 trips a month, according to Ozor. He thinks the startup’s asset free, digital platform and business model can outpace traditional long-haul 3PL providers in Nigeria by handling more volume at cheaper prices.

“Owning trucks is just too difficult to manage. The best scalable model is to aggregate trucks,” he said. “We now have more trucks than providers like TSL and they’ve been here….years. By the end of this year we plan to have 20,000 trucks on our app—probably more than anyone on this continent.”

On price, Ozor named the ability of the Kobo360 app to more accurately and consistently coordinate return freight trips once truckers have dropped off first loads.

“Logistics in Nigeria have been priced based on the assumption drivers are going to run empty on the way back…When we now match freight with return trips, prices crash.”

Kobo360 is profitable, according to Ozor. Though he wouldn’t provide exact figures, he said reviewing the company’s financial performance was part of YC’s vetting process.

Logistics has become an active space in Africa’s tech sector with startup entrepreneurs connecting digital to delivery models. In Nigeria, Jumia founder Tunde Kehinde departed and founded Africa Courier Express. Startup Max.ng is wrapping an app around motorcycles as an e-delivery platform. Nairobi based Lori Systems has moved into digital coordination of trucking in East Africa. And U.S. based Zipline is working with the government of Rwanda and partner UPS to master commercial drone delivery of medical supplies on the continent.

Kobo360 will expand in Togo, Ghana, Cote D’Ivoire, and Senegal. “We’ll be in Ghana this year and next year the other countries,” said Ozor.

In addition to KoboWIN, it will also add more driver training and safety programs.

“We are driver focused. Drivers are the key to our success. Even our app is driver focused,” said Ozor. Kobo360 will launch a new version of its app in Hausa and Pidgin this August, both local languages common to drivers.

“Execution is the key thing in logistics. It has to be reliable, affordable, and it has to be execution focused,” said Ozor. “If drivers are treated well, they are going to deliver things on time.”

News Source = techcrunch.com

Amazon isn’t to blame the Postal Service’s woes, but it will need to innovate to survive

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In the past week, the 45th president has Twit-tacked Amazon three times and, potentially, cost their shareholders over $40 billion in market cap or just more than one Greek economy.

At the heart of our current President’s criticism is a claim that Amazon is making a mint and leaving a *failing* U.S. Postal Service holding the bag. It’s not a new critique from the Twitterer-in-Chief, but it is one that’s worth unpacking given the crippling effect technologies have had on the USPS — where email is even more reliable than a carrier undeterred by “snow nor rain nor heat nor gloom of night.

Is it failing?

“Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer?” This infantile question was posed by President Trump on Twitter in December 2017. While it’s not clear what exactly prompted Trump’s criticism,  the tweet did spark a wave of debate as to whether the Postal Service is indeed failing and, if so, whether Amazon is to blame.

First of all, it’s true that the Postal Service is “losing billions of dollars a year” – $2.7 billion in 2017, to be more precise. In fact, the Postal Service has been losing money for over a decade. And the USPS does have a curious relationship with Amazon. While competitors UPS and FedEx charge the e-commerce giant $7-$8 per package, USPS only charges for $2 for the service. However, as with most stories, that of USPS is more complicated.

USPS and Amazon

The USPS-Amazon relationship may be seen as “dumb” by the 45th president, but to many it’s a piece of shrewd business on the part of the Postal Service. As of 2017, Amazon was USPS’s biggest customer, and an intelligent way for the independent agency – that traditionally made its money by having a monopoly on first class mail – to get a piece of the increasingly profitable package delivery pie. It’s not the first time that the Postal Service has tried to muscle its way in on the growing package delivery industry. Back in 2010, the entertainment company Netflix accounted for $600 million from its DVD subscription service. Of course, the Netflix DVD delivery service is fast fading and being replaced by on-demand streaming; and Amazon look to be preparing their own delivery service. It seems that the USPS may have to prepare itself to be jolted by another wave of disruption.

One-Two Punch of Email and a Financial Crisis

The Postal Service’s first major battle against the age of innovation came with the rise of email, and it didn’t take the beating that you might expect. Despite the fact that in 2002 the majority of Americans used email, the Postal Service still managed to make profit between 2003 and 2006. During this time, people were still writing letters, sending greetings cards and, perhaps most importantly, bills were still sent by post.

It wasn’t until the 2007 global financial crisis that the Postal Service took a hit that, arguably, it still hasn’t recovered from. After thousands of businesses suffered from the crisis, they started to cut back on expenses wherever possible, and one such place was mail. Back in 2000, nearly two-thirds of bills were delivered by USPS, and the total revenue from bill payments in this year was estimated at between $15 and $18 billion. Between 2006 and 2010, USPS volume fell by 42 billions pieces, with 15 billion of those being caused by electronic billing.

And if that weren’t enough, the rise of social media further confounded USPS’s problems. Between 2010 and 2014, postcard volume fell by 430 million. As more and more people began logging into Facebook, Instagram and Snapchat to send virtual Christmas cards and birthday wishes, fewer people were sending mail, and therefore fewer profits for the agency that had had its fair share of knocks in the 21st century.

Photo courtesy of Flickr/André-Pierre du Plessis

Innovating within a Risk-Averse Government

To suggest that those in charge at the Postal Service have been idly watching as new technologies disrupt and threaten the agency would be unfair.

It is an organization that looks to engage with the latest technology. For instance, in 2014, it released a white paper on the impact that 3D printing could have on the industry and how the Postal Service could benefit; and again in 2015 it released another on the Internet of Things. Both papers were clearly commissioned with a degree of prescience, being published before either technology had begun to pervade the public consciousness.

Unfortunately, though, forward-thinking initiatives such as these have been blocked before they can enter the action stage. USPS’s status as a quasi government entity may have its benefits, such as a monopoly on all first class post, but in return Congress has a say in how the agency is run. It can outline the products and services provided by the Postal Service, and set its prices. However, unlike other Federal agencies, USPS receives no funding, and hasn’t done since 1982.

In 2016, the Postal Service wanted to make the most of its relationship with Netflix and other video rental business, but the proposal was blocked by the Postal Regulatory Commission. In 2013, USPS attempted to end Saturday letter delivery – a change that would have saved $2 billion a year. The proposal was blocked by Congress. And in 2016, it was ordered to lower the cost of postage stamps from 49 cents to 47 cents, resulting in a $2 billion annual cost.

At the heart of the troubled USPS-Congress relationship lies the problem. A big existential question mark hangs over the Postal Service’s head: what exactly is it? With 2.7 million people working for it, it’s the biggest employer in the US (Walmart, by comparison had 2.2 million as of 2017). It also delivers to remote locations that private companies like FedEx and UPS won’t touch. For these reasons, it exists out of necessity. There are also those who want to see the Postal Service fully privatized or even abolished, believing it to be an outdated relic of nostalgia.

Understandably, those within the Postal Service are equally unsure as to what they should be. On one side, they’re being encouraged to innovate and drive up profits, and on the other they’re being blocked making the changes necessary.

As it stands, the USPS motto “neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds” still holds true. Their resilience through massive shifts in consumer behavior is nothing short of remarkable.

They are at the service of the American people, and so it’s up to them to decide what they want it to be. Although it may be true to say the Post Office is losing money thanks to Congress and cutting Amazon a more-than-fair deal, its importance is far more nuanced and complex than he gives it credit. And without the Postal Service, it would be more than just Amazon that would be losing out.

As the world moves to more and more virtual communication channels it will be fascinating to see USPS evolve.

News Source = techcrunch.com

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