Nigeria’s Topship Raises $ 2.5 Million from Flexport and YC to Help Merchants with International Shipping – TechCrunch

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African traders face many challenges when it comes to international shipping, ranging from logistics and customs to hidden and excessive charges.

Digital freight forwarders on the continent have grown to solve these supply chain problems. In a sense, they focus on the similarity between the $ 8 billion company and Flexport’s market leader; some called themselves “Flexport for Africa».

A recent YC graduate Topship is one such startup, and it raised $ 2.5 million a few months after completion the recent YC winter party. Flexport is its main investor. Other representatives include Y Combinator, Soma Capital, Starling Ventures, Olive Tree Capital, Capital X and True Capital. Individual investors in the round include Imad Ahund, CEO of Mercury, and Arash Ferdovi, co-founder of Dropbox.

Topship was founded in 2020 during the pandemic, when he was co-founder and CEO Moses Enenvali noticed the growing need of traders to deliver parcels and goods outside Nigeria. He built relationships with these merchants after working with logistics company ACE Logistics and e-commerce provider Sendbox. Although demand was stable during his work with both companies from 2015 to 2020, it was different.

“The world has closed, but there has been a high demand for things, and the demand for international transport is growing at the same time. So I said, “That’s interesting.” It wasn’t then business like us simple helped these people move things like a little fuss, ”Enenvali told TechCrunch during the call.

Globally, about 60% of air cargo is carried in the passenger cabin, which is one of the reasons that to some extent the delivery of air cargo is easier for starters than ocean cargo. For Enenwali, it was even wiser to go this route because passenger planes were flying half-empty most of 2020. After months of topship iterations went live in March 2021 from Junaid Babatunde as technical director.

Topship says it wants to create the easiest way for African businesses to export and import parcels and goods to their customers, suppliers and distributors worldwide. The company and ssimilar players such as SauteSEND and OnePort365 want to improve the overall delivery experience in Africa. However, Topship’s expectations are quite high; In a statement, he said that “its mission is to make shipping in Africa as easy and stress-free as booking an Uber trip.” And Fr.A major factor that may benefit him is his focus on air travel, even as others explore the mix of air travel, oceans and freight that first launched Flexport.

CEO Enenvali claims that while African startups, including him, are taking some characters from the Flexport textbook, he does not believe Africa is ready for a unicorn model that is very difficult to move cargo in the ocean.

“The reason why the Flexport model doesn’t work here is that it is strongly invested in shipping, and we lack ports on the continent. For example, in Nigeria we have one functional port, and for ocean freight to work, we need ports, railways and roads for freight. But we don’t have roads, and we don’t have railroads, ”the CEO said, citing reasons why Topship doesn’t deal with ocean freight..

“It’s hard to connect the continent with ocean cargo. The Flexport business model makes a lot of sense even in how they attack problems aggressively and i love it. But for Africa we need to adjust it to fit the use case. So what we’ve seen is the way to go connect the continent through the air. Every country and big city on the continent has an airport, and airlines fly to all these airports every day. ”

Topship serves a wide range of users. From a trader who carries tons of heavy equipment, and a sole proprietor who sends parcels of a student with postal documents to a school abroad, and a Generation Z who makes purchases at a foreign store, Topship is a cross-border local and international delivery solution between digital freight and e-commerce performance.. Flexport has supported several African companies from both categories, such as Trella, Flextock, ShipBlu, Starting boxand Fryterium.

According to Enewali, Topship allows 1,500 traders to move cargo and parcels from Nigeria to more than 150 countries. While this may help Nigerian traders receive parcels from the other side, they can only accept shipments from the US, UK and China.

The company’s revenue comes from the sale of shipping insurance and obtaining a margin on transactions. Enevali said the company is studying other revenue streams, including trade finance and customs duties. The company has recorded revenue growth of ~ 50% per month since joining YC in January this year.

«I think what YC does most simple push you to dive as deep as possible into the understanding of your users, ”Topship’s CEO said after YC’s revenue growth. Looking to the future, much comes from this spirit the user is the most important part of the puzzle and we have to be obsessive about it. We take all the information and insights we have learned from our users over the last five months or six months, and embed it in the product so that it is the focus of traders».

Late last year, groups of traders from Ghana, Tanzania and Kenya invited Topship to assess the possibility of launching in relevant markets. Enevali said this new funding provides Topship with deep enough pockets to continue and start operations there. In addition, part of the investment would improve asset lighting technology and build a patented global shipping infrastructure to make imports and exports much faster and easier, he said.

Topship has also allocated money for clothing design and retail grants $ 3,500 each to reward a new and well-known fashion brand in Nigeria to “support the future of the growing e-commerce sector”.

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