Kobo360 joins Flutterwave, Wave in the list of top YC-backed startups in Africa

Johnstone Kpilaakaa -

Y Combinator has named its 2023 top companies, the list comprises public, private and acquired YC-backed companies valued at over $150 million. According to the latest data from YC, more than 290 private companies and 33 exits are valued at over $150 million, over 90 are worth more than $1 billion, and 16 are public.

Last year, only seven African companies—Flutterwave, Wave, Paystack, Reliance Health, 54gene, Yassir and Nomba—were on the list of the global accelerator's most valuable companies. However, Nigerian freight logistics startup, Kobo360 has now been added to the list—the company participated in the summer batch of 2018.

In the list which is sorted by the company's valuation from their latest funding round, Kobo360 is ahead of Nigerian fintech, Nomba and is next to 54Gene.

In 2019, Kobo360 secured a $20 million Series A round led by Goldman Sachs and $10 million in working capital financing from Nigerian commercial banks. Later in December 2021, the company raised $48 million Series B in equity and debt, half of its fundraising plan for the round.

The Series B round saw the participation of existing investors such as TLCom Capital, IFC, Goldman Sachs (Juven) and other bank and insurance partners — was led by the Fund for Export Development in Africa (FEDA), the equity arm of Afreximbank.

CEO Obi Ozor (red cap) during a visit to the Kobo360 team in Uganda

Although 2019 was a "good business" year for the logistics company, the COVID-19 pandemic in 2020 which was accompanied by travel restrictions affected Kobo360's unground operations. These restrictions led the company to make a slight pivot—the company worked with insurance firms to invest over $4 million to build an insurtech product that tackled the risk of goods-in-transit, driver misbehaviour and credit default, according to TechCrunch.

"Most times, your investors and board are present when it is working. When it’s not working, it can get lonely. At one point, I took leave from work and went for some leadership courses to see if I could figure out how to improve my capacity because I felt like I didn’t have enough ability to run the company anymore," Obi Ozor, Kobo360 co-founder and CEO, said. "It is things people don’t talk about; as a founder, there comes a time when we are not the most experienced to run these companies. Some of us actually don’t fit our CEO roles; if we had to be interviewed for our roles, most wouldn’t make the cut."

🗞️
In 2022, Kobo360's co-founder and Head of Growth, Ife Oyedele II resigned due to "personal reasons". He was replaced by Phyllis Kemide Senah, an ex-Citi Bank and Google c-suite employee, who also left the company in November 2022.

Kobo360 also developed Payfasta, an embedded finance platform, to fix the delayed revenue collection problem. The company deployed $100 million through Payfasta and actively financed truck drivers and partners faster than before. Its nonperforming assets (NPAs) dropped to 0.8%, profit margins went up 240% and the receivables cycle reduced by 64% from 138 days to 49 days.

In an interview with TechCrunch last year, CEO Ozor said, "when we initially focused on growth, we didn’t care about all these things. We just ate up all that cost. So gradually, because we delivered insurance, which is per trip and cheaper and a financing product that works, we started to move to positive unit economics."

"We stopped covering some of these costs and passed them to the transporters and field operations. We moved the whole collection process digitally and created credit wallets for every manufacturer where they were to maintain a certain balance and not exceed a particular timeline to pay up what they owed," Ozor added.

🚚
Since its launch in 2018, Kobo360 has worked with over 50,000 truck drivers in Nigeria, Benin, Ghana, Uganda, Kenya, Côte d'Ivoire and Burkina Faso to help them transport over 760 million kilos (1.67 billion pounds) of goods, worth an estimated $200 billion.

The company charges drivers between 5% and 10% of their fee, and in return "adds value by linking them [drivers] with goods for their return journey," Ozor told CNN.
Dangote and Unilever are among the over 700+ African companies that use Kobo360

YC lists eight African startups as "top companies" in 2023

The 2023 Y Combinator top companies list was categorised into private, public, exited, and breakthrough companies; seven African companies were listed in the private category which is made up of 294 companies, and one African company was on the exited list—that is Paystack, the first YC-backed startup from Nigeria.

"Private companies and exits are sorted by the company's valuation from their latest funding round, and all are valued at over $150 million. This is the list based on the company with the highest valuation. Aside from Yassir and Wave, the rest are Nigerian companies.

Flutterwave — 30

Nigerian fintech company, Flutterwave in February 2022 tripled its valuation to over $3 billion after raising $250 million in a Series D round led by B Capital Group, and with participation from Alta Park Capital, Whale Rock Capital, Lux Capital and other investors.

At $3 billion, Flutterwave is currently the highest-valued African startup, surpassing the $2 billion valuation set by SoftBank-backed fintech OPay and FTX-backed cross-border payments platform Chipper Cash in 2022.

🔻
It is important to note that Chipper Cash's valuation was recently slashed by 37.5%—from $2 billion to $1.25 billion. 

Wave — 49

In July 2022, International Finance Corporation, a member of the World Bank Group invested €90 million in Wave, Francophone Africa's first unicorn to spur financial inclusion and support economic growth in Senegal and Côte d'Ivoire.

The €90 million comprises a €25 million loan from IFC's own account, B Loans of a combined €41 million from Symbiotics, Blue Orchard, responsAbility, and Lendable, as well as parallel loans of €24 million from Finnfund and Norfund.

Yassir — 120

Algerian super-app, Yassir raised a $150 million Series B fund from BOND in November 2022. The company has raised a total of $193.25 million since its inception in 2017, this includes its $30 million Series A round.

Reliance Health — 208

Nigerian healthtech startup, Reliance Health in February 2022 closed $40 million in a Series B round led by General Atlantic with participation from Partech and other global and local investors.

The round is arguably the largest Series B round in the African healthtech industry as of the time of this report.  

54Gene — 260

About a year after closing a $15 million Series A round, a Nigeria-based healthtech startup raised $25 million in a Series B round led by venture capitalists Cathay AfricInvest Innovation Fund. Some existing investors like Adjuvant Capital, KdT Ventures, and Ingressive Capital also participated in the round.

🔻
Amidst the ongoing economic downturn, 54Gene's valuation was reportedly slashed by over $100 million in 2022, this followed the layoff of more than 100 employees and its CEO's resignation. 

Kobo360 — 261

In 2019, Kobo360 secured a $20 million Series A round led by Goldman Sachs and $10 million in working capital financing from Nigerian commercial banks. Later in December 2021, the company raised $48 million Series B in equity and debt, half of its fundraising plan for the round.

Nomba — 273

The $5 million Series A secured by Nomba (formerly Kudi) in April 2019 is the last publicly disclosed round by the company. At the time, the company's total investment since its inception was $6.7 million.

Paystack — 27

Out of 32 exited companies, Paystack was listed as number 27; Stripe which acquired Paystack for over $200 million in 2020, is currently YC's most valued company in the private category.

"One thing to note is that this is not an exhaustive list of YC's top companies. We allowed founders to opt out of being listed for any reason," the global accelerator stated.

Editor's Note: This story was updated with the news about the slashing of 54Gene's valuation (March 2, 2023)