ABA Editorial · Jun 24, 2025 · 13 min read
African logistics infrastructure adds between 40 and 60 percent to the cost of goods according to IFC and Google research, one of the highest logistics cost penalties in the world. Venture capital has retreated dramatically from the sector: in 2024 only three African logistics startups (Renda, Fez Delivery, Cargo Plus) raised a combined USD 2.1 million. This report maps where the sector sits at the start of 2026.
African logistics is one of the sectors where the gap between structural opportunity and commercial execution is most visible. The opportunity is unambiguous. An International Finance Corporation and Google report has estimated that poor infrastructure and logistics can add between 40 and 60 percent to the cost of goods in Africa, one of the highest logistics cost penalties in the world. Even within local markets, inefficient distribution networks cause locally grown fresh produce to cost substantially more in African cities than equivalent products cost in developed markets, even though the underlying cost of labor is substantially lower. Closing this cost gap would improve competitiveness across every sector that depends on physical goods movement, which is essentially every non-digital economic activity. The continent's digital economy alone could reach approximately USD 180 billion by 2025 according to the same IFC and Google research, accounting for more than 5 percent of African GDP, and logistics is one of the enabling infrastructure categories that determines how much of that digital economy can actually be realized. And yet the commercial execution of African logistics has been difficult. This report maps where the sector sits at the start of 2026.
The most striking development in African logistics over the last two years has been the dramatic contraction of venture capital flowing into the category. In 2024, only three African logistics startups (Renda, Fez Delivery, and Cargo Plus) raised venture capital, securing a combined USD 2.1 million according to sector coverage. This is a fraction of the amounts raised during the 2019 to 2022 period when operators including Kobo360, Lori Systems, and Sendy attracted tens of millions of dollars in individual funding rounds and the category was widely cited as one of the most promising in African venture.
The contraction reflects both general African venture capital retreat and category-specific lessons. Unlike e-commerce or fintech, which benefit from low marginal costs and strong network effects, logistics is capital-intensive and dependent on credit cycles. Each freight platform needs working capital to pay truck drivers or other providers before customers settle their invoices. Each last-mile delivery operation requires physical infrastructure (vehicles, sorting facilities, warehouse capacity) that does not scale with pure software economics. The investors who once believed digital freight platforms could achieve software-like margins have become skeptical, and that skepticism has translated into a drying up of new capital for the category.
Kobo360, the Nigerian freight logistics company once described as Africa's "Uber of trucks," is the most visible example of the structural challenges facing African digital freight. The company was founded in 2017 by Obi Ozor and Ife Oyedele II and raised approximately USD 79 million across multiple rounds, including a USD 30 million Series A in 2019 led by Goldman Sachs and a USD 48 million Series B in 2021. At its peak, Kobo360 had over 10,000 drivers and trucks on its platform, served major clients including Honeywell, Olam, Unilever, Dangote, and DHL, and operated across Nigeria, Togo, Ghana, and Kenya.
Kobo360's specific vulnerability was working capital. The company paid truck drivers upfront but waited 30 to 90 days for manufacturers and distributors to settle invoices, creating a cash flow gap that it bridged through bank credit lines. When a financial partner cut off credit over unserviced debt, the company lost access to customer-domiciled accounts and its trip volumes collapsed. By 2024, most staff had been laid off. In March 2025, founder Obi Ozor bought back the company from its investors (who wrote down their equity), assumed approximately NGN 10 billion (around USD 15.82 million) of debt, and announced a revival plan focused on traditional financing and haulage partnerships rather than venture capital.
Sendy, the Kenyan logistics operator founded in 2015, had raised approximately USD 26.5 million from Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, and others before shutting down in August 2023 after a pivot away from its original logistics model. Lori Systems, another high-profile Kenyan freight tech operator that had raised over USD 25 million, has not disclosed new funding rounds in the recent period.
The commercial difficulties of digital freight platforms do not invalidate the underlying structural case for African logistics investment. The IFC and Google estimate that logistics adds 40 to 60 percent to the cost of goods in Africa because the underlying infrastructure problems are real: poor roads, inefficient ports, fragmented trucking markets, customs delays, weak warehousing, and limited cold chain. Each of these problems represents both a cost penalty for the current economy and a commercial opportunity for operators who can address them at sustainable unit economics. The question is which operators, with which business models, under which capital structures, can actually deliver sustainable solutions.
The African Continental Free Trade Area (AfCFTA), signed in 2018 and formally in force since 2021, represents the most significant policy initiative affecting African logistics and trade. The agreement aims to reduce tariff and non-tariff barriers to intra-African trade, creating an integrated market across 54 countries and approximately 1.4 billion people. If fully implemented, the AfCFTA could substantially increase intra-African trade volumes and create new logistics flows that the current infrastructure is poorly equipped to handle. Logistics operators who position themselves for AfCFTA implementation could capture value that was previously impossible at the scale of national markets alone.
The practical realization of AfCFTA benefits has been slower than the agreement's advocates hoped. Non-tariff barriers including customs procedures, standards harmonization, and the physical infrastructure of cross-border trade remain significant obstacles. But the structural commitment to integration is real, and operators positioning for its eventual deeper realization may capture substantial value over the next five to ten years.
Three indicators will shape African logistics and trade. First, whether any operator demonstrates a commercially sustainable digital freight model, either through traditional financing approaches like Obi Ozor's revived Kobo360 or through new operators with better-aligned unit economics. Second, whether AfCFTA implementation produces measurable reductions in intra-African trade friction, creating new logistics demand at meaningful scale. Third, whether public infrastructure investment (roads, ports, customs modernization) keeps pace with private-sector efforts to work around infrastructure gaps. African logistics is in a difficult moment, but it is also one of the sectors with the most significant gap between current performance and achievable performance, and that gap will eventually be closed by some combination of public investment and commercial innovation.