Jetstream, a Ghanaian e-logistics platform for B2B importers and exporters from Africa, takes on $13M in equity and debt • TechCrunch
The cross-border logistics services market is expected to reach $32 billion in revenue by 2025, with several companies vying for market share in an increasingly competitive industry. Ghanaian e-logistics startup Jetstream Africa is on the list and today announces that it has secured $13 million in pre-Series A debt and equity funding.
Fintech lender and private equity firm Cauris was the sole provider of the debt financing while equity investors include Octerra, Wuri Ventures, Seed9, The MBA Fund, French development institution Proparco and ASCVC, a fund of venture capital founded by executives from the supply chain visibility platform. Project44. Existing investors Alitheia IDF and Golden Palm also participated.
The round comes about 18 months after the Tema-based cross-border logistics hub announced a $3 million round (including $1 million in debt). Jetstream says the new investment will allow it to expand into new countries – it currently has a presence in 29 countries (12 in Africa) – and continue to grow its technology platform, which vertically brings together fragmented logistics providers and financing in the world of African trade.
At the time of its seed round, Jetstream Africa had two business lines: one providing logistics services to import and export shipowners and the other distributing finance to freight forwarders. However, Jetstream has bundled the two products over the past two months to serve freight owners only. According to the startup’s Managing Director, Miishe Addy, Jetstream has achieved product-market fit as a result.
“By running these two lines side by side, we observed that the import or export business controls the supply chain,” she said on the pivot. “Although freight owners and freight forwarders have a lot of information asymmetry, the importer and exporter can put pressure on the freight forwarder to digitize the supply chain. We have simplified our business into a simple range of import-export products by linking them directly to trade finance and logistics.”
Jetstream’s new business model has shifted to that of a freight forwarder. The company now gets involved in the end-to-end movement of shippers’ cargo (both import and export), charges fees and, most importantly, provides finance to those in need. . Generally, the traditional method for most freight owners when seeking a loan to run their business is to go to banks for a letter of credit. Whether or not they get it depends on their counterparty’s bank. To clarify: Suppose a Ghanaian importer transacts with a Chinese exporter; the bank in Ghana collects cedi and interacts with the exporter’s bank in China, which, acting as guarantor for the owner of the cargo, distributes the yuan.
It is a time-consuming process that can take several weeks. And for freight owners on both sides of the transaction who want to access faster credit, the letter of credit system is not efficient, forcing them to find other sources of capital that require some form collateral for their loans. Jetstream basically provides them with working capital backed by actual shipping. According to Addy, the three-year-old startup is taking security over the shipment. Rather than managing the letter of credit itself, Jetstream arranges loans – to be repaid within 15 to 90 days – through its banking partners and disburses the loan proceeds to each supplier in the supply chain.
“If you import 10 containers, in addition to paying for the real good, importers need to pay shipping company, customs broker on both sides, truck drivers on both sides, you need to pay warehouse operator in some case, or container terminal. There’s a minimum of nine different vendors you have to pay,” noted Addy, who co-founded Jetstream with COO Solomon Torgbor in 2018.
“And when somebody asks for a Jetstream loan, they don’t just tell me give me $50,000, but enough money to fund this entire expedition and pay these nine vendors. Also, we don’t don’t give the money to the owners of the cargo, but directly to the nine sellers.”
Jetstream has grown its trade finance proceeds from the $1 million in debt it secured in mid-2021 to approximately $9 million in total loans disbursed so far. Its projection is to increase that amount fivefold by the end of this year, Addy said. The CEO also mentioned that Jetstream went from one loan per month to 50 loans per month after changing business model, becoming EBITDA positive. Additionally, revenue grew 48% and active customers 102% over the past year, according to a statement shared by the e-logistics startup, which handles shipments that are 47% airfreight, 44% sea freight and 9% land transport. .
The 44-person team, which competes with Sote, SEND, One35 Port and MVX among others, has been able to forge several key partnerships for its next phase of growth, including multinational banks like Societe Generale and startups like Lami and MFS. Africa. Tokunboh Ishmael, co-founder and lead partner of Alitheia IDF, one of Jetstream’s investors, said this funding round, which supports the startup’s expansion into new markets, will see it capitalize on commercial policies. such as the AfCFTA, “enabling richer intercontinental trade”. which is needed to support inclusive economic development and unlock the full potential of the continent.