Nigerian Topship raises $2.5M from Flexport and YC to help merchants with international shipping – TechCrunch

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

Digital freight forwarders on the continent have grown to address these supply chain issues. In some ways, they resemble an $8 billion company and market leader in cargo space, Flexport; some have called themselves “Flexport for Africa”..”

Recent YC graduate Topship is one such startup and has raised a $2.5 million seed round months after wrapping up YC’s recent winter batch. Flexport is its main investor. Other backers include Y Combinator, Soma Capital, Starling Ventures, Olive Tree Capital, Capital X and True Capital.. Individual investors in the round include Mercury CEO Immad Akhund and Dropbox co-founder Arash Ferdowsi.

top ship was founded in 2020 during the pandemic when co-founder and CEO Moses Enenwali noticed an increase in the needs of merchants to ship parcels and cargo out of Nigeria. He had built relationships with these merchants after his time with logistics company ACE Logistics and e-commerce fulfillment provider Sendbox. Although demand was constant during his time with both companies from 2015 to 2020, this was different..

“The world was shutting down, but there was a huge demand for things and the demand for international shipping was increasing simultaneously. So I said, “this is interesting.” it was not a business then like us single it helped these people move things like a little hustle and bustle,” Enenwali told TechCrunch via call.

Globally, about 60% of air cargo is carried in the hold of passenger flights, which is one of the reasons why, to some extent, air cargo shipping is easier. to begin with that maritime cargo. For Enenwali, it made even more sense to go this route because airliners flew half empty for most of 2020. After months of iteration, Topship it launched in March 2021 with Junaid Babatunde as CTO.

Topship says it wants to create the easiest way for African companies to export and import packages and cargo for their customers, suppliers and distributors around the world.. the company and sSimilar players like Sote, SEND and OnePort365 want to improve the overall shipping experience in Africa. However, the expectations for Topship are quite high; it said in a statement that “its mission is to make the shipping experience in Africa as easy and stress-free as booking an Uber ride.” IOne factor that could work in its favor is its focus on air cargo, even as others explore a combination of air, ocean and trucking, pioneered by Flexport.

CEO Enenwali argues that while African startups, including his own, take some cues from the Flexport playbook, he doesn’t think Africa is ready for the unicorn model, which is heavy on ocean freight movement.

“The reason the Flexport model wouldn’t work here is because strongly invested in shipping and we don’t have enough ports on the mainland. For example, in Nigeria, we have a function port, and for shipping to function, we need ports, railways, and highways for road transport. But we don’t have roads and we don’t have railways,” the CEO said, giving reasons why Topship doesn’t get involved with ocean freight..

“It is difficult to connect the continent with maritime cargo. Flexport’s business model makes a lot of sense even with the way they attack problems aggressively, And I love that. But for Africa, we need to modify it to fit the use case here. So what we’ve seen is the way Connecting the continent is by air. Every major country and city on the continent has a working airport, and airlines fly to all of those airports every day.”

Topship caters to a wide range of users. From a tradesman moving tons of heavy equipment and a solo entrepreneur shipping packages to a student mailing documents to a school abroad and a Gen Z shopping at a foreign store, Topship is a local shipping solution. and international that is on the border between digital freight and electronic commerce.. Flexport has supported several African companies in both categories, such as Trella, Flextock, ShipBlu, Sendbox and Freeterium..

According to Enewali, Topship enables 1,500 merchants to move cargo and packages from Nigeria to more than 150 countries. Although it can help Nigerian merchants to receive reverse parcel deliveries, can only accept cargo deliveries from the US, UK and China.

The company’s revenue comes from selling shipping insurance and earning a margin on transactions. Enewali said the company is exploring other sources of revenue, including trade financing and customs clearance fees.. The company has posted ~50% monthly revenue growth since joining YC in January.

I think what YC does more than anything is single push it to dive as deep as possible into understanding its users,” CEO said of Topship’s revenue growth after YC. Looking to the future, much of it comes from that spirit of the user is the most important piece of the puzzle, and we have to be obsessive about it. We’re taking all the learnings and insights that we’ve learned from our users over the last five months or six months and integrate it into the product in a merchant-centric way.”

Late last year, groups of merchants from Ghana, Tanzania and Kenya invited Topship to consider launching in their respective markets. Enewali said this new funding provides Topship with pockets deep enough to go ahead and start operations there. In addition, part of the investment would improve its asset-light technology and build a proprietary global shipping infrastructure to make imports and exports significantly faster and easier, he said.

Topship has also set aside some money on fashion design and retail grants worth $3,500 each to award new and established fashion brands in Nigeria as a sign of “support for the future of the growing e-commerce sector” in the country.

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