Fleet management techies dominate March financing

From the newsletter

Kenya-based mobility startup Leta raised $5 million seed investment from Speedinvest, Google and Equator VC in March, the highest in Africa. Founded by Nick Joshi, it leverages AI to optimize deliveries. This is telling, as fleet management firms have become kings of raising money. It is what connects four of the five startups that raised money in March.  

• Fleet management software is increasingly playing a crucial role in optimizing the operations of EV fleets. For instance, EV-specific fleet management tools track battery performance, ensuring optimal charging cycles and identifying potential issues to extend battery life.

• They also help schedule charging sessions, manage energy consumption, and integrate with various charging providers. This ensures vehicles are charged efficiently and ready for use. Fleet management software provides real-time insights into vehicle location, battery levels, and energy use, helping to streamline routes and minimize downtime.

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• Another Kenyan firm Solutech, also raised cash in March, receiving a grant of $200,000. The startup has an all-male team of four founders namely Alexander Odhiambo, Rayyidh Bayusuf, Mutie Mule, Jinal Savla. It has software that optimize delivery routes, improve fleet efficiency and simplify order management.

• Clement Owusu-Donkor, the founder of Ghanaian shipping and logistics company Aquantuo who schooled at Wilmington University in the US, is another entrepreneur leveraging technology to provide end-to-end logistics and related services. The information systems engineer has previously worked at Exelon, Pepco Holdings, Planet and Windstream. In March, he raised a grant of $100,000.  

• Wahlied Cole is the founder of ScootHero, a South African company that provides end-to-end electric mobility solutions for fleet managers and last-mile delivery drivers. The fleet management company, which raised $200,000 in a venture round, offers a number of services, including sourcing EVs, offering financing options, managing charging infrastructure, and providing carbon credit support.

• Another startup that raised money in March is Ecowaka, a Nigerian EV firm specializing in three-wheelers and battery swapping stations. The company was founded by Prince Ojeabulu, who studied at the Federal University of Technology Owerri, Nigeria. Ecowaka raised $200,000 in a venture round to scale its operations.

• In total, the continent’s mobility startups raised $5.7 million in March, which is just a fraction of the $39 million that the sector secured in February. Eastern Africa bagged the vast majority of this funding, getting a total of $5.2 million mainly by Leta. Western and Southern Africa followed with $0.3 million and $0.2 million respectively.

• Mobility entrepreneurs will be hoping that funding activity will rebound in April amid a tough global economic environment. Africa’s mobility startups have traditionally faced scalability issues due to insufficient funding.   

Our take

• While Eastern Africa, particularly Kenya, captured the lion's share of funding in March, other regions like North, West and Southern Africa could attract attention as startups expand operations and demonstrate scalability in diverse markets.

• The US has cut billions of dollars in donor funding to Africa, which will significantly affect the ability of some startups on the continent to get grants. However, this offers an opportunity for regions like the EU, the Middle East and Asia to increase their investments in promising African startups. 

• Tech-based mobility startups are getting disproportionately high investment compared to brick-and-mortar firms. This is despite the latter showing significant growth potential which is constrained by a lack of capital. Investors should try to diversify their investments beyond tech-based startups.