Baobab Insights publish market data on VC trends in the mobility, transport and logistics sector in Africa

Investment continues to flow into transport and logistics, with on-demand mobility making waves in the sector

In July of this year, the Baobab Insights research team published a market briefing looking at VC trends in the mobility space in Africa.

Some of the key learnings, trends and companies are shared here:

In terms of funding into transport and logistics companies, there has been an increase from $6.24 million across 17 deals in 2015 to $218.742 across 69 deals in 2019, peaking in 2018. Among these investment transactions, on-demand mobility start-ups have been an increasingly significant benefactor, attracting $112.216 million USD in 2019 across 29 deals.

On-demand mobility is now becoming a more saturated market, having only been a relatively nascent space just a few years ago. There are now a total of 89 active on- demand services in operation across Africa. This combined with an increase in later rounds of funding such as Series B-C indicates a more mature marketplace.

Urbanisation and wider product opportunities is driving the growth of on-demand mobility

With 41% of sub-Saharan Africa’s population estimated to live in urban areas, it is no wonder why we have seen significant innovation in the on-demand mobility space. However, on-demand mobility solutions also help to formalise the transport sector, traditionally an informal operation, by providing visibility and tax collection to local governments and offer a medium to extend other important services such as insurance and digital banking.

In a recent interview with Baobab Insights, Kennedy Mubita, the Africa Head at SC Ventures explains; “Thematically, the logistics space is receiving a lot of [investor] interest because they are necessary to support growing demand for commodities, food and consumables needed to meet population growth. FinTech solving problems within the logistics space will gain traction as this sector grows.”

This mutually beneficial relationship between FinTech’s the transport and logistics sector was referenced by Llew Classen, Managing Director of Newtown Partners, in a recent interview with Baobab Insights. “FinTech solutions are more easily diversified into other products and service categories. FinTech solutions in the supply-chain space are creating more opportunity for stakeholders to operate in parts of the value chain that they were not able to before.”

So, who are the players you should keep your eyes on in the space?

Here are Baobab Insights 10 hot picks:

(Start-up websites: Max.ng, Catch Taxi, Swvl, Weego, GoDropping, Gozem, Intigo, Halan, Vite, QuickBus)

What can the on-demand mobility space expect to see next?

When speaking with Jack Rumble, Head of Research at Baobab Insights, he remarked that “We are starting to see some larger silicon-valley backed companies like Uber and Bolt, as well as local founded companies like SafeBoda begin to cement their position in key strategic markets. This is starting to play out in local pricing battles which may make it harder for new entrants to gain traction. However, we anticipate that increasingly founders may turn the attention to other supporting services such as driver insurance and innovative payment models.”

Figure 1: Total number of deals closed by transport and logistics technology companies since 2015
Figure 2: Total number of deals by type to on-demand mobility solutions in Africa

About Baobab

Baobab Insights provides Data and Insights on Africa’s Venture Capital Markets.

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The information contained in this publication is derived from carefully selected public sources and proprietary data we believe are reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does not necessarily reflect the opinion of Baobab Insights or The Baobab Network. The opinions presented are subject to change without notice. The Baobab Network accepts no responsibility for any liability arising from the use of this document or its contents. Baobab Insights and The Baobab Network does not consider itself to undertake Regulated Activities as defined in Section 22 of the Financial Services and Markets Act 2000 and is not registered with the Financial Services Authority of the UK.

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