
Hillhouse, Crystal Stream invest African logistics start-up
Lori Systems, one of Africa’s largest logistics coordination platforms, has raised almost $30 million in a Series A round led by Hillhouse Capital and Crystal Stream Capital.
Other investors include Apoletto Asia, EchoVC Partners, Timon Capital, Raba VC, and Endeavor Catalyst. Crystal Stream was one of the first Chinese venture capital firms to enter Africa. It was active in the region as recently as August, with participation in an early-stage round for Nigerian public transportation app Gona.
Launched in May 2017, Lori Systems, which is described as "Uber of trucks," connects cargo owners with truck drivers, with a view to cutting the high transport costs associated with Africa. It is estimated that transport costs accounts for 75% of the price of products in Africa, compared to 6% in the US.
Lori claims to have cut the transportation cost for agricultural products by 17% for truckers in the past two years, while increasing the utilization rate of trucks and incomes for drivers. It also claims to leverage internet technology to provide real-time information to the transportation market.
Lori launched its service in Kenya, moving quickly into Uganda. It now has operations in nine countries, including Rwanda, Ethiopia, South Sudan and Congo in East Africa, as well as Nigeria and Ghana in West Africa. The core team comprises local entrepreneurs educated overseas. It now has 170 people with executives coming from Barclays, J.P. Morgan, Boston Consulting Group, McKinsey & Company, Google, Amazon, FedEx, and TNT.
"As one of China's earliest funds entering the African market, we have conducted research through field visits. High-speed economic growth and demographic growth as well as booming mobile internet has led to the best timing to invest in Africa," said Mengqiu Wang, founding partner of Crystal Stream. "We believe that internet infrastructure such as logistics platforms will be a cornerstone of business development In Africa."
In Nigeria, the continent's most populous country, Kobo360 raised $30 million in debt and equity earlier this year from Goldman Sachs to pursue a similar strategy. Another African company that has attracted Chinese investors is OPay. The payment arm of Opera raised $50 million from the likes of IDG Capital, Source Code Capital, Sequoia Capital China, Meituan-Dianping and GSR Ventures.
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