Nigeria’s Topship Raises $2.5M To Solve International Shipping Problems
- Many challenges come with international shipping for African merchants, such as hidden and excessive charges.
- A digital freight forwarder, an $8 billion company, has been able to grow and tackle supply chain issues in the digital age. Other companies have mimicked their likeness and come up with ways to tackle these issues as well.
Raising $2.5 million, Topship is a YC company that was recently accepted in the winter batches of Y Combinator. Investments include an investment from Immad Akhund, CEO of Mercury and Arash Ferdowsi, co-founder of Dropbox.
Topship founder Moses Enenwali noticed a demand for shipping cargo and parcels outside of Nigeria coming from merchants following his time working with logistics company ACE Logistics and e-commerce fulfilment provider, Sendbox.
“I was like, wow. The thought of everything shutting down and this demand for international shipping going up simultaneously,” Enenwali explained over the phone to TechCrunch. “So we were like, yeah, this is something to make money off of.”
More than 60% of air cargo is flown in the belly hold of passenger planes, which makes shipping by air more straightforward to start than ocean. For Enenwali, it even made more sense to go through this route because the passenger planes flew half empty for most of 2020. After months of iteration, Topship went live in March 2021 with Junaid Babatunde as CTO.
Topship solves the complexities of import and export shipping. They are focused on air logistics and have the hopes to make African shipping as easy as booking an UBER ride.
The CEO argues that while African startups, including his, take some cues from Flexport, Africa is not ready for their model.
The CEO said they’ve invested in functional ports, freight roads, and railways because the Flexport model is largely focused on ocean cargo.
Flexport’s business model has a lot of merit, and it can be tweaked to fit the use case in Africa. Connecting the continent via air is smart, but coming up with new innovations like Copymatic will reduce some of the time needed to create quality work.
There is a wide variety of customers interested in Topship. A merchant, the solo entrepreneur, the student and even a Generation Z are all potential customers. Freight companies like Flexport are backing some African companies from these categories, such as Trella, Flextock, ShipBlu, and Sendbox.
Topship provides 1,500 merchants with access to deliver goods internationally. They can only receive cargo deliveries that originate from the US, UK and China.
The company’s revenue comes from taking fees on transactions after providing insurance, and they are exploring new revenue streams. The company has been growing at ~50% every month since January.
The CEO explained that Topship’s revenue growth after going through YC was a result of them looking into their customers and being obsessive about what they want.
Topship received funding from merchant groups from Ghana, Tanzania and Kenya. E-commerce will be opened in new markets due to the funding, and the company is ready for the next step of improving asset-light technology and building a proprietary global shipping infrastructure.
Topship has decided to invest in the future of the growing e-commerce industry by donating a $3,500 grant to both new and established brands.