Nigerian digital freight startup, Topship has raised $2.5 million in seed funding. The funding round was led by Flexport and it had participation from other investors which include Y Combinator, Olive Tree Capital, Capital X and True Capital.
According to an announcement by the startup, the new raise will be instrumental in its expansion drive. This comes only a few months after the company graduated from the YC winter cohort.
Topship allows merchants to move a large number of items as well as help people with their shipping needs. It might be as simple as a student sending documents and shopping online.
According to the CEO and Co-Founder Moses Enenwali, the firm has helped over 1500 Nigerian merchants, distribute their products in 150 countries. On it, Nigerian merchants can only receive parcels and cargo deliveries from the United States, the United Kingdom, and China.
Topship was founded in 2020 after the CEO noticed an increase in the demand for international shipping by Nigerian merchants, particularly during the COVID- 19 pandemic. Having worked with ACE Logistics and Sendbox, two distinct shipping firms, Enenwali became intrigued by the importance of a good shipping process. This led to the founding of the company in March 2021.
As reported by TechCrunch. Enenwali observed that air cargo is a better alternative for starting a freighting company than ocean cargo since it is easier and faster to move more items, which is advantageous for merchants.
This is no reflection on the leading freight company, Flexport, which focuses primarily on ocean cargo shipping, as CEO Enenwali argues that African startups aren’t ready for that type of model, necessitating the need to tweak the system as airports are unavoidably present in every country and continent.
… in Nigeria, we have one function port, and for ocean freight to work, we need ports, railways, and roads for trucking. But we don’t have the roads, and we don’t have the railways.Topship CEO tells TechCrunch in a report.
The company generates revenue by selling shipping insurance and receiving a commission on each transaction. Moses told TechCrunch that the company is currently searching for new revenue streams, such as trade financing and customs processing fees.
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