The co-founder of a freight logistics firm, Kobo360, Mr Obi Ozor, is back at the company after he stepped down in 2023 to become the Commissioner for Transportation in Enugu State.
He has reacquired shares of the company from investors, excluding the International Finance Corporation (IFC), which reaffirmed its commitment to supporting entrepreneurs driving innovation and development in Africa, according to a mail to TechCabal, which reported the news.
Recall that earlier, Kobo360 raised about $79 million from investors, including Juven, a spinoff from Goldman Sachs, IFC, and TLcom Capital.
However, due to its business model, the organisation has struggled to remain in business, forcing its lenders to cut off credit support, which has affected its operations.
The firm has experienced cash flow issues, which have made it impossible to pay truck drivers on time, resulting into declining trip volumes and sharp decline in revenue to keep operations going.
TechCabal reported that a former employee of Kobo360 claimed that truck drivers are paid upfront but had to wait 30 to 90 days for manufacturers and distributors to settle invoices.
“Our partnership with these banks was three-way, so tensions on the bank’s side led to us losing access to our customers’ domiciled accounts. These were major clients, and losing their business significantly reduced Kobo360’s trip volume, revenue, and overall growth,” the source was said to have stated.
Kobo360 began operations in 2017 and hoped to cut inefficiencies, reduce empty return trips, and improve pricing transparency through technology by matching truck owners with businesses needing to move goods.
But these goals have not been sustained because of the challenges the company faced.
Mr Ozor later stepped down for a political appointment in Enugu State. He was replaced by Ciku Mugambi, who later stepped down last October after the company continued to struggle to remain afloat.
This may have forced Mr Ozor to return to the organisation to salvage the situation.
According to TechCabal, IFC believes the situation is not beyond repairs.
“The challenging macroeconomic environment has created headwinds for startups across emerging markets, including in the logistics sector.
“The IFC remains committed to supporting entrepreneurs driving innovation and development across the continent,” it told the news platform.