Leta, a logistics startup based in Nairobi, has secured $5 million in funding to enhance its AI-driven logistics platform, which aims to reduce transportation costs and increase efficiency across Africa. The company integrates with existing business systems to streamline delivery processes. It currently supports major brands like KFC and Diageo, experiencing significant growth in deliveries and revenues since its previous funding round. Leta’s focus on software rather than asset ownership distinguishes it in the competitive landscape of logistics.
In Africa, transportation costs can be up to four times higher than the global average, contributing significantly to high prices for essential goods. Logistics account for 75% of product costs, as reported by the African Development Bank (AfDB). Many businesses rely on outdated manual logistics systems, causing unnecessary delays. However, Nairobi-based Leta aims to transform this landscape with its innovative AI-powered logistics platform.
Leta recently secured $5 million in seed funding to expand its solution, which optimizes delivery processes, facilitates real-time shipment tracking, streamlines payment systems, and offers valuable shipping insights. The funding round was led by European VC firm Speedinvest, with additional support from Google’s Africa Investment Fund and Equator, a climate tech fund focused on Africa. Previously, in November 2022, Leta had raised $3 million in pre-seed funding to enhance its operations in Kenya, Nigeria, Uganda, Zambia, and Zimbabwe.
Leta’s technology enhances efficiency and reduces costs by optimizing load and route management, thereby minimizing the number of vehicles needed for distribution. According to Founder and CEO Nick Joshi, the platform seamlessly integrates with existing ERP, POS, and OMS systems, enabling it to utilize live order data such as SKUs and customer details for better decision-making in logistics.
The platform automates tasks such as manifest creation and dispatch planning while deciding whether to use FIFO (first-in, first-out) or LIFO (last-in, first-out) methods. Through AI, the platform also optimizes delivery routes in real-time, adjusting for issues such as road construction or adverse weather conditions. Joshi highlights its capability to dynamically update its mapping based on frequent customer deliveries, which superiorly enhances navigation and logistics management.
Leta’s real-time mapping capabilities are particularly valuable to Google, which remains one of its key investors. Joshi notes that Google Maps has not updated some parts of Nairobi since 2022, whereas Leta’s system continuously enhances its road data. The integrated nature of Leta’s platform fosters a connection among supply chain stakeholders, enabling potential financial services expansions such as fuel cards and supply chain financing products.
Speedinvest’s Deepali Nangia underscores the importance of Leta’s model, stating that it unlocks new business opportunities by combining logistics and financial technology. Leta also aims to significantly reduce fleet sizes without compromising delivery efficiency, thus lowering fuel consumption and emissions—pursuing a goal that has garnered support from Equator. For example, a company operating 70 trucks could save approximately $30,000 each month using Leta’s services, with plans to eventually track carbon emissions as well.
Currently, Leta supports over 35 major businesses, including well-known brands such as KFC and Diageo, managing over 10,000 daily trips across five countries. Since its previous coverage, Leta’s performance metrics have surged: deliveries increased from 500,000 to 4.5 million, and the volume of goods handled rose from 20,000 tons to 150,000 tons. The number of vehicles managed jumped from 2,000 to 7,400, leading to a fivefold increase in revenues for Leta.
Looking ahead, Leta plans to expand further throughout Africa and the Middle East, aiming to double its revenue. Unlike other logistics startups focusing on asset ownership, Leta focuses solely on software solutions. This approach parallels early global logistics companies, offering a model that empowers existing fleet owners rather than competing with them. Joshi asserts that by understanding market needs, Leta can navigate existing challenges and capitalize on opportunities more effectively than predecessors in the logistics sector.
In summary, Leta is positioning itself as a leader in transforming logistics in Africa by utilizing AI technology to streamline operations and reduce costs. With significant backing from major investors like Speedinvest and Google, the firm aims to facilitate smoother logistics management while addressing climate considerations. As it continues to grow and expand its services, Leta demonstrates a promising approach by avoiding asset ownership and focusing on software solutions, setting a new standard for logistics startups on the continent.
Original Source: techcrunch.com
