Leta, a Nairobi-based logistics startup, has secured $5 million in funding to enhance its AI-driven platform that optimizes delivery efficiency and reduces costs. By integrating with business systems and leveraging real-time data, Leta helps clients manage logistics effectively. The company aims to expand into more regions, replicating its rapid recent growth, all while adhering to sustainability principles.
African businesses incur logistics costs that are significantly higher than the global average, often up to four times more, as reported by the African Development Bank (AfDB). Given that logistics comprise 75% of product costs on the continent, these expenses elevate the prices of essential goods, including food and medicine. Moreover, many businesses continue to utilize manual logistics, resulting in inefficiencies and delays.
Nairobi-based Leta aims to address these challenges through its AI-powered logistics software-as-a-service platform. It optimizes delivery routes, tracks shipments in real-time, streamlines payment processes, and provides shipping insights, thereby enabling businesses to transport goods more efficiently and economically. The startup recently secured $5 million in seed funding to expand its operations, led by the European VC firm Speedinvest, with notable contributions from Google’s Africa Investment Fund and Equator, a climate-focused fund.
Previously, in November 2022, Leta obtained $3 million in pre-seed funding, which was allocated to enhance operations in its primary markets of Kenya, Nigeria, Uganda, Zambia, and Zimbabwe. The company’s load and route optimization technology allows clients to reduce costs and improve delivery efficiency by minimizing the number of vehicles required for distribution, as noted by Founder and CEO Nick Joshi.
Leta’s platform seamlessly integrates with businesses’ ERP, POS, and OMS systems, facilitating real-time access to live order data. This includes various details such as SKUs, product types, pricing, and customer information. Consequently, the platform determines the most suitable vehicle for each order and selects the appropriate loading method, utilizing either first-in, first-out (FIFO) or last-in, first-out (LIFO) approaches to enhance operational efficiency.
Furthermore, the platform automates the creation of manifests and dispatch planning, optimizing vehicle usage according to regional needs and truck capacity. The system, powered by AI, continuously enhances delivery routes based on real-time conditions, including potential obstacles like flooded roads or construction, as explained by Joshi: “If there’s a roundabout where trucks or motorbikes repeatedly fail to complete a turn on that route, the AI flags it as a blacklisted route.”
Real-time mapping has become an integral asset for Google as an investor in Leta, particularly due to the outdated nature of some Google Maps data in Nairobi. Joshi remarked that Leta provides a more accurate and dynamic address layout, which has caught the attention of Google. In addition, the connection of stakeholders throughout the supply chain positions financial services as a logical extension of Leta’s offerings.
Leta envisions introducing new financial solutions, including fuel cards, vehicle asset financing, and supply chain financing, to assist its partners. Deepali Nangia from Speedinvest has expressed confidence in Leta’s model, stating it “leverages logistics as a gateway and fintech as a growth driver.” The platform also enables companies to maintain delivery volumes while reducing fleet sizes, contributing to lower fuel expenses and emissions, thus attracting support from companies like Equator.
With a clientele that includes major names such as KFC and Diageo, Leta currently optimizes over 10,000 daily trips across its five key markets. The company has experienced significant growth since its previous coverage in 2022, demonstrating expansion from 500,000 deliveries to 4.5 million, increased tonnage from 20,000 to 150,000, and growth in vehicle management from 2,000 to 7,400. Consequently, its revenue, driven by a per-delivery pricing model, has increased fivefold, according to Joshi.
Looking ahead, Leta aims to double its revenue while expanding its services into additional countries across Africa and the Middle East. Unlike earlier logistics firms that relied on asset-heavy models, Leta exclusively focuses on delivering software services. By collaborating with established fleet owners rather than aggregating assets, it seeks to improve operational efficiencies in ways similar to other global logistics tech companies. Joshi notes, “The first generation of logistics startups in Africa did the hard work by educating the market and proving what’s possible.”
In summary, Leta is positioned to transform logistics in Africa by leveraging AI and software solutions to reduce transportation costs and enhance operational efficiencies. With significant funding and a rapidly growing client base, the company is set to redefine logistics by eliminating the need for asset ownership. Its approach not only supports enhanced delivery mechanisms but also aligns with sustainability goals through reduced emissions.
Original Source: techcrunch.com
