Jetstream Africa, a Ghanaian technology company operating in the logistics sector, has raised US$13million in equity and debt-funded pre-Series A. The equity round saw participation from French development institution PROPARCO through the Digital Africa Bridge Fund; ASC VC, a venture fund founded by executives of the supply chain visibility platform Project44; Nigerian venture capital fund Octerra; Senegal’s Wuri Ventures; Seed9, a syndicate founded by Google alumni; the MBA Fund; the W Fund; and family offices.
Existing investors like Alitheia, IDF and Golden Palm doubled down on their investment in the equity round. Fintech lender Cauris was the sole investor in the debt round. Miishe Addy, Jetstream’s CEO, told TechCabal that investors were selected based on their investment or operational experience in the logistics sector.
“All of our major investors have investment or operational experience with the problem we’re solving. They are specialists in supply chain technology like ASCVC, which was founded by Project44 executives; or African value chain and logistics portfolio companies like Alitheia, Golden Palm, Octerra, Wuri, and Proparco,” she told TechCabal via text.
Jetstream’s platform offers an avenue for exporters and importers to apply for trade finance, book shipments, and insure their goods in a fraction of the time it would take them to coordinate those transactions individually with fragmented vendors. The company aims to enable its customers to make better decisions by aggregating the fragmented financing and logistics vendors that support trade across the continent’s 54 countries.
The company’s business model is based on providing standalone logistics services such as air, ocean and ground transportation, Customs clearance, pickup, delivery and handling for a fee. The company also provides financing for its customers by paying all the customers’ vendors as a loan to the customer, which will be repaid by the customer 90 days after the shipment.
The credit option is available to exporters as purchase order financing – which means that Jetstream will cover the cost of buying inputs and fulfilling purchase orders, and logistics vendors are paid by Jetstream as a loan to the exporter. For importers, an invoice financing option is available whereby Jetstream will cover the cost of importing goods, including freight, Customs duties and delivery charges paid by Jetstream as a loan to the importer.
The funds from the pre-Series A round will be used to support Jetstream’s expansion into new countries and the continued development of its technology platform. Last August, Addy told TechCabal that the company was looking toward francophone Africa to mitigate the effects of Ghana’s turbulent inflation because the CFA is pegged to the Euro.
Addy reiterated this desire to expand to francophone Africa, adding that Jetstream has partnered with a francophone last-mile e-logistics player to establish a presence; and by end of the first quarter, the company should have expanded into the region.
She also added that Jetstream has partnered with several other key players, such as multinational banks like Societe Generale, pan-African e-insurance broker LAMI, and cross-border payments operator MFS Africa to establish itself as “the digital integrator of all the resources its customers need to grow their supply chains”.
“Our partnerships with banks and debt investors enable trade finance, and our partnerships with e-insurance brokers enable us to provide insurance to shippers. The partnership with MFS Africa enables cross-border payment to logistics vendors outside our customer’s home country, and our last-mile logistics partnerships enable seamless pick-up and delivery from the port to the customer’s doorstep,” she told TechCabal.
Ghana’s economy has seen better days – the inflation rate has been climbing for 18 straight months and reached 50.3% in November 2022. The previous month, October, saw a 40.4% inflation rate. This soaring rate has led to the cedi earning the unwanted title of ‘second worst-performing currency in the world’, according to Bloomberg.
Addy told TechCabal that to cushion the effects of inflation, Jetstream has strategic partnerships with three Ghanaian banks. Through these partnerships, the company deposits guarantees in dollars and the banks lend to Jetstream customers in cedis at a fixed interest rate. “This arrangement comes at a cost, but it has preserved a positive margin for our business,” Addy told TechCabal.
The company also offers short-term loans, with a maximum term of 90 days, which are repriced based on the reference and FX rates at maturity.
According to Addy, Jetstream has grown its active pre-financed logistics customers by 102% in the last year and seen revenue grow by 48%. She also added that the company has achieved product-market fit and a doubling of gross margins with the addition of a trade finance and logistics bundle in 2022, even after accounting for depreciation. The CEO also shared that the credit aspect of the business has grown – up to 50 loans per month, and Jetstream went months with a zero percent default rate and is now at 2%.
Speaking on the investment, Tokunboh Ishmael – co-founder and principal partner at Alitheia IDF, said in a statement: “This round of funding supports Jetstream’s expansion to new markets which capitalise on trade policies like AfCFTA, enabling the richer inter-continental trade needed to support inclusive economic development and unleashing the continent’s full potential. Alitheia IDF is proud to work with this visionary company on ushering in a bold new future for Africa”.