Lori Systems Raises $2M at Deep Discount Amid Logistics Pivot

STARTUP VENTURE CAPITALApril 21, 2025 at 6:52 PM UTC

TLDR

Kenyan logistics startup Lori Systems raised $2 million in a bridge round at a $5 million valuation, sharply down from its 2020 peak of $120 million
The round, led by Delta40 and joined by Future Africa, FP Capital, and others, brings Lori’s total funding to over $46 million
The valuation drop reflects both sector-wide investor caution and Lori’s underperformance against earlier growth expectations

Kenyan logistics startup Lori Systems raised $2 million in a bridge round at a $5 million valuation, sharply down from its 2020 peak of $120 million. The round, led by Delta40 and joined by Future Africa, FP Capital, and others, brings Lori’s total funding to over $46 million.

The valuation drop reflects both sector-wide investor caution and Lori’s underperformance against earlier growth expectations. CEO Jean-Claude Homawoo says Lori is focused on profitability, a milestone he claims will unlock bank lending and long-term sustainability.

Founded in 2016, Lori built a digital freight platform connecting cargo owners to transporters. But cashflow challenges, worsened by slow customer payments, strained its working capital. The company is now experimenting with a new financing model in which banks fund upfront trucking costs, removing liabilities from Lori’s balance sheet but reducing its margins. Lori now operates in Kenya, Nigeria, and Uganda.

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Key Takeaways

Lori Systems’ down round underscores broader challenges in Africa’s logistics tech sector, where optimism about asset-light models has run into operational cashflow constraints. As with rivals Kobo360 and Sendy, Lori’s model of paying transporters upfront while receiving delayed payments from enterprise customers has proven hard to sustain without bank credit or investor funding. To survive, Lori is partnering with banks like Ecobank to create invoice financing structures. Under this model, banks provide upfront capital to drivers and recoup payments directly from cargo owners, charging interest in the range of 8%–24% per year. While it eases Lori’s capital pressure, this raises transport costs for cargo owners, who already operate on tight margins. As banks take over the working capital burden, Lori is repositioning itself as a tech-enabled logistics orchestrator, focusing on route optimization, AI matching of front and back hauls, and potentially electrified fleets to reduce per-kilometre costs. But competing on price remains difficult. Lori’s path forward may depend less on margins and more on execution, financing discipline, and regulatory partnerships that bring financing and logistics closer together, crucial for scaling in a market expected to reach $180 billion in value across Africa.

Venture Capital

Startups

Lori Systems

Logistics

Kenya