Investor Updates: Moroccan logistics startup Freterium raises $4m seed round

Moroccan logistics startup Freterium raises $4m seed round

Highlights

• Y Combinator-backed Freterium, a Moroccan logistics startup, closed a $4 million seed round led by Partech in December to fuel growth and serve more companies across Africa and the Middle East.
• Launched in 2020, Freterium provides a transport management software that connects shippers with the entire logistics ecosystem to collaborate in real-time, helping them cut time and shipping costs. It currently has over 20 enterprise customers and over 3,000 users.
• The startup experienced fast growth in 2021 and opened an office in the United Arab Emirates (UAE). It is now planning further expansion after securing the seed funding.

Source: TechCrunch

Our Takeaway

Across Africa and the Middle East, up to 85% of the volume of goods imported and exported is carried through established legacy partnerships between shippers and carriers, which still run with manual and inefficient tools. Freterium has built a holistic approach to solving the key challenges of the industry, and its solutions empower manufacturers, retailers, and logistics teams across the region.

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Nigeria-based Earnipay secures $4m seed investment

Highlights

• Earnipay, a financial technology solution that provides flexible and on-demand salary access to income-earners, has closed a Seed round of $4 million led by Canaan.
• Participating investors include XYZ Ventures, Village Global, Musha Ventures, Voltron Capital, Ventures Platform, and Paystack CEO Shola Akinlade.
• Targeting employees across Africa, Earnipay officially launched its operations in January 2022, having been in development and beta testing since September 2021. With the Seed funding, it will accelerate the development of its technology platform to serve large enterprise employers.

Source: TechCabal

Our Takeaway

In Africa, over 70% of the workforce is paid every 30 days. By living paycheck to paycheck, the 30-day pay cycle keeps 40% of them in an unending debt cycle as they struggle to match their income to daily expenses, emergencies, and opportunities. In addition, African businesses have historically struggled to provide solutions for employees to access daily salaries due to legacy payroll processes, lack of available cash flow, and other factors. These thus make on-demand salary access a huge opportunity in Africa, and startups like Earnipay, Workpay, and Zuberi and working to capture. 

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African startups raised $767m in debt rounds last year

Highlights

• Last year, 37 African tech startups raised a total of $767 million in 43 debt rounds, according to Partech’s report on venture capital funding in Africa 2021.
• According to the report, this indicates the rise of the debt funding class and increasing global lender confidence in the African tech ecosystem.
• Nigerian startups raised 45% or $345 million of the total amount of debt recorded, the fintech sector accounted for over 54%, and there were 34 unique debt investors, with Lendable and the IFC being some of the most active.

Source: TechCabal

Our Takeaway

While there’s no available data on how much debt financing African startups have secured over the years, 2021 did see several announcements that included debt rounds, suggesting an acceleration in serious appetite for non-equity financing. Broadly, these are signs of a maturing ecosystem as fast-growing startups in Africa’s tech industry choose to stay private longer and interest from debt investors increase.