Ghana’s Logistics Startup Jetstream Secures $13 Million Pre-Series A Funding In Equity And Debt

Ghanaian logistics startup Jetstream Africa has secured $13 million in equity and debt in a pre-Series A funding round that saw the participation of equity investors like Seed9, Wuri Ventures, Octerra, The MBS Fund, Proparco, ASCVC, Project44, Golden Palm and IDF. Fintech lender and private equity firm Cauris provided the debt financing. The pre-Series A round follows the company’s seed round held 18 months ago, which saw Jetstream raise $3 million in equity and debt. 

The latest funding round will be used by the startup to expand into new countries, and develop its technology platform which aggregates fragmented logistics and financing vendors in the African trade space. Jetstream Africa is currently in 29 markets worldwide and 12 in Africa. 

Founded in 2018, the startup had two business lines as of the time it secured its seed funding. The first provided logistics services to cargo owners whose businesses involve import and export. The other provided financing to freight forwarders. Recently, the startup has merged both products to serve only cargo owners. According to Jetstream‘s CEO Miishe Addy, “Running those two lines side by side, we observed that the import or export business controls the supply chain,” she said on the pivot. “Although the cargo owners and freight forwarders have a lot of information asymmetry, the importer and exporter can pressure the freight forwarder to digitize the supply chain. We simplified our business into just the import-export product line by directly using trade financing and logistics.”

Under its new business model, Jetstream has shifted to a freight forwarder. It now provides end-to-end movement of shippers’ cargo, both import and export. The startup charges a fee and provides financing to those that need it. 

For cargo owners looking to get a loan from a traditional bank, the process is to get a letter of credit from their bank and this is usually time-consuming and takes several weeks. Also, the bank may or may not provide this letter of credit. Jetstream provides faster credit, out-beating the inefficient and time-consuming letter of credit system. But how does the startup achieve this?

According to Jetstream’s CEO, the startup takes a security interest in the cargo, and instead of handling the letter of credit itself, the startup underwrites loans through its banking partners and disburses the loan proceeds to the various vendors in the supply chain. These loans are to be repaid between 15 and 90 days. 

According to the startup’s co-founder and COO, Solomon Torgbor, “If you’re importing 10 containers, in addition to paying for the actual good, importers have to pay the shipping line, customs broker on both sides, truck drivers on both sides, you have to pay a warehouse operator in some cases or container terminal. There’s a minimum of nine different vendors you have to pay. And when someone applies for a Jetstream loan, they’re not just saying give me $50,000 but enough money to fund this entire shipment and pay these nine vendors. Also, we don’t give the money to the cargo owners but to the nine vendors directly.”

Since it started, the startup has disbursed $9 million in loans and is set to increase this amount five times before the end of the year. It has also grown from disbursing just one loan per month to up to fifty after changing its business model; it has become EBITDA positive. Jetstream has also seen its revenue increase by 48 percent and active customers increased by 102 percent in the last year.