Andile Masuku

The current travails of Y Combinator-backed Nigerian logistics tech startup Kobo360 provide a sobering backdrop to this week's Tech Tides Africa column hijack.

The numerous reported challenges dogging the former ecosystem darling - which apparently include a crippling debt load, revolving door of key leadership and overwhelming operational issues - put into sharp focus why tech entrepreneurship in Africa's critically sub-optimal freight haulage industry is not for the faint of heart.

Meet Gugulethu Siso

Yet, it's a space inhabited by the fiercely resolute Zimbabwean founder and passionate intra-African trade proponent Gugulethu Siso since launching her logistics tech startup Thumeza in 2018. (Say, if you really want to see her truly come alive, ask for her unfiltered take on the African Continental Free Trade Area’s (AfCFTA) potential to unlock economic opportunity.)

Following various survival-focused iterations, Thumeza's current fintech proposition revolves around revolutionising access to financing for small-scale transporters in Africa's supply chain sector.

According to Siso, transporters supported by Thumeza have secured contracts with major industry names such as Lori Systems, Pick n Pay, Value Logistics, Spar, Skynet, Cipla, and South 32.In today's column, she offers a rare perspective on survival, adaptation, and, more often than not, failure, in one of Africa's most relationship-driven industries. Her experience spans multiple African markets—from Zimbabwe to South Africa, Botswana, Kenya to Uganda. It includes what went into securing partnerships with major industry players like Lori Systems and serves as a real-talk primer for any founders contemplating following in the footsteps of many a logistics tech founder either holding on for dear life, or who have not survived long enough to reflect on what sustainable business progress looks like.

Siso’s insights. In her words:

Building a startup in Africa is an exercise in survival, where entrepreneurs pivot not out of strategy but necessity. Nowhere is this more evident than in logistics, where well-intentioned founders launch into the sector, believing they can disrupt the industry, only to find themselves caught in an inevitable cycle: logistics marketplace, software provider, fintech lender, and, for many, eventual closure. Having lived through this cycle, I've seen firsthand how promising businesses fail due to the brutal realities of operating in African markets.

Relationship reality check

When I founded Thumeza, it began as a logistics marketplace. The idea was simple: connect small-scale transporters with cargo owners while we held the end contract. On paper, it looked like a solid business model. In reality, the logistics industry in Africa isn't built for disruption, it's built on relationships. Deals aren't made through an online matching algorithm, they're sealed in golf club lounges and restaurant bars. I've lost out on opportunities simply because I wasn't in the right circles. More than once, I've only heard about critical networking events, like a golfing weekend, months after they happened. By which time, of course, contracts had already been allocated, and I was left fighting over the scraps.

Payment purgatory

After overcoming countless obstacles and securing a contract with a well-known organisation (who I shall not name and shame because I don't want to close that door forever), I was left waiting on invoices that took up to 180 days to be paid. There was simply no justification for such extreme payment delays. Without insider knowledge and facing almost sadistic payment timelines, we were at a loss. I remember a call with a then-executive at Kobo360, after I outlined our challenges, they bluntly stated that without access to the right networks and the working capital to support it, scaling would be impossible. It was a hard truth we couldn't ignore.

So, we pivoted. We thought, "Maybe the problem isn't logistics itself but the inefficiencies in managing transport operations." That led us to software development. However, another harsh truth emerged: logistics in Africa is not a software-first industry. Companies still rely on outdated ERP systems that break down frequently, but they don't see the need to change because these systems are embedded in their workflows. Selling logistics software to people who don't want to buy software was a losing battle.

False fintech promise

An extremely short stint as a software provider (truly less than a financial quarter later) then led us to fintech lending in 2021. The business logic was sound: transporters struggle with cash flow constraints, which we were intimately aware of. They need working capital to keep their trucks on the road, and we could provide that. What we didn't fully grasp was that fintech lending is an entirely different beast.

Your biggest question in lending is always: Can I get my money back? I remember someone in a boardroom once asking me as we were setting up Thumeza Fintech, "If you weren't you, would you lend yourself money?" The painful yet honest answer at the time? No. Yet, we were now in the business of doing exactly that, lending money to transporters whose financial instability had driven us to pivot in the first place.

Network alchemy

From 2021 to 2023, we pursued this model and tested various hypotheses, including invoice financing. That experiment, while delivering great top line revenues, was a nightmare cash flow wise. During this phase, we witnessed all forms of scenarios, from trucks having breakdowns to truck owners taking funds meant for operations to purchase their spouses brand new cars. However, despite the struggles, we saw some success, expanding into South Africa and serving clients in Botswana, Kenya, and Uganda. These successes were due to a lesson we'd learned the hard way: leverage the networks you have, shamelessly. Conversations that had taken 6 months now took place over one evening through a quick, casual WhatsApp call by simply asking for help and connections.

At Thumeza, we've survived by turning hard lessons into strategy. We shifted our focus to receivables financing through early invoice settlement, enabling us to disburse and collect funds in a secure, structured manner. Our collection mechanisms are as close to airtight as possible, backed by strong relationships with cargo owners, stringent cession agreements, and worst-case protocols. Needless to say, our legal team is one of our most critical stakeholders.

Same sad pattern

However, as I continued on this journey, I noticed a pattern. Many logistics startups were following the same trajectory: marketplace, software, lending, closure. All too often, what launches as a promising startup becomes yet another failure statistic.

There are several reasons why this happens: Unit economics don't work when profitability takes a backseat to growth; investors - especially those outside Africa - expect the same scalability they see in Western markets; founders focus on fundraising, not sustainability; and relationships matter more than technology - in African logistics, deals are built on trust, not automated systems.

Founder reality check

Some advice for founders navigating this space: understand your market deeply - don't assume what works in your market will work elsewhere in Africa; cash flow is king - if your business model doesn't address cash flow constraints, you're in trouble; build trust with industry players before trying to disrupt them; and know when to pivot—realising that not every pivot is a step forward; sometimes, it's a sign to re-evaluate literally everything.

Breaking cycles

So, what's next for Thumeza? Glad you asked. We are building a business pipeline that not only ensures liquidity but also makes us an attractive candidate for micro-acquisition. Our exit is likely to be driven by active volumes and strong partnerships rather than traditional funding. But we know better than to assume the journey will be linear. In African startups, the only certainty is uncertainty.

Unfortunately, many logistics startups will continue to follow this predictable death spiral. But those who can break the cycle—by understanding their market, prioritising sustainability over hype, and navigating the complexities of cash flow—stand a chance of building something that lasts. And maybe, just maybe, they won't have to pivot one last time… into closure.