Kobo360 Investors Sell Equity Back to Former CEO Obi Ozor Amid Struggles

Kobo360, a Nigerian freight logistics startup once hailed as Africa’s “Uber of trucks,” is facing a dramatic turn of events. Kobo360 investors have sold their equity back to its co-founder and former CEO, Obi Ozor, marking a pivotal moment in the company’s troubled journey. This development, described by many as Ozor reclaiming Kobo360 equity, comes as the eight-year-old startup struggles to recover from stalled operations, financial woes, and leadership instability.

Founded in 2017, Kobo360 aimed to revolutionize freight logistics in Africa by connecting truck owners with businesses that needed to transport goods. The platform promised to cut inefficiencies, reduce empty return trips, and make pricing more transparent, key pain points in one of Africa’s most expensive industries.

For a time, the model worked. By 2019, Kobo360 had raised $20 million in Series A funding and followed it up with $48 million in Series B funding by 2021. The company expanded into other African countries and onboarded major corporate clients like Unilever, Dangote, and DHL. At its peak, it aggregated over 50,000 trucks.

However, the company’s ambitious growth came at a cost. Kobo360 operated on a business model that required paying truck drivers upfront while waiting 30 to 90 days for manufacturers and distributors to settle invoices.

This created a cash flow gap that the company bridged using bank credit lines. But when a financial partner cut off its credit due to unserviced debt, Kobo360 found itself unable to pay drivers on time. This led to declining trip volumes and revenue, creating a downward spiral that shook investor confidence.

The challenges facing Kobo360 highlight the harsh realities of operating in Africa’s logistics sector. Unlike industries like e-commerce or fintech that benefit from low costs and strong network effects, logistics is capital-intensive and heavily reliant on credit cycles. Investors who once saw promise in digital freight platforms like Kobo360 are now skeptical about their ability to scale profitably without constant injections of external funding.

The sale of equity back to Obi Ozor underscores this shift in sentiment. Investors such as Juven (the African investment arm of Goldman Sachs), TLcom Capital, and the International Finance Corporation (IFC) had backed Kobo360 with high expectations of transforming African logistics but are now walking away from their investments. Ozor has taken on the company’s existing debt of approximately ₦10 billion as part of the deal.

Ozor had stepped down as CEO in 2023 to serve as Enugu State’s transport commissioner but has now returned to lead what many see as a last-ditch effort to revive the company. He is working with a small team of fewer than ten people and exploring traditional financing and haulage partnerships to restart operations. However, details about his turnaround plan remain unclear.

The struggles at Kobo360 are not unique within the logistics sector. Across Africa, freight tech startups have faced declining investor interest as venture capital firms shift focus from aggressive expansion to profitability.

In 2024 alone, only three African logistics startups, Renda, Fez Delivery, and Cargo Plus, raised venture capital, securing just $2.1 million collectively. High-profile companies like Lori Systems have not disclosed new funding rounds, while Sendy pivoted away from logistics before eventually shutting down.

A former employee of Kobo360 revealed that the company’s troubles began when it lost access to key customers’ accounts due to tensions with its banking partner. This loss significantly reduced trip volumes and revenue, forcing the company into survival mode. By late 2024, CEO Ciku Mugambi had resigned after just two years at the helm, leaving behind a skeletal staff.

Despite these challenges, Ozor seems determined to give Kobo360 another shot at success. Whether he can revive the company without venture capital remains an open question. For now, his focus appears to be on stabilizing operations through traditional financing methods rather than relying on external investors.

This development marks a significant chapter for Kobo360 as it navigates uncertain waters under Ozor’s renewed leadership. The story of how investors sold equity back to Obi Ozor reflects both the promise and pitfalls of Africa’s freight tech industry, a sector where big dreams often collide with harsh economic realities.

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