Leta, a Kenyan logistics startup, has developed an AI-powered platform to optimize delivery routes and streamline logistics, significantly reducing costs for businesses. The firm recently raised $5 million in seed funding, led by Speedinvest and Google’s Africa Investment Fund, to expand operations across Africa. By integrating financial services with its logistics solutions, Leta aims to improve the efficiency of shipping processes while partnering with existing fleet owners rather than relying on asset ownership.
The costs of logistics in Africa are significantly higher compared to global standards, with businesses paying up to four times the average for transport. According to the African Development Bank, logistics account for 75% of product costs, hampering affordability for vital goods such as food and medicine. Many enterprises still depend on outdated manual logistics processes, leading to inefficiencies.
Nairobi’s Leta aims to transform the logistics landscape through its advanced AI-powered software platform. This solution optimizes delivery routes, enables real-time shipment tracking, streamlines payment processes, and offers valuable shipping insights. Recently, Leta secured $5 million in seed funding to enhance its operations across Africa, with contributions from Speedinvest and Google’s Africa Investment Fund.
Previously, in November 2022, Leta had garnered $3 million during its pre-seed funding round to strengthen its presence in five key African markets: Kenya, Nigeria, Uganda, Zambia, and Zimbabwe. Founder and CEO Nick Joshi highlights that the platform’s load and route optimization technology significantly reduces costs and enhances delivery efficiency by minimizing the number of vehicles required.
Leta’s system integrates with existing business platforms such as ERP, POS, and OMS to gather live information on orders, including SKU details and customer data. The software then selects the optimal vehicle for each delivery, employing FIFO (first-in, first-out) or LIFO (last-in, first-out) loading methods to replace conventional, less efficient dispatch practices.
Automating the manifest creation and dispatch process, Leta’s AI technology also adapts delivery routes in real-time based on continuous updates related to road conditions or delays. For instance, if a particular route presents recurring challenges, such as construction or roadblocks, the system will mark it as a restricted route.
This real-time mapping functionality has proven advantageous to Google, which seeks to augment its existing mapping technology. Joshi noted that while Google Maps has not seen updates for certain Nairobi areas since 2022, Leta’s platform consistently enhances road and address accuracy based on live customer data.
Further, Joshi envisions integrating financial services within Leta’s operations. Current pilots include initiatives such as fuel cards, vehicle financing, and supply chain financing for fast-moving consumer goods merchants. Speedinvest’s Deepali Nangia emphasizes the strategic significance of supporting Leta for its dual focus on logistics and fintech, unlocking new avenues for growth.
Leta also aids companies in reducing their fleet sizes while maintaining delivery efficacy, leading to lower fuel expenditure and environmental impact. Joshi asserts that a company with 70 vehicles could potentially save up to $30,000 monthly using Leta’s platform.
Currently, Leta collaborates with over 35 major businesses, including renowned brands like KFC and Diageo, facilitating upwards of 10,000 trips daily across its operational markets. The startup has experienced exponential growth since its last funding, increasing deliveries from 500,000 to 4.5 million, and significantly scaling tonnage and vehicle management, translating into a revenue increase of five times.
Leta’s objective is to double its revenue as it seeks to expand further into additional regions in Africa and the Middle East. Unlike previous logistics ventures that adopted asset-heavy models, Leta strictly focuses on providing software solutions, thereby partnering with existing fleet owners to improve their operational efficiency. This strategic direction aligns with successful models employed by global logistics tech firms strategically bypassing asset ownership.
In summary, Leta is positioned as a transformative player in the African logistics sector, leveraging artificial intelligence to optimize delivery and cut operational costs. Recent funding will allow it to scale its software solutions, fostering greater efficiency across shipping processes. With its focus on integration and partnerships, Leta is successfully navigating the logistics landscape, an approach that contrasts with earlier asset-heavy business models. The company is now on a growth trajectory, seeking to expand into new markets and achieve its ambitious revenue goals.
Original Source: techcrunch.com
