Leta, a Kenyan logistics startup, is transforming the delivery landscape by using AI to optimize logistics and reduce costs by streamlining operations. The company has raised $5 million in seed funding, backed by prominent entities like Speedinvest and Google’s Africa Investment Fund. With a robust clientele and impressive growth metrics, Leta aims to expand its services while supporting businesses in enhancing efficiency and reducing emissions.
Transportation costs in Africa can be significantly elevated, with businesses paying up to four times more than the global average, as reported by the African Development Bank (AfDB). Logistics contribute a staggering 75% of product costs, exacerbating the prices of essentials. Many companies depend on outdated manual logistics systems leading to inefficiencies and delays.
Leta, a logistics software-as-a-service provider based in Nairobi, is determined to transform this landscape. Utilizing an AI-driven platform, Leta optimizes delivery routes and tracks shipments in real time, while also streamlining payment processes and granting businesses valuable shipping insights.
Recently, Leta secured $5 million in seed funding, aimed at expanding its operations. This funding round was spearheaded by European VC firm Speedinvest and supported by Google’s Africa Investment Fund, as well as Equator, which focuses on climate tech in Africa. This follows a $3 million pre-seed investment acquired in November 2022 to bolster its presence in critical markets such as Kenya, Nigeria, Uganda, Zambia, and Zimbabwe.
The technology employed by Leta enhances load and route optimization, thus facilitating significant cost reductions. Founder and CEO Nick Joshi emphasizes the substantial impact of their system, capable of minimizing the number of vehicles necessary for distribution.
Leta’s platform seamlessly integrates with businesses’ existing ERP, POS, and OMS systems, enabling real-time utilization of current order data. Subsequently, it selects the most suitable vehicle for each delivery while optimizing loading methods based on inventory turns, either FIFO or LIFO.
Automation extends to manifest creation and dispatch planning, allowing for enhanced vehicle utilization tuned to regional demand. Joshi elaborates that the AI not only optimizes routes in real time but also continuously analyzes road conditions to avoid problematic areas.
The partnership with Google provides further benefits, as Leta’s real-time mapping capabilities surpass those of Google Maps in specific areas. According to Joshi, this collaboration is pivotal for enhancing the mapping and address structures used in logistics.
Leta’s approach also sets the stage for financial services as a natural adjunct to its software offerings. Currently, pilot products include fuel cards and financing options for vehicle procurement, catering to the operational needs of delivery partners and FMCG merchants. Deepali Nangia from Speedinvest highlighted that this integrated model unlocks substantial business opportunities.
Moreover, by optimizing fleet sizes, Leta aids businesses in reducing both fuel consumption and emissions. Joshi claims that companies can save considerable amounts, illustrating the platform’s financial efficacy.
With over 35 major clients, including renowned brands such as KFC and Diageo, Leta has achieved significant growth since its inception. The number of deliveries surged from 500,000 to 4.5 million and vehicle management increased from 2,000 to 7,400, leading to a fivefold revenue increase reported by Joshi.
As Leta looks to expand into additional regions across Africa and the Middle East, its business model distinguishes itself from earlier logistics startups. By strictly offering software solutions rather than aggregating assets, Leta collaborates with existing fleet owners. Joshi notes that their timing aligns well with market evolution, having learned from the hurdles faced by previous logistics companies in Africa.
Leta is poised to revolutionize logistics in Africa by leveraging AI technology to enhance efficiency and reduce costs. Its successful funding and growth trajectory, alongside the strategy of integrating with existing fleet partners rather than owning assets, positions it favorably within the competitive landscape. As it expands its footprint, Leta aims to continue optimizing delivery systems for major clients, driving both financial and environmental benefits for businesses across the continent.
Original Source: techcrunch.com
