Leta Secures Funding to Revolutionize Logistics with AI | Kenya

High Logistics Costs in Africa and Leta's Solution

Businesses operating within Africa frequently encounter transportation expenses that are up to four times higher than the global average. This significantly impacts the cost of essential goods, including food and medicine.

According to the African Development Bank (AfDB), logistics account for a substantial 75% of the total product costs incurred on the continent.

A significant number of these businesses still depend on manual logistics processes, which often result in considerable delays.

Leta: An AI-Powered Logistics Platform

Leta, a logistics software-as-a-service provider headquartered in Nairobi, is focused on addressing these challenges. Their AI-powered platform is designed to revolutionize delivery operations.

The platform offers features such as optimized delivery routes, real-time shipment tracking, streamlined payment processing, and valuable shipping insights for businesses.

Recent Funding and Expansion

The startup has successfully secured $5 million in seed funding to facilitate the expansion of its innovative solution.

This funding round was led by Speedinvest, a European venture capital firm, with additional investment from Google’s Africa Investment Fund and Equator, a fund specializing in Africa-focused climate technologies.

Prior to this, in November 2022, Leta raised $3 million in a pre-seed round from various local investors.

These funds were strategically allocated to strengthen operations within its five primary markets: Kenya, Nigeria, Uganda, Zambia, and Zimbabwe.

How Leta Optimizes Logistics

Leta’s technology for load and route optimization is instrumental in helping clients reduce costs and enhance delivery efficiency.

This is achieved by minimizing the number of vehicles required for distribution, as explained by founder and CEO Nick Joshi.

The platform seamlessly integrates with existing business systems, including ERP, POS, and OMS, to access real-time order data.

This data encompasses crucial details such as SKUs, product types, pricing, and customer information.

Inventory Management and Dispatching

Leta then determines the most suitable vehicle for each order and selects the optimal inventory loading method.

The system utilizes either first-in, first-out (FIFO) – prioritizing older inventory – or last-in, first-out (LIFO) – prioritizing recent stock.

This automated approach replaces traditional, intuition-based dispatching methods.

Real-Time Route Optimization

The platform automates the creation of manifests and dispatch planning, maximizing vehicle utilization based on regional demand and truck capacity.

Furthermore, Leta’s AI-driven system continuously optimizes delivery routes in real-time.

For instance, the AI identifies and flags problematic routes – such as those frequently blocked due to flooding, police checkpoints, construction, or presidential motorcades – and updates the map accordingly.

As Joshi stated, the system’s map layer is constantly updated to reflect these dynamic changes.

Logistics, Embedded Finance, and Sustainability Initiatives

Leta’s mapping capabilities, operating in real-time, have proven to be a significant advantage, attracting investment from companies like Google. Joshi emphasizes that the ongoing improvements to Leta’s road and address data, gathered from active customer deliveries, will serve to enhance Google Maps within its operational areas.

“We are developing a considerably more dependable map and address system, which is a primary reason for Google’s interest,” he stated.

Joshi envisions financial services as a logical progression of Leta’s software platform, given its ability to connect all parties involved in the supply chain. Pilot programs for new products are already underway. These potential services encompass fuel cards designed for delivery personnel, financing options for vehicles and equipment, and supply chain financing solutions for businesses dealing in fast-moving consumer goods.

Deepali Nangia, leading Speedinvest’s investments in both Africa and the Middle East, explained the firm’s support for Leta stems from its ability to “utilize logistics as an entry point and fintech to stimulate growth, thereby creating novel business prospects.”

Furthermore, Leta assists companies in reducing the size of their fleets without compromising delivery volume, leading to lower fuel consumption and decreased emissions, a factor that influenced Equator’s investment.

“A business operating a fleet of 70 trucks can realize savings of approximately $30,000 per month through the use of Leta,” Joshi asserts. “While we haven’t yet begun to monitor carbon emissions, it remains a crucial objective for the current year.”

Currently, the Kenyan startup supports over 35 prominent businesses, including internationally recognized brands such as KFC and Diageo, as well as regional leaders like EABL and Gilani, optimizing more than 10,000 trips daily across five different markets.

Since our previous report in 2022, Leta has experienced substantial expansion: deliveries have increased from 500,000 to 4.5 million, cargo volume has risen from 20,000 tons to 150,000 tons, and vehicle management has grown from 2,000 to 7,400. Consequently, Leta’s revenue, generated through a per-delivery pricing structure, has increased fivefold, according to Joshi.

Leta’s current objective is to double its revenue in the coming months as it extends its reach into additional countries throughout Africa and the Middle East, continuing to serve clients like KFC and Diageo.

On a global scale, Leta’s trajectory mirrors that of early Flexport, prior to its transition into a technology-driven fulfillment platform. In Africa, logistics startups such as Sendy, Lori (also supported by Google), and KOBO360 initially adopted a similar strategy, focusing on truck aggregation and acting as intermediaries. However, this approach has faced challenges, resulting in recent company closures and strategic shifts.

Leta distinguishes itself by focusing solely on software solutions. Rather than aggregating or directly managing freight, it collaborates with companies that already possess their own fleets, assisting them in enhancing efficiency and optimizing resource utilization. This strategy aligns with that of other global logistics technology companies like Bringg, Onfleet, and Shipsy.

“The initial wave of logistics startups in Africa played a vital role in educating the market and demonstrating the potential of the sector,” Joshi explains. “By the time we entered the market, some were either exiting or attempting to redefine their business models. This allowed us to understand precisely what the market required.”