The African continent stands on the cusp of remarkable economic expansion and societal evolution in the twenty-first century, poised for significant transformation. However, realizing this potential is challenged by an aging trade infrastructure largely unchanged from the previous century.

Sote is a company aiming to address this critical issue. They have recently secured $3 million in seed funding to bolster their operations in Nairobi and San Francisco, focused on modernizing logistics for African shipping, beginning with customs clearance and forwarding procedures.

The company’s ambition is to establish itself as the primary digital logistics hub for the African continent.

“They are striving to revolutionize an industry that has experienced minimal innovation for a hundred years, particularly in the areas of receiving and forwarding goods across the continent,” explained Marlon Nichols, co-founder and managing director of MaC Venture Capital, and an investor in Sote’s seed funding round. “The terrain is challenging, with limited navigable waterways, making vehicle transport the primary option. There’s a scarcity of internal infrastructure and restricted access points for goods entering the continent. Historically, the main obstacle has been the complexities and costs associated with customs clearance.”

Sote “is designed to foster transparency and facilitate business opportunities throughout Africa,” Nichols stated. 

Initially, Sote is offering a software solution to streamline customs clearing and forwarding, providing industrial cargo owners with a unified dashboard to manage all involved parties.

Despite the substantial $22 billion valuation achieved by logistics startups like Flexport, the African continent has seen comparatively little technological development in this sector, according to Nichols. Sote intends to rectify this imbalance.

The company’s software functions as a workflow management tool for freight clearing and forwarding, alongside a dashboard for tracking shipment status, payment records, and projected container arrival times.

Sote was founded by Felix Orwa, a native of Kenya, along with co-founders Meka Este-McDonald, formerly a product manager at Verizon and Gigster, and Scott Yacko, previously a director of software engineering at Amazon and director of architecture at Walmart.

MaC Venture Capital estimates the total addressable market for Sote to be approximately $20 billion, considering the company’s integrated approach.

The company is positioned to collaborate with businesses such as Kobo Networks and Lori Systems, both of which have successfully built substantial, venture-backed companies focused on resolving the logistical challenges of transporting goods to local markets in landlocked regions.

Approximately 20 million containers pass through Africa each year, with over 1 million containers moving through Kenya, Sote’s initial target market. Kenya represents one-sixth of Africa’s shipping market and is the fifth-busiest port on the continent, serving as a gateway to Eastern African countries including Tanzania, Uganda, Somalia, Rwanda, and South Sudan.

Sote charges around $1,000 per container processed, and handling even a small percentage of the total container volume could generate $100 million in annual revenue within the next decade, as projected by MaC Venture Capital.

Este-McDonald and Orwa have been developing this business for the past three years.

“Our core product is comparable to Flexport,” Orwa explained. “We provide the same service to customers that Flexport offers in the U.S., assisting manufacturers with cargo movement without requiring them to obtain licenses and manage taxes directly. Flexport handles these aspects, and we operate under license from the government agency to facilitate tax payments.”

Looking ahead, Sote plans to incorporate warehousing services and arrange transportation via trucks. “The current process – moving a single container – involves around 60 separate messages, calls, and emails exchanged between all involved parties,” Orwa noted.

Further investment in the company’s seed round, which concluded last month, came from Acceleprise, Backstage Capital, Future Africa, and Rob Solomon — the chairman at GoFundMe. Nichols will be joining the company’s board.