Lori Systems: Revolutionizing Africa’s Logistics
In recent years, Africa has climbed to the top among regions that have made a high jump in development.
That is why many companies from around the world are turning to this continent to build and flourish it to its full potential. Generally speaking, the infrastructure and building sectors are the fastest growing ones, with many European or overseas countries increasing their investments day by day.
However, this significant change naturally brought some problems, especially in the logistics space.
Josh Sandler saw this and decided to make a change. His idea to found Lori Systems was built on the desire to contribute to Africa’s development, emphasizing the need to change their logistics.
Let's see more of Josh's story and how Lori helps African society!
Lori Systems Founder - Taking the First Steps
Originating from South Africa, Josh Sandler had always been interested in finance and entrepreneurship. Ever since he was a child, his ambitions and hardworking persona showed that there was a promise for a successful future.
At the age of 18, Josh got the chance to volunteer in a refugee camp in South Africa, which changed his life's course. This experience sparked something in him – the need to change the system and stop the wave of refugee crises.
He saw the way to do it in pursuing a career in investment banking where he could be in the middle of where the money came from, so he could find a way to work it the other way around.
His BBA in Finance from the University of Georgia was only strengthened when he took the joint program for Masters of Public Administration in International Development and Masters of Business Administration at the Harvard Kennedy School and Harvard Business School. This is where he got the micro and macro knowledge he needed to fully pursue his dream.
The South African Entrepreneur’s Climb to the Top
Even before obtaining his degrees, Josh kept busy. He started off with investment banking and private equity and worked in several companies in different positions. The first one was a summer analyst at Lehman Brothers. One month later, in 2009, Josh transferred to Barclay Capital, working in the same position.
Josh also worked as a consultant at the Kenya Agribusiness and Agroindustry Alliance for several months during 2014.
But this was all before he got his MBA and MPA. Around this period, he was already working on solving the issue of supply chains in Africa. His thesis showed the African supply chain's obstacles and concluded that the big problem was trucking.
At first, Josh wasn’t strongly set on becoming an entrepreneur right after graduation. But his professors encouraged his idea, showing him he already had the background he needed to pursue his dreams.
At the same time, his classmates played a big role in his decision too. Many of them have helped Josh raise funds for the company and even get customers to see the benefits they’d have with Lori. As Josh himself says, “We’d be nowhere near where we are without the HBS network!”
So, once he got the basis, Josh decided it was time to put his words into action. Thus, Lori came to be!
Revolutionizing the Transport Cost
Josh had a very simple idea.
Let’s say that a product, which is an everyday commodity in some parts of the world, will be shipped and sold in an African country. The price of it in its final destination could be 75% higher than what it was originally meant to be sold for. And the reason for that is the expensive logistics cost on this continent.
This is where Lori comes in. Being set up as a company that connects the cargo owners to the transportation they require, this company’s mission is to lower the price of goods in Africa. Nowadays, the main focus is on East Africa.
The Hardships of Africa
Being a remote and developing continent, providing cheap and affordable service that would work for everyone was challenging for the South African entrepreneur.
For years, transportation in Africa has been conducted in the same way – high prices for a simple service. So the first obstacle was going over the people’s idea that this was the only way. The second one came right after, as there were plenty of competitors doing the transportation the old way, while Lori Systems was striving for new and lower prices.
Unlike other transportation companies, Lori applied a different approach on the whole and has made an impact on African logistics as it is. Overcoming the challenges, Lori created the change Josh wanted to see in Africa since the birth of the idea.
What Makes Lori Systems Exceptional
The first thing that sets this company apart is its mission – decreasing product costs. Using innovative ways to deliver the service needed, while the customer is their number one priority, is the fuel Lori uses to work forward.
Efficiency as their leading force, the company's chiefs strongly believe that only well-arranged progress would meet their expectations. As said, timetables and improved planning could bring them to the required productivity, and productivity brings efficiency - which ends up in delivering goods at a lower cost.
Lori is a total solution logistics company operating with digital matching to establish the connection between the cargo owners and the transporters. Following the trucks at every stage of the process, the technology Lori uses helps optimize any activity the customer wants anytime.
The security protocols Lori follows are at their top level as well. They have a layering system that allows only authorized people to check on their data and take advantage of the technologically leading system the company has established.
Lori Systems Financial Path
Up until now, Lori Systems has gained $38.2 million in funding. The company is backed by 16 investors in total, 5 of which are leading investors from Germany, China, the UK, and South Africa. Newtown Partners and Bossanova Investimentos are the most recent ones.
The first round was a pre-seed round, and it started in 2017. There was only one investor back then, Larix, but Lori Systems managed to gain $25,000. In the next seed round, the company significantly increased in funds, reaching $6.2 million. A $30 million investment in Series A in 2019 followed this one, with 11 investors all in all.
2020 was the year with the last 2 funding rounds. The first one was in August, and it was a debt-financing round that raised $1.5 million. In November of the same year, one investor, Newtown Partners, invested $500,000 into their corporate round.
For now, this is the fifth and final funding round for Lori.
Future Endeavors of the e-Logistics Company
Since African e-logistics companies, such as Lori Systems, play an enormous role in cost reduction, the company is planning to expand and flourish even more. The current headquarters of this company is in Nairobi, Kenya, and it has over 250 employees.
Lori just signed a partnership with Thumeza, a start-up company of a smaller size.
“Working with entities like Lori Systems, who partner with thousands of small-scale transporters, allows us to maximize our impact on the SMEs who provide logistical services for more than 80% of trade across Africa,” - said the CEO of Thumeza, Gugu Siso.
Their partnership with Moove also promises good results, as Moove is a mobility fintech company that has just set its first steps into the logistics business.
A vast continent is waiting for Lori to deliver the best out of e-logistics. And looking at the statistics, satisfying results are expected in the future.