Chartering ships and handling cargo in Africa can be challenging. This sector is largely ineffective and fragmented. Traders are also struggling to access finance for cross-border trade across the continent. Several digital freight companies such as MVX – Nigerian Startup – are addressing this issue. The company has announced today that it has received a $ 1.3 million commitment to support its efforts.
Origin
The founder, Tonye Membere-Otaji, envisioned MVX in 2016. Membere-Otaji, who had worked in the maritime industry (ran a family business and built professional applications and websites for businesses), was fascinated by the fact that there was no online market for ships.
MVX decided to solve the problem of finding vessels caused by so many intermediaries which complicated the process. When the company started it experienced challenges trying to build the right team to help facilitate product-creation. In 2019, Member-Otaji, along with CTO Toby Amusan, finally founded the company when. It received a $100,000 investment before from Oui Capital, a pan-African venture capital firm.
Earlier at startup, the company’s name was MVXchange, having a business model that made it a provider of vessel-booking platforms making sure it matched vessel chartering requests made by operators with available Offshore Support Vessels (OSVs). However, in March 2020, a new strategy emerged and it tweaked its model. Membere-Otaji cited the irregularities in the price of oil as well as the pandemic caused it to think of new ways to add value in the marketplace.
The CEO said, “We couldn’t see ourselves doing vessel chartering for the long term because the demand for fossil fuels will definitely reduce over the next few decades. We wanted to do something scalable, something that was impactful, and something that we could be proud of in the next 20 years.”
After that the company launched MVXtransit, a digital freight booking platform. The Company uses this platform to help cargo owners look for deals on moving containers across Nigeria. In April 2021, it came with MVXpay, a finance and payment solution to provide trade finance for freight operators. The Company confirms that these two offerings are now rolled into one: MVX.
Vision and Mission
MVX aims to facilitate freight shipping and trade finance for African business through the implementation of an online booking and service delivery process. The Nigerian Startup claims that outside Nigeria, traders in Kenya, South Africa, Ghana, Rwanda, and West African countries can use the platform to move goods to and from their country. The Company received payment for the services provided, including delivery, storage, shipping and handling of goods.
The Future
The cross-border logistics services market is expected to reach $32 billion in revenue by 2025. Many companies are needed to maximise market growth. Investors are also paying attention. For example, Ghana-based Jetstream offered a similar service and raised $ 3 million two months ago. What MVX is now doing to stand out is to position itself as a trade finance company.
The concept combines the strengths of fintech and trade. Thus, a merchant trying to move cargo from Africa to the United States or China may not have enough capital to pay for goods or supplies. You can still apply for a loan at MVX. MVX provides loans to its financial partners if it meets the minimum requirements. MVX then processes the shipment and dispatches it overseas. When the transaction is complete, the merchant pays for it and all affiliates receive a commission.
The Pan-African Freight Company registered more than 300 shipments this year, but plans to close at 1,500 levels. In terms of revenue and attractiveness, the CEO said the company has reached its 2020 targets.
