Chartering and shipping ocean freight in Africa can be difficult. This sector is inefficient and fragmented. It is also difficult for merchants to obtain finance to transborder trade across the continent. MVX, a Nigeria-based digital freight company, is trying to solve this problem. Today, the company announces its $1.3 million seed round in order to support its efforts.Tonye Membere Otaji was the one who came up with the idea of MVX. Membere-Otaji, who has worked in the maritime sector (both as a family business owner and as a professional building websites for companies), was fascinated by the lack of an online marketplace for vessels.TechCrunch told him that he decided to find a solution to the problem of finding vessels due to too many intermediaries making it difficult. The company's progress was halted by a few problems, including a lack of the right team to build the product. Membere-Otaji launched the company in 2019 with Tobi Amusan, CTO. The pre-seed investment of Oui Capital, a pan-African venture capital firm, was $100,000.At first, the company was called MVXchange. Its business model was to provide a platform for support vessel booking that matched requests from operators with available Offshore Support Vessels.The company changed its model and made a sharp turn in March 2020. The decision was made by CEO Membere-Otaji, citing uncertainty over oil prices and the pandemic.Because of the future decline in demand for fossil fuels, we couldn't see ourselves chartering vessels long-term. He said that they wanted something that could scale, that would have an impact, and that would be something we could be proud to do in the next 20-years.The launch of MVXtransit was the next step. This platform allows cargo owners to find freight deals for moving containers throughout Nigeria. The company also launched MVXpay in April as a payment and finance solution for freight operators. MVX now combines both of these offerings.MVX's CEO stated that the company wants to make African businesses more efficient in freight shipping and trade financing by making it easier to book and deploy cargo online. The startup claims it has expanded beyond Nigeria, and that merchants from West Africa, Kenya, South Africa and Ghana can use its platform for freight movement in and out of those countries.MVX charges a commission to provide services such as trucking, warehousing and shipping.Businesses find it simple and convenient to use our platform. We handle everything, instead of businesses trying to do it all themselves which can lead to chaos and distract from their core business. MVX is a service provider that shippers can work with, and it works with seven to ten other service providers, according to Membere-Otaji.By 2025, the market for cross-border logistic services will have a revenue of $32 billion. The market will reach its full potential only if there are multiple companies. This has been the case and investors are starting to notice. Ghana's Jetstream, which offers a similar service, raised $3 million just two months ago. Another example is SEND; YC supports the startup.Membere-Otaji says that MVX is a trade finance company.This concept combines the best of both trade and fintech. It works by merchants moving shipments from Africa to America or China. However, not all have sufficient capital to pay freight or supply. They can request credit through MVX. MVX then passes the information to its financial partners who loan to consumers if the consumer meets the minimum requirements. Next, MVX handles the shipment and ships it overseas. After the transaction is completed, the merchant will pay back the merchant, and all partners will receive commissions.Our job is to promote trade in Africa. Freight is one way to do that. We want to be involved in every aspect of that process, from trade finance and warehousing to payment processing. We are the only company that has that trading finance component. We also see huge potential in the offline marketplace. The reason we are experiencing this problem right now is because transactions are not available online. It is important to also focus on offline markets.Pan-African freight company, which has shipped more than 300 cargoes this year, plans to add 1,500. The CEO claims that the company has exceeded its 2020 goals in terms of revenue and traction.MVX raised seed round funding from Africa-focused companies Kepple Africa and The Continent Venture Partners. Founders Factory, Launch Africa and Capital Oak also contributed to the financing. A number of angel investors from the U.S. and South Africa participated as well. The investment will be used by the two-year-old startup to expand its operations, hire employees and improve its technology. MVX is also looking for investors to help it raise additional money, likely through debt, to fund its trade financing product.Satoshi Shinada (general partner at Kepple Africa), stated that the trade sector in Africa was one that is ready for disruption. MVX is developing a revolutionary platform and technology to transform the way businesses in Africa ship goods and trade internationally.
