Once upon a time, a startup raised millions of dollars, hired aggressively, expanded into multiple countries, and then—crash! It turns out the money wasn’t a bottomless pit.
Staff were laid off, debts piled up, and investors started whispering the unspeakable: write-off. The industry moved on, looking for the next big bet.
Kobo360 followed this well-worn path. At its peak, the logistics-tech startup raised $79 million in equity and debt financing. That’s not pocket change. Investors like Juven, a Goldman Sachs spin-off; the International Finance Corporation (IFC), and TLcom Capital backed the company.
But this isn’t just a Kobo360 story. It’s the playbook of many African startups that have sprinted into the unknown with venture capital fuel. The problem? Scaling isn’t just about speed—it’s about control. And Kobo360, once called the “Uber for Trucks,” is now a case study in what happens when a business runs faster than its balance sheet.
Oluwatoyin Olufon, founder of Techy Accountant, laid out six necessary business principles that every founder should pin to their wall before touching a single investor dollar.
Let’s break them down, not just for Kobo360, but for any entrepreneur who dreams of building a company that survives beyond the fundraising glorification.
1. A Solid Business Model is Non-Negotiable
“With this backdrop, I was particularly interested in Kobo360’s business model, which I still believe is solid.”
Olufon is right—Kobo360’s business model was solid on paper. Digitising freight logistics? Great. Aggregating 50,000 trucks? Impressive. But business models don’t live in PowerPoint slides; they live in execution.
If your model depends on external capital to survive, it’s not a business—it’s a financial experiment. Kobo360 paid truck drivers upfront while waiting 30 to 90 days for manufacturers to settle invoices. That’s like fronting drinks for friends at a bar, hoping they’ll pay you back in three months. When a bank partner cut off credit lines, the entire operation stalled.
2. Bank Loans are Not Your Friends
“If you haven’t perfected your financial management skills, steer clear of bank loans. Bank loans are like sharks – without a solid business foundation, you’ll struggle to keep up.”
Many startups treat bank loans like magic money. Kobo360 borrowed at least ₦10 billion, thinking revenue would catch up. But in Africa’s logistics sector—where margins are razor-thin and operational disorder is the norm—relying on debt is like using a candle to walk through a minefield.
The problem is that loans demand fixed repayments, but startup revenue is anything but fixed. Banks don’t care if your trucks are stuck at the border or if diesel prices have doubled. They just want their money back. And when that money doesn’t come, the sharks circle.
3. Blitzscaling is Not for Every Business
“Fast Scaling refers to rapid growth through aggressive marketing, hiring, and investment. Blitzscaling takes this a step further, prioritising market dominance and growth over short-term profitability.”
Blitzscaling worked for Uber. It worked for Amazon. But Kobo360 was trying to blitzscale an industry held together by bad roads, bureaucracy, and unreliable supply chains. Technology can solve many problems, but it can’t fix dishonest drivers, endless port delays, or unpredictable diesel expenses.
Some industries demand slow scaling. You test, refine, stabilise cash flow, and grow gradually. Scaling too fast without solving core structural issues is like building a skyscraper on quicksand—it looks commendable until it starts sinking.
4. External Factors Can Kill Even the Best Business
“When operating in an industry with factors beyond your control (like dishonest drivers, insecurity, bad road infrastructure, seaport bureaucracy and unfavourable receivables days), it’s best to adopt slow scaling. Technology can’t fix these external issues, and rapid growth will only amplify them, reducing your runway and increasing your burn rate.”
Olufon highlights an uncomfortable truth—some industries are hostile to startups. No matter how brilliant your idea is, if the ecosystem isn’t ready, you’re in for a fight.
Take e-commerce in Nigeria. Jumia and Konga struggled for years because logistics costs ate into profits. Compare that to fintech, where Paystack and Flutterwave thrived because their business models weren’t dependent on unpredictable supply chains.
Kobo360 tried to fix logistics with tech, but the problem was never just about tech. It was about cash flow, infrastructure, and unpredictable operational risks.
5. You Must Control Your Burn Rate
If venture capital funds your entire existence, you are not a business—you are a high-stakes gamble. Kobo360 expanded into Kenya, Ghana, Benin, and Burkina Faso in rapid succession, hiring staff, acquiring trucks, and spending aggressively.
Then the funding environment changed. Investors stopped prioritising scale and started asking for profitability. Kobo360 had no answer. By the time the company laid off 60% of its staff, the warning signs had been flashing for years.
The best businesses are those that can survive without external funding. If your model collapses the moment investors step back, you were never running a company—you were running on borrowed time.
6. Your Business is More Than Just You—Build Assets that Outlive You
“I sincerely hope Kobo360’s founding CEO can turn things around. I’m rooting for him. However, if a turnaround isn’t possible, I hope they consider alternative options beyond shutting down. Their proprietary technology is a significant asset that could be acquired and leveraged by another company, ensuring their innovation and investment don’t go to waste.”
Here’s where Kobo360 still has a chance. The logistics-tech they built is valuable. Even if the company as we know it disappears, the technology can live on.
Startups fail, but intellectual property can be repurposed, sold, or licensed. Amazon Web Services (AWS) was originally built to support Amazon’s own operations—now it’s a multi-billion-dollar business. Slack started as a gaming company before pivoting into workplace communication.
If Kobo360 disappears, its technology doesn’t have to. The real test of a founder goes beyond building a business, to knowing how to salvage value when things go wrong.
Kobo360’s founding CEO, Obi Ozor, is back, leading a tiny team of fewer than ten people. He’s reportedly seeking traditional financing and haulage partnerships to revive the company. But the details are murky, and the CEO position is still technically vacant.
What Every Entrepreneur Should Learn from This
Kobo360 isn’t the first startup to burn through millions and crash, and it won’t be the last. The real lesson here isn’t about trucks, but business fundamentals.
If you are building a startup today, ask yourself:
- Do I have a real business model, or am I just spending investor money?
- Can my business survive without external funding?
- Am I scaling at a pace my cash flow can support?
- What external factors could completely derail my business?
- If my company fails, do I have assets that can still create value?
Oluwatoyin Olufon’s six principles are warnings. Ignore them at your own risk.
Can Kobo360 survive without venture capital? The odds aren’t great. But if Ozor can rebuild with better financial management, sustainable scaling, and alternative funding models, there’s a chance.
Funding alone does not build a business. Founders who don’t learn this lesson will keep repeating the same cycle until they run out of second chances.
