Y Combinator-backed startup, Topship, has closed a $2.5 million seed funding round, with Flexport as lead investor.
Topship makes the sending and receiving process of items seamless for customers. The new capital will enable the startup, launched in 2020, to expand operations to Ghana, Tanzania and Kenya. Part of the investment would also be used to improve Topship’s asset-light technology and build out a proprietary global shipping infrastructure to make imports and exports significantly faster and easier.
Y Combinator was included in this round alongside Soma Capital, Starling Ventures, Olive Tree Capital, Capital X and True Capital. Angel investors were Immad Akhund, Mercury CEO and Arash Ferdowsi, co-founder of Dropbox.
Topship is striving towards creating the easiest way for African businesses to export and import parcels and cargo to their customers, suppliers, and distributors worldwide. Its mission is to make the shipping experience in Africa as easy and stress-free as booking an Uber ride.
The startup serves as a borderline for local and international shipping solution between digital freight and e-commerce fulfilment. The company allows 1,500 merchants to move cargo and parcels from Nigeria to over 150 countries. Although it can help Nigerian merchants receive parcel deliveries from other countries, it can only accept cargo deliveries from the U.S., U.K and China.
The company’s revenue comes from selling shipping insurance and taking a margin on transactions, with current exploration in other revenue streams, including trade financing and customs clearance charges. Topship has recorded approximately 50% month-on-month revenue growth since getting into YC this January.
With focus also delving into fashion design and retail, the startup has set up grants worth $3,500 each to award new and established fashion brands in Nigeria as a sign of support for the future of the growing e-commerce sector in the country.