Valuation dips in African startups (Part 1): Lori Systems, Kobo360’s fall from millions
Editor`s note: This story is the first of a three-part series that spotlights Valuation drops in African startups and how they are rewriting the narrative after experiencing steep valuation headwinds
In the fast-beating heart of Africa’s tech and startup scene, where dreams are coded into apps and pitches echo in accelerators from Lagos to Nairobi, the path to success is never as straightforward as the glossy headlines make it seem. Valuation drops in African startups are no longer whispered behind closed boardroom doors. They’re now front and centre in the public eye, shaping investor sentiment and founder strategy. And for good reasons.
If the last few years taught us anything, it’s that raising millions doesn’t guarantee survival. Nor does valuation reflect permanence. Multiple African startups have raised millions of dollars in funding rounds only to return to market with significantly lower valuations, a harsh reflection of changing investor appetites, fragile economies, and the grit required to survive.
Today, we begin a series exploring the tough, untold stories behind valuation slashes of some of Africa’s most well-known startups. This multi-part feature explores startups that once stood as paragons of African innovation, only to be humbled by market dynamics. Yet amid these valuation slashes, many aren’t folding. They’re rewriting the rules, finding new models, and digging in for the long game.
Why valuation drops in African startups are reshaping strategies
We begin with two of the continent’s most visible players in logistics tech: Lori Systems and Kobo360, darlings of innovation that, at one point, seemed destined to own Africa’s $150 billion logistics and supply chain market. Until the tide turned.
Lori Systems: from $150M to $5M and pivoting under pressure
Founded in 2016, Lori Systems set out with a clear mission: to make Africa’s notoriously inefficient supply chain systems work better, faster, and cheaper. Quickly, it earned recognition as one of Africa’s most promising logistics startups. By digitising haulage operations across East and West Africa, VCs bought in, and in 2020, the Nairobi-based startup was reportedly valued at an estimated $150 million. Lori’s momentum was impossible to ignore. Google selected it for its Launchpad Accelerator, IFC touted it in logistics-focused studies, and global media painted it as a model of scalable African ingenuity. But by 2024, the valuation had plummeted to $5 million, a startling 95% collapse, following a fundraise that exposed the company’s faltering trajectory.
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What happened?
According to analysts, Lori Systems struggled to balance its capital-heavy operational model with the shift in global investor sentiment. As capital became more expensive, profitability replaced growth as the golden metric. Lori Systems, which had expanded aggressively without an immediate path to revenue sustainability, found itself cornered. Insiders point to operational missteps, cash flow crunches, and an overly capital-intensive model.
One senior product lead who spoke anonymously said, “We had built for scale, but not yet for resilience. When markets tightened, we couldn’t iterate fast enough. This case reflects one of the major steep startup valuation slumps in Africa, we`ve had to witness in recent times.”
Despite the dip, in 2024, the startup pivoted. Lori stopped functioning as a lender and repositioned itself as a tech-first logistics facilitator, focusing on partnerships and licensing its software. Leaner. Quieter. More cautious and efficient.
“We realised being a tech-enabled logistics player, not a capital-heavy business, was our best bet,” an insider said in a closed-door investor call reviewed by smepeaks.
Whether this pivot will rebuild investor trust remains to be seen.
Kobo360: from $86.2M raised to ₦10B debt, can the king of trucks ride again?
The story of Kobo360 reads like a Silicon Valley fairytale until the wheels start to fall off.
Founded in 2017 by Obi Ozor and Ife Oyedele, Kobo360 launched as a B2B logistics platform often dubbed the “Uber for freight” in Africa. It promised to transform haulage operations by matching cargo to truckers, offering working capital, fuel support, and digitised supply chain solutions. Backed by global heavyweights like Goldman Sachs, the IFC, and TLcom Capital, the company raised over $86 million and expanded operations across Nigeria, Kenya, Ghana, and beyond. For a while, things looked bright. Kobo360 had expanded into multiple African markets and was dubbed a “game changer.”
But under the surface, cracks began to show. The company’s cash-intensive model strained margins, and its aggressive expansion outpaced operational control. In 2022, mounting internal tensions led to the unexpected ousting of co-founder and CEO Obi Ozor. Sources close to the company pointed to board-level disagreements over Kobo360’s strategic direction, high burn rate, and Ozor’s uncompromising leadership style. His removal was framed as a “necessary reset to stabilise the business”. Leadership transitioned to Ciku Mugambi, a seasoned operator brought in to drive fiscal discipline and navigate the company through turbulent waters. But Kobo360’s problems ran deeper.
Kobo360’s challenges underscore how valuation drops in African startups often go hand in hand with debt overhangs and business model resets
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By 2024, Kobo360 was in crisis. A major financial partner had pulled out, truck drivers began protesting unpaid dues, user volumes declined, and platform activity slumped as customer trust eroded. The company couldn’t sustain its cash flow. Things came to a head when CEO Ciku Mugambi stepped down, following the resignation of other senior executives in quick succession. Operations were scaled back. Layoffs ensued.
Debt ballooned, over ₦10 billion by some estimates, and Kobo360 hovered on the brink of collapse. Then, a twist: in early 2025, Obi Ozor returned as CEO, this time with a visibly more restrained mandate. In a rare interview, he remarked, “I’m not back to replicate old wins. I’m here to rebuild Kobo360 from the fundamentals up.”
Rather than chasing platform scale, the company is now pivoting toward more traditional logistics services and long-term haulage contracts, hoping to stabilise cash flow and rebuild trust with clients and drivers alike. The company has a steep climb ahead. But many say if anyone can do it, it’s Ozor, now older, battle-worn, and perhaps wiser.
Analysts say valuation drops in African startups are forcing founders to pivot faster, cut burn, and rethink expansion playbooks. Just as these stories have proven, across the continent, founders are rethinking strategies, tightening operations, and finding innovative ways to adapt to shifting markets. In part two of this series, we’ll explore more cases where resilience, reinvention, and smart pivots are helping African startups turn tough valuation moments into stepping stones for long‑term success.
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