The round was led by Flexport with the participation of Y Combinator-Soma Capital, Starling Ventures, Olive Tree Capital, Capital X, and True Capital.
Individual investors in the round include Mercury CEO Immad Akhund and Dropbox co-founder Arash Ferdowsi.
The start-up will use the funds to establish the most convenient way for African businesses to export and import parcels and cargo to their customers, suppliers, and distributors around the world.
Founded in 2020 by Moses Enenwali after he noted an increase in merchants’ needs for delivering parcels and goods outside of Nigeria.
The start-up aims to make it as simple as possible for African businesses to send and receive parcels and cargo to their customers, suppliers, and distributors around the world.
The platform along with competitors such as Sote, SEND, and OnePort365 also aims to improve Africa’s overall shipping experience.
One reason that may work in its favor is its focus on air freight, even as others look to replicate Flexport’s mix of air, ocean, and truck haulage.
Topship, according to Enewali, enables 1,500 businesses to ship cargo and packages from Nigeria to more than 150 nations.
Although it can assist Nigerian merchants in receiving parcel delivery in the opposite direction, it can only accept cargo deliveries from the United States, the United Kingdom, and China.
The start-up makes money by selling shipping insurance and collecting a cut of every transaction.
According to Enewali, the company is looking at other revenue streams such as trade financing and customs clearing fees. Since joining YC in January, the company has grown its sales by 50% month over month.
Topship was invited by merchant organizations from Ghana, Tanzania, and Kenya late last year to assess the feasibility of launching in their local markets.
Enewali claims that the new investment will allow Topship to move forward and begin operations in the United States.
In addition, he said, a portion of the money would go toward improving asset-light technologies and developing a proprietary global transportation infrastructure that would make imports and exports much faster and easier.
As a gesture of “assistance for the future of the booming e-commerce sector” in Nigeria, Topship has put aside some money in fashion design and retail grants worth US$3,500 each to reward new and established fashion firms.