Nigerian startup MVXchange plans to expand to Ghana, Senegal and Angola once it raises its seed round, with the long-term plan being to serve the entire African continent.
Launched at the beginning of this year, MVXchange is a tech-driven maritime platform that matches vessel charter requests with available Offshore Support Vessels (OSVs), helping users conveniently charter vessels while reducing man-hours, cutting costs and improving performance.
The startup last month closed a pre-seed funding round worth US$100,000 led by Oui Capital with participation from Neon Ventures, Zircon Marine and other angel investors, in order to scale its technology and acquire more enterprise customers. Tonye Membere-Otaji, founder and chief executive officer (CEO) of MVXchange, told Disrupt Africa the company was planning expansion once it raised a seed round, hopefully within the next year.
It has been a long road for MVXchange so far. Membere-Otaji came up with the idea for the business back in 2015, when he was chartering officer at Elshcon, a servicing company for the Nigerian maritime and oil and gas industries.
“My key task was to find vessels as quickly as possible for contracts, but I constantly struggled with it due to the absence of reliable vessel databases or platforms to easily find vessels. The presence of too many intermediaries made the process inefficient and complex,” he said.
Membere-Otaji built a demo, but stopped working on the project due to the sharp decline in the oil price between 2015 and 2017. He returned to it in 2017, and MCXchange is now very focused on that industry.
“We spotted the inefficiencies and delay it took to find vessels. Vessel availability is rarely promoted by owners and the presence of intermediaries between ship owners and charterers led to high day rate of the chartered vessels. This made the entire vessel chartering process disorganised, inefficient and expensive,” Membere-Otaji said.
MCXchange’s attempts to ease the process have met with a positive reception from the market. It has so far received more than 50 charter requests, and had three successful vessel charters and 32 charter days in less than three months.
The startup, which charges a fixed commission on each transaction made through its platform, has found sourcing talent to join its team to be a major challenge, while Membere-Otaji said gaining trust within the industry has also been tough.
“The maritime and oil and gas industries are legacy industries set in their ways. Online adoption by users is tough, but we are progressively gaining the confidence of our users one successful charter at a time,” he said.
These tactics now look set to take MVXchange into new markets within the next year or so as it follows up on its pre-seed raise.