Tugende, a technology-enabled asset finance company operating in Uganda and Kenya, today announced the completion of a USD $6.3M Series A investment round, led by Toyota Tsusho investment fund Mobility 54. Other participants in the round were U.S.-based Global Partnerships’ Social Venture Fund, current shareholders including Denali Venture Philanthropy and Segal Family Foundation and new angel investors.
“Tugende’s focus has always been on meeting our clients where they are today, and finding win-win ways to grow together,” said Tugende CEO Michael Wilkerson. “We started with three motorcycle taxi clients, a tiny office without water, and many negative perceptions about lending to the informal sector and motorcyclists in particular.”
Here Is What You Need To Know
- The new investment will help Tugende further enhance its technology platform, both for internal operations and client-facing offerings — including Tugende’s transparent, dynamic credit score all clients already receive automatically.
- Tugende will also use the capital to further grow its core financing product for motorcycle taxi drivers and accelerate its diversification into other MSME asset finance products including equipment for retails shops, agriculture, and further mobility assets, including e-mobility.
- Mobility 54 and its group network will help Tugende with further market expansion, partnerships, and technology development.
- Tugende has previously raised more than $20M in debt capital to grow its portfolio. Current debt partners include Partners Group Impact Investments, U.S. Development Finance Corporation, Symbiotics, Frankfurt School Financial Services, ADA Microfinance, Agora, Yunus Social Business, Global Social Impact Fund, and Oikocredit.
Why The Investors Invested
Mobility 54 is a joint venture of Toyota Tsusho and its group company CFAO, with a focus on investing in the next generation of mobility across Africa and promoting synergies across its network.
“We are extremely delighted to participate in this investment for Tugende,” said Takeshi Watanabe, CEO of Mobility 54. “Financial inclusion for MSMEs and individual business entrepreneurs is a critical success factor for sustainable development across African economies. Tugende has proven commercial viability and is also a leader in terms of innovation, execution, and deep respect for its clients and their ambitions.
“In addition, we as Toyota Tsusho / CFAO Group are very excited to work with the CEO Michael Wilkerson as well as his excellent team — on the ground, side-by-side, and under a shared vision, to realize the geographical expansion of Tugende, to continue developing innovative value-added services for its clients, and to build together opportunities for long term growth for informal and MSME entrepreneurs,” Watanabe said.
On the other hand, the Global Partnerships/Eleos Social Venture Fund (SVF) is an impact-first fund investing in early-stage social enterprises to expand opportunity for people living in poverty in Eastern Africa. The fund was created to address the “pioneer gap” by supporting early stage social enterprises with a combination of investment capital and Board-level advisory support.
According to Jim Villanueva, Managing Director of Global Partnerships’ Social Venture Fund:
“Tugende consistently demonstrates a commitment to providing high-impact services to boost the incomes of its low income customers so we are thrilled to be part of this funding round.”
“Even amidst the pandemic, when there was a temporary ban on motorcycle taxi service in Uganda, Tugende demonstrated disciplined management of impact and operational sustainability, preparing them for rapid growth as the market re-opens,” he further said.
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A Look At What Tugende Does
Based in Kampala, Uganda and launched in 2012, Tugende’s core product is a lease-to-own/hire-purchase package for motorcycle taxi drivers in Uganda and Kenya. The package includes training, medical and life insurance, safety equipment and hands on support through the journey to ownership. With over 35,000 clients served, Tugende is tackling the $331 billion credit gap MSMEs face across Africa.
Tugende recently launched a client app and has invested heavily in its technology backbone for scalability, data analytics, and operational efficiency. In addition to building ownership, Tugende clients earn a digital credit profile which allows them to unlock new opportunities like discounts, rewards, and products exclusive to top performers in the network.
Tugende currently has 17 branches in Uganda and one in Kenya and has already resumed growth in both countries after Covid-related lockdowns. While also commercially sustainable, Tugende has won numerous awards for its social impact and responded to challenging lockdowns in Uganda and Kenya in part with an unconditional household support grant for all clients to help their households survive the worst of the lockdowns
“Our clients have proven that they are creditworthy tens of thousands of times now and want opportunities to drive their own growth. We are committed to expanding those growth opportunities beyond credit alone — something we have already started by providing smartphones, family insurance, and digital credit profiles clients can access themselves,” Wilkerson said.
“Tugende is a launchpad for our clients and a partner for many years to come. We are excited and energized about bringing on strong new investors who also share our long term focus and will catalyze our ability to help clients own their future.”
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer