The Ugandan leasing company, Tugende, dedicated to the capital leasing of transport vehicles (motorbikes-taxis, cars) has obtained a financing of $3.6 million in a round led by Partech Partners, a venture capital firm active in Africa and Enza Capital which operates out of Kenya. The latest investment is coming after Tugende secured a $6.3 million series A financing round in October 2020 from the Japanese Toyota.
“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 investment, which is an extension of the $6.3 million Series A round raised last year and led by Toyota Tsusho investment fund Mobility 54, brings Tugende’s total Series A financing to $9.9 million.
- 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
“Last year, in the midst of a pandemic, we decided to invest in Tugende. The company combines technology and strong operations to help professionals grow their businesses. We will help Michael and his team strengthen the technology platform, refine their model and expand into new markets, ”said Tidjane Deme, Partner at Partech.
“Tugende has demonstrated its ability to carry out sustained entrepreneurial activity thanks to its activity of financing productive assets for entrepreneurs in the informal sector […] We are delighted to support it in this phase of rapid growth”, indicated Mike Mompi , partner at Enza Capital.
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 43,000 clients served, Tugende is tackling the $331 billion credit gap MSMEs face across Africa.
Outside of 2020, the company has more than doubled its work team each year since 2012 and currently has more than 500 full-time employees.
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.
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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