Only six months after Asaak, a Ugandan asset finance firm, obtained $30 million in pre-Series A loan and equity capital, Verdant Capital has announced that its Verdant Capital Hybrid Fund has made its first investment, in Watu Credit Uganda Limited (“Watu”). The USD 7 million investment will allow Watu to expand its two-wheeler finance reach across the country. This is a significant milestone for Watu in Uganda, its second largest market after Kenya, where the company was founded in 2015. Watu is also expected to benefit from efforts supported by the Fund’s technical assistance facility.
Watu will have more money thanks to the Fund’s investment, which it can use to finance motorbike taxis all around Uganda. Typically, the riders’ main source of income comes from these motorcycles. The Watu business model offers riders an affordable way to achieve financial security, the capacity to engage in the market, and, in many cases, the first chance to acquire real wealth in the form of motorcycle ownership. The subordinated debt investment made by the Fund will help Watu’s balance sheet grow and will help “crowd-in” more senior debt financing. The Fund was drawn to Watu because its business strategy complemented its goal of using money to empower “base-of-the-pyramid” clients while enjoying the benefits of basic credit risk mitigation.
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The Verdant Capital Hybrid Fund is a $100 million fund (target final closing). The Fund aims to have a significant positive impact on development, notably by generating revenue and jobs through SMEs and microbusiness. Pan-African inclusive financial institutions are receiving investments from the Fund in the form of hybrid capital and subordinated loan instruments. The Fund’s target market includes specialised banks, microfinance organisations, leasing and factoring businesses, fintech firms, and other non-bank financial institutions. Making sure that the investments adhere to strict environmental and social standards will be a top priority.
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Founded in 2019,Watu specialises in financing two-wheelers. For the unbanked and financially underprivileged people, the business model provides services and possibilities. Technology is heavily utilised in Watu’s operations, including automated procedures, GPS monitoring devices for the motorbikes, and the sole usage of digital payments made through mobile money wallets.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh