How Toyota Tsusho Makes Investments In African Startups Through Mobility 54
Mobility 54, a corporate venture capital firm owned by Toyota Tsusho, the trading arm of Japan’s Toyota Group, is steadily establishing itself as a force to be reckoned with in the African startup investing environment. The VC, which is just two years old, has made roughly eight investments in African firms and has recently committed over $12 million to Samurai Incubate, another Japanese venture capital company set up in 2020 to invest in African startups.
Investment in Samurai Incubate is a rare, bold move by Mobility 54 towards diversifying its portfolio, to cover startups in other sectors outside of mobility.
With locations in Paris, France; Tokyo, Japan; and Nairobi, Kenya, Mobility 54, which was established through a partnership between Toyota Tsusho Corporation (“TTC”) and its subsidiary CFAO SAS (“CFAO”), is going to be a great force in the coming years as the Toyota Group changes its investment strategies in Africa.
How Toyota Tsusho Invests In African Startups
According to Richard Bielle, Toyota Tsusho’s Division Chief Executive Officer Africa Division, Toyota’s investment pattern in Africa through Mobility 54 is to invest in startups in the African MaaS field, and to support the development of industries centered on mobility.
But that pattern has expanded with time as other sectors outside of mobility continue to draw the firm’s attention.
Recently, it entered into investment partnership with Samurai Incubate to expand its original investment mandate.
Through the partnership, Toyota Tsusho —via Mobility 54 — invested about $12 million in Samurai Incubate.
The partnership will target startups raising Pre-Series A rounds in Nigeria, Kenya, South Africa, Egypt, among other countries. The average ticket size for investments will range between 100k to $735k for startups developing solutions in the finance & insurance, logistics, medical & healthcare, retail and e-commerce, energy, agriculture, transportation and mobility, and entertainment sectors.
“In line with the “WITH AFRICA FOR AFRICA” philosophy, the Africa Division will contribute to Africa’s economic growth and industrialization, and respond to its expanding middle class, with the goal of establishing the №1 presence in Africa,” Bielle said.
Toyota Tsusho Invests Mostly Through Convertible Notes
Generally, Toyota Tsusho usually prefers to invest in African startups through convertible notes. Consequently, a majority of its previous investments had been carried out under a convertible bond/note structure.
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A convertible bond is a form of borrowing by a company in which the borrowing company pays the lender fixed amount of interests or dividends until the borrowed amount is due for repayment. It is convertible because both the dividends/interests and the total amount borrowed can be converted into common stock or equity shares in the company, in this case Data Integrated. This conversion from the bond to stock happens at specified times during the life of the bond and is usually at the discretion of the bondholder, in this case Toyota Tsusho.
Partnership With CFAO Ensures Toyota’s Investments Reaches Africa’s 54 Countries, Including More Than Ever Before, The French-speaking Areas
Toyota’s ownership of 97.4% stake in CFAO S.A., a French-listed distribution company, has ensured that it is able to explore Africa’s length and breadth, no matter the language spoken.
“Through the alliance between Toyota Tsusho, which has created a network based on the automobile distributor business, primarily in southeast Africa, and CFAO, which has a history of more than a century and a solid presence in western and Francophone Africa, we will conduct efficient and strategic business throughout the continent,” Toyota Tsusho Group noted in a statement.
This partnership has ensured that Mobility 54 has most recently made sustained investments in startups located in Francophone Africa, such as Senegal’s Kai Senegal, Ivory Coast’s Moja Ride, among others.
| S/N | Startups/Companies Invested Into | Country of Investment | Year Startup Was founded | Sector/Description of Startups | Year Of Investment | Amount of Investment |
|---|---|---|---|---|---|---|
| 1 | AiCare | Kenya | 2020 | InsurTech/Provider of telematics insurance system for insurance companies in Kenya. | May, 2021 | Undisclosed |
| 2 | Data Integrated | Kenya | 2012 | Mobility/Provides operation management systems for bus operators in Kenya | October, 2020 | Undisclosed |
| 3 | Samurai Incubate | Japan | 2008; Began investing in Africa in 2018. | Africa-focused Japanese early stage investor. Fund will target healthcare and retail, MaaS startups raising Pre-Series A rounds in Nigeria, Kenya, South Africa, Egypt, among other countries. | April, 2021 | $12m |
| 4 | Tugende | Uganda | 2012 | A technology-enabled asset finance company | October, 2020 | Lead investor in $6.3m Series A round. Toyota Tsusho invested $4m out of the sum |
| 5 | Sendy | Kenya | 2019 | Mobility/Sendy allows its users to move almost anything from point A to B at the touch of a button. | January, 2020 | |
| 6 | YEEG SAS (Kai Senegal) | Senegal | 2018 | Mobility/Ride-haling/Fleet management/ vehicle finance scheme | August, 2021 | Undisclosed |
| 7 | InTouch | Senegal | 2014 | Fintech/ A solution that offers more than 230 digital services (mobile money, agency banking, money transfer, purchase of telephone credit, etc.) and accepts all forms of payments. | June, 2021 | Undisclosed |
| 8 | Moja Ride | Ivory Coast | Renamed Moja Ride in 2020. Operated as Moja Wallet since 2017. | Mobility/ Allows commuters to schedule and pay for trips online while also allowing independent transportation providers to manage their fleet, routes, and payment methods. | March and June, 2021 | Undisclosed |
| 9 | WhereIsMyTransport | South Africa | 2016 | Mobility/ a big data platform for sustainable mobility in emerging markets, which connects and collects data and integrates this information on its open data platform. | March, 2020 | Part of a $7.5m round |
How To Reach Out To Mobility 54
Mobility 54’s African key persons include:
- Kiyohisa Imada: Deputy CEO, Mobility 54
- Kei Ozawa: Manager, Mobility 54 (English-speaking Africa)
- Arisa Sakurai: Manager, Mobility 54 (English-speaking Africa)
- Octave Habert, Investment Manager, Mobility 54 (French-speaking Africa)
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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