- Series A extension round of 3.6 million brings total funding to 9.9 million
- Initial round backed by Toyota Group
- Investment secured by leading fintech and financial inclusion investment banking franchise of Verdant Capital.
Wale Ameen
Online Editor
Leading East African fintech MSME lender Tugende has secured a total of USD 9.9 million in series A round. This follows the investment of an additional USD 3.6 million in an extension round led by Partech Africa, a member of the Partech Group, a leading global technology venture capital fund and Enza Capital.
The first round was led by Mobility 54, the Africa-focused venture capital entity backed by the Toyota Group as well as USD 12 million of debt financing raised over the last 18 months, through institutional investors from the UK, Germany, Switzerland, the Netherlands and South Africa. Verdant Capital serves as Tugende’s financial advisor and arranger for its equity and debt capital raises.
Tugende empowers micro, small and medium enterprises by helping them acquire income-generating assets through the use of asset finance, technology and a high touch customer support model with core asset finance packages including medical and life insurance, traning, safety equipment and digital credit profiles in addition to affordable asset finance.
The brand has helped over 43,000 clients with more than 16,000 assisted in the ownership of at least one asset and has further broadened the productive assets it finances to include fising boat engines, cars, refrigerators and other income generating assets.
All payments are digital and Tugende provides proprietary credit scores automatically to all clients to help them monitor their performance and unlock new opportunities like discounts and new products.
Tugende’s Series A funding round was powered by leading fintech and financial inclusion investment banking franchise of Verdant Capital.
In recognition of Verdant Capital’s strong capital raising volumes in the last 12 months across East, West and South Africa, Verdant Capital was awarded Best Fintech Capital Raising Team in Africa, by cfi.co in its Q1 2021 business and finance awards.
Reports have it that the MSME credit gap across sub-Saharan Africa amounts to more than USD 331 billion per year, with a gap of USD 37 billion in East Africa alone. The growth of innovative and technology enabled business models, such as Tugende’s, are helping fill the credit gap left by traditional banks.
The capital raises for Tugende will help the brand strengthen its balance sheet and allow the expansion of its loan portfolio. Having built its leading position financing startups like boda bodas (motorcycle taxis) in Uganda, Tugende launched its Kenyan operations in late 2019, kick-starting its regional expansion, while it continued to add new asset products for other types of informal sector clients. The equity investments and partnerships with leading equity firms will also accelerate Tugende’s technology development and organisational growth.
