Uganda’s asset finance startup Tugende has secured $3.6M in additional equity funding to close off its Series A round.
In the works since late 2020, this recent funding round led by Partech, with participation from Enza Capital and regional angel investors, brings the total amount of equity capital Tugende has received to $9.9M.
Launched in 2012 by CEO Michael Wilkerson Tugende uses asset finance, technology, and a high-touch customer support model to help micro, small, and medium-sized enterprises (MSMEs) own income-generating assets.
The company is by no means the only tech-powered asset financing company in the East Africa region. With other firms like Kenya’s M-KOPA renowned for helping low-income families purchase electronic gadgets, Tugende finds its niche by building a lease-to-own/hire-purchase package for motorcycle taxi drivers across Uganda and Kenya.
In addition to providing physical assets such as motorcycle taxis, boat engines, cars, and refrigerators, the package includes training, medical and life insurance, safety equipment, and hands-on support for drivers through their journey to ownership.
The platform offers digitalized payment for assets. This means that with its users’ data, Tugende is able to provide proprietary credit scores automatically to all clients to help them monitor their performance, opening up opportunities including discounts and procure new assets.
Having served over 43,000 clients with more than 16,000 already becoming owners of at least one asset, the startup is well underway to tackle the $331 billion credit gap MSMEs face across Africa.
The company recently expanded to Kenya and is planing further geographical growth with its more than $20M in debt capital from Partners Group Impact Investments, U.S. Development Finance Corporation, Symbiotics, Frankfurt School Financial Services, Agora, Yunus Social Business, Global Social Impact Fund, and Oikocredit.
By increasing its geographical and asset product diversification, as well as creating a further digital ecosystem for growing SMEs and their households, Tugende positions itself to help millions of small-time business owners to increase their household wealth, economic stability and keep building a better future for their families.
Perhaps, this constitutes its appeal to Partech which decided to invest in the company last year “in the middle of the pandemic” according to Tidjane Deme, general partner at the VC firm who co-leads the Partech Africa fund.
“Tugende combines technology and strong operations to aid millions of professionals to grow their businesses and drive economies forward. We will support Michael and his team to build up the tech platform, fine-tune the model and expand in new markets,” Deme said.
“Tugende has a demonstrated ability to unlock sustained entrepreneurial activity through its productive asset financing business for informal sector entrepreneurs,“ added Mike Mompi, Partner at Enza Capital.
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