Verdant Capital Hybrid Fund completes a USD 7 million dual-tranche investment in Mogo Kenya
The investment will help provide thousands of self-employed entrepreneurs operating as motorbike and tuk-tuk taxi riders or courier or delivery drivers in Kenya with greater economic empowerment and asset ownership opportunities.
Verdant Capital is pleased to announce that its Verdant Capital Hybrid Fund (the “Fund”) has completed a USD 7 million dual-tranche investment comprising a subordinated loan and senior secured loan to Mogo Auto Limited (“Mogo Kenya”), a subsidiary of Eleving Group operating in Europe, Asia, and Africa. This investment is the third for the Fund. The investment will help Mogo Kenya expand its portfolio of motorbike (fuel and electric-powered two-wheelers, locally known as “boda-bodas”), tuk-tuk (three-wheeler), car, and car logbook or leaseback financing throughout the country. This represents an important milestone for Mogo Kenya, which is the largest asset financing business of Eleving Group, established in 2018.
Mogo Kenya is one of Kenya’s leading fintech asset financing businesses, specifically for motorbikes (fuel and electric-powered), tuk-tuks, and cars, which remain an essential mode of transport and commerce in the country. On the electric motorbike financing, Mogo Kenya partners with electric motorbike suppliers and ride-hailing companies to spread the adoption of climate-friendly e-mobility in the country with zero carbon dioxide emission and noise pollution. These electric motorbikes are cost-intensive in terms of consumption and maintenance, allowing riders to save on their operating costs. Its business model accommodates and creates income generation and a discernible take-home income increase via asset ownership for the unbanked self-employed entrepreneurs and small business owners. Mogo Kenya’s operations are backed by the strong use of technology, including automated processes, GPS tracking tools for the financed vehicle assets, and the use of digital payments via mobile money wallets.
The Fund’s investment will provide Mogo Kenya with more funding for motorbike (fuel and electric powered), tuk-tuk, car, and car leaseback financing across the country. These financed vehicle assets are usually the principal source of income for the clients. Mogo Kenya’s business model provides an affordable route for its clients to attain financial stability, the ability to participate in the economy and, in many cases, the first opportunity to have tangible wealth in the form of ownership of the financed vehicle assets. The Fund’s subordinated loan will strengthen Mogo Kenya’s balance sheet and help “crowd-in” more senior debt funding to further grow its balance sheet. The Fund was attracted by Mogo Kenya’s business model aligned with the Fund’s mission to use its funding to empower “bottom-of-the-pyramid” clients while benefiting from fundamental credit risk mitigants. The investment benefits from a parent guarantee.
The Fund’s investment is yielding a return aligned with the Fund’s return target.