Verdant Capital supports USD 9.9 M Series A equity capital raise for Tugende, a leading technology enabled MSME lender in East Africa.
Tugende, a leading technology enabled MSME lender in East Africa, has closed an additional round of USD 3.6 million equity funding bringing the total amount raised in its Series A equity financing to USD 9.9 million. The latest round was led by Partech Africa, a member of the Partech Group and a leading global technology venture capital fund, and Enza Capital, an early-stage venture capital fund that focuses on partnering with founders and management teams that leverage technology in scaling their business while solving social issues. This round is complementary to the first round led by Mobility 54, the Africa-focused venture capital entity backed by the Toyota Group. The overall investment strengthens Tugende’s balance sheet, allowing it to drawdown on a significant debt pipeline from leading international lenders, and onboards strong partners that will complement Tugende’s existing team. Together, the partners possess the ability to scale the business across East Africa in the near term and across the continent in the medium-term.
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. Having built its leading position financing boda bodas (motorcycle taxis) in Uganda, Tugende launched its Kenyan operations in late 2019 and is adding new asset products for other types of informal sector clients. The business weathered the COVID-19 driven economic crisis and has regained a steady footing along its rapid growth trajectory. The company continues to expand its footprint in both markets and has launched financing for a broader range of assets including cars, minibuses, outboard motors, and appliances all for business use. Equally important, Tugende is building upon its technology stack, raising its ability to gather and analyze an increasing array of data and information to complement its client experience while enhancing client loyalty.
Tugende has served over 43,000 clients with more than 16,000 having achieved ownership of at least one asset. More than 500 employees ensure that the company remains the go-to provider of credit to MSMEs across East Africa and help keep Tugende’s market leading portfolio quality and cost of risk strong. Verdant Capital served as Tugende’s financial advisor and arranger for its equity and debt capital raises.
More details on Partech’s motivation to invest in Tugende can be found here.