A tech-based asset-financing company, Tugende secures $3.6 million in latest funding round in a Series A extension round. The company which is easily identified by the branded Boda Bodas has closed this new deal, an equivalent to UGX 13.19 billion bringing its total funding to $9.9 million (UGX 36.27billion). This Series A round was led by investors like Enza Capital, Partech, a San Francisco and Paris based VC firm that has invested in a number of startups in Africa and other angel investors.
In November 2020, Tugende raised $6.3 million led by Toyota Tsusho investment fund Mobility 54. Other participants in the round were U.S.-based Global Partnerships’ Social Venture Fund, current shareholders including Denali Venture Philanthropy and Segal Family Foundation, and new angel investors.
Tugende secures $3.6 million in latest funding round with hopes to expand
Tugende is a for-profit social enterprise established in Uganda in 2012 that offers new customers asset and SME finance, leasing, insurance, and financial literacy, as well as consumer finance to qualified existing customers. This has allowed small-scale entrepreneurs to grow by addressing one of the most important aspects of succeeding in the entrepreneurial field which is financing.
Tugende is an asset financing company that uses technology to provide a platform where micro, small and medium-sized enterprises are a step closer to owning income-generating assets through a lease-to-own product. It empowers customers who do not have access to formal credit.
Michael Wilkerson, who began his career as a journalist and researcher, founded it. After years of relying on Boda Bodas because they are the most common and fastest mode of transportation in Uganda, he discovered that Boda Boda riders earned only enough money to survive and could not save.
The idea was then born to provide them with the opportunity to own motorcycles and in 2010, Wilkerson unveiled Own Your Own Boda which he later rebranded to Tugende in 2013. As it rebranded, it was able to move from handwritten contracts to fully utilise its digital platform to provide its services. Tugende secures $3.6 million in latest funding round to allow it build up its tech platform and expand in new markets according to Tidjane Deme a partner of Partech.
One of the most difficult challenges for Ugandan entrepreneurs, particularly small-scale ones, is the issue of credit financing, as the majority require loans to get started. However, they are unable to do so because banks typically require extremely high collateral or large down payments. Through Tugende, they have access to an affordable source of financing.
According to Tech Crunch Wilkerson said, “With an average household of five people, this can really transform the lives of our client and their families. Besides just increased daily profit, ownership of an asset is also wealth in itself.” “Some clients sell the fully owned motorcycle and use that lump sum of capital to make other investments while coming back to Tugende for a new lease, which is affordable from their daily cash flow.”
As Tugende secures $3.6 million in latest funding round, it recognizes significant milestones that it has been able to achieve since its inception. Its primary base is in East Africa that is, in Uganda and Kenya and it has 43,000 clients across the region.
Tugende’s productive assets have grown beyond motorcycle taxis to include boat engines, cars, refrigerators, and other revenue-generating equipment. This recent funding could help it include a variety of asset finance products and tools to help it reach millions of customers.