Tugende, a technology-based asset finance company, has raised $9.9 million Series A funding through investment banking franchise Verdent Capital.
The company initially closed a $3.6 million Series A extension round led by Partech Africa with participation from Enza Capital and other angel investors in March 2021. The extension round follows the $6.3 million Tugende raised in November 2020 from Toyota Group's Mobility 54.
Tugende also raised $12 million in debt financing within the last 18 months from investors across 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.
The growth of innovative and technology enabled business models, such as Tugende’s, are helping fill the credit gap left by traditional banks. The MSME credit gap across sub-Saharan Africa amounts to more than $331 billion per year, with a gap of $37 billion in East Africa alone.
The capital raises for Tugende strengthen its balance sheet and allow the expansion of its loan portfolio. Having built its leading position by financing boda bodas (motorcycle taxis) in Uganda, Tugende expanded to Kenyan operations in late 2019, while continuing 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 organizational growth.
Tugende uses asset finance, technology, and a high touch customer support model to help micro, small and medium enterprises (MSMEs) own income-generating assets. They have served over 43,000 clients with more than 16,000 having achieved ownership of at least one asset.
Its core asset finance packages include medical and life insurance, training, safety equipment and digital credit profiles in addition to affordable asset finance. Tugende has broadened the productive assets it finances to include fishing boat engines, cars, refrigerators and other income generating equipment and is also currently piloting financing for e-mobility assets.
All Tugende's payments are digital. It also automatically provides its clients with proprietary credit scores that will help them monitor their performance and unlock new opportunities like discounts and new products.
Tugende’s Series A transaction cements Verdant Capital’s track record in raising capital for high impact emerging financial technology leaders and bringing these businesses to a broad range of global investors.
Verdant Capital was awarded Best Fintech Capital Raising Team in Africa, by cfi.co in its Q1 2021 business and finance awards, in recognition of its strong capital raising volumes in the last 12 months across East, West and South Africa.
Verdant Capital won the award following a period of record deal volumes in Africa, with some $500 million of capital raising and M&A in the Fintech sector in 2020. The investment bank successfully completed transactions in the sector with a total value of $40 million in 2020.
The capital raises included businesses such as Tugende, Retail Capital, a South African SME-credit tech player, and Planet42, a South African car-subscription business. Based on the growth in its own pipeline, Verdant Capital expects sector-wide deal volumes in 2021 to exceed the levels set in 2020.
Verdant Capital’s ability to showcase its clients to a global audience is further enhanced by its proprietary annual global investor conference, Video Africa. The second edition hosted in March was attended by 45 leading specialist investors from 22 countries, showcasing 18 of the firm’s leading fintech and financial services clients from across Africa.
Verdant Capital is a specialist investment bank and investment manager operating on a pan-African basis. Verdant Capital ranked ninth in the DealMakers Africa pan-African investment banking league tables and third in the DealMakers Africa league table for East Africa in 2020.
They are also the IMAP partner firm for its region. IMAP, with partner firms in over 40 countries, over 500 bankers and completing over 250 transactions a year, is the World’s largest M&A partnership.