Tugende, a technology asset finance company with operations in Uganda has closed a $3.6m (Shs13b) deal in equity financing.
The round was led by Partech, with participation from Enza Capital, a regionally based angel investor.
The investment, which was structured last year, is an extension of Tugende’s Series A financing , which was announced in September 2020 led by Toyota Tsusho’s Mobility 54.
This brings the total amount of equity capital raised for the Series A to $9.9m. Series A funding is a venture capital investment made to a business that has developed a track record with an established user base and consistent revenue figures.
“Last year, in the middle of the pandemic, we decided to invest in Tugende,” said Mr Tidjane Deme, a partner at Partech, noting: “Tugende combines technology and strong operations to aid millions of professionals grow their businesses and drive economies forward.”
“We will support Tugende to build up the tech platform, fine-tune the model and expand in new markets.”
The funds are expected to be deployed towards supporting closure of new debt capital and fuelling Tugende’s growth in Uganda and Kenya.
Mr Michael Wilkerson, the Tugende chief executive, said the company is using innovative technology to incorporate a range of social considerations to build new type of credit scores.
This, he said, will increase access to capital across a range of African markets where entrepreneurs have limited credit history or collateral.
The company which largely deals in financing motorcycle and vehicles, wants to diversify into other asset finance products, including retail shops, and agriculture.
“Tugende has a demonstrated ability to unlock sustained entrepreneurial activity through its productive asset financing business for informal sector entrepreneurs”, said Mike Mompi, Partner, Enza Capital.
Tugende is one of the leading fintech firms in Uganda in attracting venture capital funding, which is recorded to be on the low in Uganda, except for African countries such as Rwanda, Kenya, Nigeria, Egypt and South Africa with the highest venture capital funding.