The transaction is the most recent for Verdant Capital’s award-winning FinTech and Financial Inclusion investment banking franchise (www.Verdant-Cap.com). Partech Africa, part of the Partech Group, a leading global technology venture capital fund, and Enza Capital have invested in the USD 3.6 million extension round – agreed and structured in 2020 – bringing the total volume of the Series A at $ 9.9 million. This comes in addition to the first close led by Mobility 54, the Africa-focused venture capital entity backed by the Toyota Group, as well as $ 12 million in debt financing raised over the past 18 months, by through institutional investors from the UK, Germany, Switzerland, the Netherlands and South Africa. Verdant Capital acts as financial advisor and arranger to Tugende for its increases in equity and debt.
The MSME credit deficit in sub-Saharan Africa is over US $ 331 billion per year, with a gap of US $ 37 billion in East Africa alone. The growth of innovative and technological business models, like the one in Tugende, is helping to close the credit gap left by traditional banks. The capital increases for Tugende strengthen its balance sheet and allow the expansion of its loan portfolio. Having built its leading position in financing boda bodas (motorcycle taxis) in Uganda, Tugende launched its operations in Kenya at the end of 2019, relaunching its regional expansion, while continuing to add new asset products for other types of informal sector clients. Equity investments and partnerships with leading capital companies will also accelerate Tugende’s technological development and organizational growth.
Tugende (www.goTugende.com) uses asset financing, technology and a highly tactile customer support model to help micro, small and medium enterprises (MSMEs) own income generating assets. Tugende has served over 43,000 clients and over 16,000 have acquired ownership of at least one asset. Its main asset finance packages include medical and life insurance, training, safety equipment and digital credit profiles, in addition to affordable asset finance. Tugende has expanded the production assets it finances to include fishing boat engines, cars, refrigerators and other income-generating equipment and is currently piloting the financing of electric mobility assets. All payments are digital and Tugende automatically provides exclusive credit scores to all customers to help them monitor their performance and unlock new opportunities like discounts and new products.
Tugende’s Series A transaction strengthens Verdant Capital’s track record of raising capital for emerging leaders in high-impact fintech and bringing these businesses to a wide range of global investors. In recognition of Verdant Capital’s strong fundraising volumes over the past 12 months in East, West and South Africa, Verdant Capital received the award for Best Fintech Capital Raising Team in Africa , by cfi.co in its Q1 2021 Business and Finance awards. During the recent cfi.co awards, ESG and impact investing themes were widely discussed with BBVA and Credit Mutual, respectively from Spain and France, winning distinctions for responsible investment management and the award. Neuberger Berman for its North American ESG investment platform.
Verdant Capital won the award after a period of record transaction volumes in Africa, with some $ 500 million in capital raising and mergers and acquisitions in the fintech sector in 2020. Verdant Capital has successfully completed transactions in the fintech sector. ‘worth a total of USD 40 million in 2020 capital increases included companies such as Tugende, Retail Capital, a South African player in SME lending technologies, and Planet42, a South African car underwriting firm. Based on the growth of its own pipeline, Verdant Capital expects industry-wide transaction volumes in 2021 to exceed levels set in 2020.
Verdant Capital’s ability to present its clients to a global audience is further enhanced by its exclusive annual investor conference, Video Africa. The second edition, held in March, brought together 45 leading specialist investors from 22 countries, showcasing 18 of the top fintech and financial services clients from across Africa.
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