Watu Secures $7 Million to Expand Asset Financing Across Africa

AHL Venture Partners has finalized a $7 million debt facility for Watu, an asset-financing company that provides funding for motorcycles, three-wheelers and smartphones across Africa and Latin America. The facility will provide Watu with additional working capital as it expands its asset-financing portfolio in selected African markets. The deal also extends a financing relationship between the two companies that began in 2022.

Debt Facility to Support Watu's Expansion

The facility is structured as non-dilutive debt, meaning Watu receives additional capital without giving up equity in the company. The funding will strengthen Watu's working capital position and give the company additional capacity to finance assets across its existing markets.

The transaction forms part of AHL Venture Partners' investment focus on businesses working in areas such as mobility and digital connectivity.

Financing Motorcycles and Smartphones

Founded in 2015, Watu operates two main business lines. Its mobility business finances motorcycles and three-wheelers, while Watu Simu provides financing for smartphones. The company has also started financing electric motorcycles in selected African markets.

Watu currently operates in Kenya, Tanzania, Uganda, Rwanda, the Democratic Republic of Congo, Nigeria, Sierra Leone and South Africa, as well as Mexico and Brazil. The company says it has originated more than 7 million loans since it was founded.

Its lending model includes simplified onboarding, flexible repayment options and local teams that manage operations in the markets where it operates.

Motorcycle and three-wheeler financing gives customers access to vehicles used for transport and income-generating activities, while smartphone financing allows customers to acquire devices through structured repayments. The addition of electric motorcycle financing also gives Watu exposure to the shift towards electric mobility in some of its African markets.

Rosanne Whalley, CEO of AHL Venture Partners, said the financing supports Watu's expansion while increasing access to mobility and connectivity for customers who may have limited access to traditional finance.

Andris Kaneps, founder of Watu, said the facility will strengthen the company's working capital and support the expansion of its motorcycle, smartphone and other asset-financing portfolios.

AHL's Africa Credit Fund

The Watu transaction follows the second close of AHL Venture Partners' AHL Africa Credit Fund I, which has raised $45.5 million towards a $70 million target.

The latest close includes a $15 million senior facility, with Ceniarth contributing $5 million and a co-investor providing the remaining $10 million. The fund is anchored by the AHL Foundation and provides senior secured, mezzanine and bridge loans ranging from $2 million to $10 million.

Expanding Credit for African Businesses

AHL Venture Partners has focused on increasing the amount of private credit available to businesses operating in African markets. The firm says a challenge remains in structuring investments that meet the needs of both businesses looking for capital and investors seeking suitable opportunities.

The Watu facility is an example of that approach, providing debt financing to an established business without requiring an equity investment. For Watu, the $7 million facility gives the company additional working capital as it continues expanding its asset-financing operations across its target markets.