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With an interesting take on making profit through social good, affordable motorcycle startup Tugende has announced that it’s closed a round of US$780 000.
The Ugandan-based company describes itself as a for-profit social enterprise that offers an affordable lease-to-own model to help motorcycle taxi drivers own bikes in 18 months or less. The business model seems pretty sleek and has in 2014 grew 300% to over 700 active customers.
“We know that across Uganda and many other emerging markets, motorcycles are driving economies forward by moving people and getting business done. From farmers needing to move produce to professionals stuck in traffic, demand for affordable transport solutions is high, and motorcycles are filling the gap.” said Tugende CEO Michael Wilkerson. “Perhaps more importantly, motorcycles provide hundreds of thousands of badly needed jobs in a region with massive youth unemployment.”
Tugende’s high level goal is to help high-risk borrowers in East Africa take control of their own income generating assets, even when they can’t access financing from mainstream options–a common problem for Uganda’s motorcycle taxi or “boda boda” operators.
With this latest injection from a mixture of backers — Segal Family Foundation, Echoing Green, and some angels — the company hopes to corner the local Ugandan market which it estimates to be approximately 400 000 people who rely on motorcycles to make a living.
“As an organization that funds and supports early-stage social entrepreneurs, Echoing Green was thrilled to invest in Michael Wilkerson and Tugende,” said Rich Leimsider, Vice President of Echoing Green. “Tugende is doing vitally important work with a tested, and proven, business model. But most importantly, Michael, like all the best entrepreneurs, is all-in. He and his team won’t rest until they’ve grown Tugende into a business that has the biggest impact.”
Tugende’s new investment follows an earlier round of US$300 000 closed in December 2013. Tugende was an Unreasonable Fellow in 2012, under its original name “Own Your Own Boda.” The name was changed to Tugende in February 2013 which means “let’s go!” in the local language, Luganda.