For the competition, that is…
But first, let’s start with some context.
Africa took a giant leap as market leader Spiro closed a mammoth round of USD 270 million, first USD 215 million at the start of the month, and then a further USD 55 million a few days later. Spiro does not put monikers on its funding rounds, so it’s not Series A, Series B, etc. It’s just a round, and we are going with the assumption that the round is closed now because Gagan Gupta, the chairman of Equitane, the fund that owns Spiro, announced that on LinkedIn.
But then we came across this video: Gagan Gupta’s interview with the Financial Times’ FDI Intelligence.
At around the 9:29 mark in the video, Gupta mentions one more round of funding following through. He puts the recent and upcoming capital raise for Spiro at USD 400 million. We have recorded only USD 270 million till now.
That hints at another upcoming tranche of about 130 million. That should be worrying…for everyone else.
Spiro is not new to making big rounds. Its last round of 100 million was the biggest ever for African mobility. The 270 million raise shatters the previous record into smithereens. With this round, Bloomberg estimated, Spiro is close to a post-money unicorn status.
They even lit up the NYSE, not for the first time, though.
Quality Scores; Variety Counts
However, more than the size of the round, it is the quality and variety of investors that are worth talking about here.
In the past, whenever I have spoken to Spiro’s competitors, the common nitpicking has been that it’s Gagan Gupta and Equitane recycling their money into Spiro. In one broad, brutal brushstroke, competitors discounted the collective wisdom of the financial institutions in Africa, institutions like Afreximbank, that were co-investing with Equitane as just being in cahoots with the Dubai-based, Indian origin industrialist.
Sour grapes?
This round turned that argument on its head. Apart from Equitane, two fairly large investors new to the cap table did much of the heavy lifting. The first was Impact Fund-Denmark, a Nordic pension fund, which wrote a USD 40 million cheque for Spiro. Nordic pension funds are notorious for their due diligence and take their own sweet time in evaluating a market. This was not just an investment; this was a quality certification for the prospects of e-mobility in Africa. Given that Impact Fund probably analyzed multiple players in Africa before investing, this is also a vote of confidence for Spiro.
The USD 40 million check made this the single biggest investment by any outside Africa investor into the continent’s e-mobility.
However, that record didn’t last long because within a week or so, it was upended by China-based NewTrails Capital investing USD 55 million into Spiro. NewTrails is a fund based out of China, and its basic, underdeveloped website does not reveal much. Then our friends at Mobility Rising pointed out that it was a fund supported by Shenzhen Transsion Holdings, the China-based smartphone major.
If you have never been to Africa, let’s say that Transsion controls more than 40% of the smartphone market with its brands Techno, Infinix, and Itel. Like any good large-sized smartphone manufacturer, Transsion also builds and sells a lot of laptops, IoT devices, smart watches, earbuds, etc. Africa is their major market, and they also own Boomplay, Africa’s largest music streaming service, Phoenix, a leading content distribution platform, and Scooper, the continent’s leading newsfeed platform.
Electric motorcycles are a natural progression.
Again, if you have operated in Africa, you would understand that mentioning smartphones, fintech, and electric motorcycles in the same sentence is quite normal.
The interesting thing here, though, is that Transsion owns TankVolt, a growing electric motorcycle and three-wheeler brand, and a Spiro rival in some markets. However, at $55 million, it seems that Transsion has put more money into the outsider than it has into its own brand. To us, it does not suggest that Transsion now wants to ride two horses. Instead, we see an incoming collaboration and co-existence between Spiro and TankVolt. Don’t wait for a press release; this is bound to happen.
The Three Africas
With the USD 270 million fund raise, Spiro has now effectively raised USD 455 million in equity and another USD 163 million in debt. Since Equitane has been the most aggressive investor in Spiro’s cap table, the promoter shareholding would still be very high. That means the scope for some more dilution to get even bigger investors on the captable is very high.
This is essentially, a company primed for an IPO somewhere in the next 2-3 years.
But I wish Spiro’s massive fundraiser was an indicator of the health of African e-mobility. The scale difference across Africa is stark. At the other end of the spectrum, Zembo is issuing bonds in the UK to fund its growth. It raises $264,000 to fund 200 motorcycles. Modest, nearly immaterial, when compared to Spiro’s mammoth round.
A few weeks back, Roam ran a crowdfunding campaign to raise USD 233, 000 in equity. They did inform us that the crowdfunding campaign was just a part of the overall funding round and not the entire round itself, but we have not seen any media reports on the rest of the round.
This is not to diss Zembo or Roam, or any of the other smaller players. If you are an electric mobility entrepreneur in Africa, you have our utmost respect. We have also been fortunate enough to speak in detail to the founders that matter: Josh Whale of Ampersand, Michael Spencer of Zeno, and Filip Lövström of Roam. There are important names that are missing, and we will get to them very soon.
That, to me, indicates that there are two Africas, or maybe three. There is one Africa in Spiro, which is running so far ahead of the pack that it’s probably no longer in the same stadium. It is the market leader, probably adding more motorcycles in a month than the rest of the industry would do in a year. Recently, Mobility Rising pointed out that Spiro added more jobs last month than the competition did together.
The size of the checks has been steadily increasing. When that happens, there is also a material shift in the kind of funds looking at writing one. In the case of Spiro, it has reached the point where the next big raise would likely come from a sovereign fund with a large triple-digit check.
That also puts investors everywhere in a quandary and creates a natural hesitation.
For any investor coming in with a large check, there would be strong internal turmoil if the check did not read Spiro. And if you are a early stage fund writing six-digit and seven digit cheques for startups, Africa is no longer that kindergarten playground you were used to. Go fund North America or Europe.
The second Africa comprises mid-sized players such as Zeno, Ampersand, and Roam. Apart from Zeno, the others have been around for a very long time, yet have raised very little when compared to Spiro. Some, like Ampersand, have been around for more than seven years but still mostly missed the ‘Climate-tech spring’ of 2018-21, when venture money was chasing climate tech like mad.
Limited funding means that business plans are constrained. Ampersand has been going at it slowly, and instead of aggressively deploying motorcycles, it is now inviting other parties to deploy motorcycles on its network. This is conserving capital without explicitly saying so. The communication may paint it as a position of strength, but it’s far from that. Josh Whale has also stepped away, taking the mantle of Chief Innovation & Customer Officer, while the Executive Chairman, Michael Barton, has taken over as CEO.
That did leave us befuddled, as the natural progression is the other way around. Michael joined the Ampersand board only in October 2025. Before that, his experience with African electric motorcycles was about zero.
Roam is different. It sells the battery pack to the rider. There is no real swapping. With the adoption of the Type-6 standard, it is going towards faster charging, the only option it has to nudge any recurring revenues. This makes it a completely different business model than Spiro, ARC Ride, or Ampersand. Again, limited capital to deploy means Roam is likely more focused on profitability than expansion. That should be endearing to investors, but VC funds are built differently. Also, Africa is still in the early growth phases and yet to face its first reckoning. Capital would be chasing growth, the risk appetite high, blinkers fully on.
There is also Zeno with its sharp-as-a-samurai founder. For all practical purposes, Michael Spencer lives out of a suitcase. For now, Zeno is sailing in two boats – swapping as well as fast charging. As a result, the customer has multiple options to choose from. Swapping+charging works well in Zeno’s opinion, as it optimises the number of battery packs that need to be deployed in the field to support the fleet. Reducing the battery float improves RoCE, a desirable attribute. At the same time, charging and swapping together increase operational complexities. The jury is still out as Zeno’s vehicle parc is still very small. Scaling up is painful.
With limited capital availability, we see Zeno doubling down on fast charging. A couple of days back, they announced Jorn van de Ven as their new Vice President of Energy Operations. In his previous assignment, Jorn had built and led Tesla’s supercharger business. You don’t come with stronger credentials than that. Within the same announcement, Zeno also welcomed Jaser Faruq as an Independent Board Director. Jaser is currently Chief Product Officer at ChargePoint, the second largest charging network in North America. Like Michael and Jorn, Jaser too is a Tesla alumnus. In fact, Spencer, on a recent MCJ podcast (1. Excellent podcast; 2. They invested in Zeno), stated that they now have six Tesla alumni in Zeno.
Swapping or fast charging, both make Zeno, like everyone else, an energy company. However, a focus on charging puts them directly against Roam more than everyone else, as we wrote a couple of days back.
InsightEV – Global Electric Mobility
Then there is the third Africa, comprising new (and old) entrants like Kofa, Kiri, REM, Dodai, ARC Ride, Zembo, and Gogo. The funding is even lower here, the business plans are even more constrained, and arguably unconvincing. Gogo Electric, until recently, was only focused on retrofitting old Bajaj Boxer motorcycles, a strategy that should be generating some profits and not burning cash. At the same time, it is not scalable or attractive to VCs.
Kofa made a beautiful battery and ‘co-developed’ a stunning motorcycle with TailG. The co-development part is in quotes because TailG now offers the same motorcycle to everyone else. Scaling up for Kofa has been a challenge.
The third Africa is united by the trait that the players fail to attract significant equity and make do with debt to continue operations. Some of these players have the highest debt-equity ratios on the continent.
The Mathematics of Swapping is not for the Faint-Hearted
The network is the product, and networks eat cash. You only start printing money when networks are mature and customers are happy. Most ventures would succumb to anemia before that.
The mathematics are brutal. If you have raised anything in the single-digit-million-USD ballpark, that will only get you a motorcycle co-developed, fewer than 1000 deployable motorcycles, and a similar number of battery sets. It will get you going a little bit. Actually, cobbling together a motorcycle using development partners would cost somewhere between 1 and 2 million. The real game starts after that. Battery swapping is the most CapEx-hungry business model in mass mobility, short of building cars. You are not just selling a motorcycle; you are financing it, owning the battery, building the swap stations, stocking spare packs, transporting packs between stations and warehouses, paying for land, security, software, and grid connections — and you are doing all of it before a single rider hands you any money. In Africa, where corded connectors are more useful than blind mate types, you also end up employing multiple people per swap station. It’s a mind-boggling operational complexity that looks deceptively simple from the outside.
The bad thing about all networks – from LinkedIn to mobile phone, mass transit, and motorcycle battery swapping – is that people won’t take you seriously if the network is not wide enough.
Wide networks need deep pockets.
As of now, there is only one deep pocket in, and completely focused on, Africa.
The Moat in Africa
Moat is the latest jargon I have comprehended in the startup world, and I quite like it. I would be using it often in the near future, so bear with me, please. A moat literally means a wide and deep channel around a castle, dug to prevent attackers from reaching the castle. Moats are great – swimming through a wide and deep channel is a good deterrent for any attacker. For good measure, I would happily throw in a few crocolides as well.
In the corporate world, a moat is desirable. In its previous avatar, we called the moat a barrier to entry. But there are subtle differences. A barrier to entry, as the name suggests, is to dissuade newcomers from entering a business. Most of the time, the availability of capital is the only barrier to entry. As an illustration, can you make a multi-cylinder touring motorcycle with a DCT transmission? Honda does. BMW comes close. But can you and I do that? The barrier to entry is the availability of funds north of $250 million to create and push such a product in the market. Then Great Wall came up with the Souo brand, and they created a motorcycle that goes beyond the Honda Goldwing and the BMW K 1600. The Chinese company can do that because they have the capital.
That, in a nutshell, is the barrier to entry, always possible to overcome with enough cash in bank.
Now, as the availability of private capital to rapidly grow disruptive businesses has shown us, a barrier to entry is no longer very relevant.
Instead, we have moats, things we create to ringfence and protect our brand and sales. Moats are important because at the very start of any large business opportunity or a megatrend, there would be multiple players who would simultaneously see the trend and jump into it. There would also be multiple private capital sources that would fund these players. Eventually, it is the moats created by each player that could decide the longevity and eventual success of some of them and the decay or death of the rest.
The Product Moat
I am a motorcycle enthusiast and would defend technological superiority over anything else. Over the last 125 years of the ICE world, generations of humans have seen why a Ducati is outrageous, a Honda dependable, and why we should give respect to the edge in Yamaha and tip our hat to the wildness in a Kawasaki. Over the decades, the good brands have managed to create moats, the biggest being happy, excited, and deeply loyal users.
The traditional boundaries blur when it comes to electric. They are completely washed away in Africa, where almost all engineering is outsourced, and supply chains are dependent on China.
To put it in the right context, Coexlion, the engineering company that Spiro just acquired, has been a major partner in the development of one motorcycle that is already plying in Africa. It was also in the process of designing a second one that would probably land in Africa in the next 12-18 months. Because they are now part of Spiro, I would forecast that a new Spiro motorcycle would also be deployed in Africa somewhere in the future. That’s one team of 28 engineers responsible for three of the 6-7 motorcycle types that would be operating in Africa in 2027.
However much people may want to bat for IP protection, product differentiation, and technological superiority, all motorcycles deployed in Africa answer to a single palette: rugged commuter. Most popular motorcycles are already inside a narrow band of specifications. In a tough market plagued by high costs of borrowing and low per capita income, we are all solving for cost-optimal dependability. At some point in the journey, engineering starts holding as much responsibility as purchasing and product validation.
Design is not even in competition. Circular headlamps, everyone? Check!
The Sourcing Moat
If the product is not an effective moat, can sourcing be? Nearly everyone depends on China, and there is nothing wrong with that. The Chinese develop quickly, deliver fast, optimize for cost, scale up fast, and can also deliver good quality if you sit in their office. The Indians may arguably deliver slightly better quality, but the quest for perfection is a suicide pill.
So if everyone is sourcing from China, what can create a moat? Perhaps the closer you are to your core suppliers, the better it is. Spiro scores high because of its scale with long-term relationships already baked in and China-based supply chain offices manned by Spiro’s own personnel. The others should do it. The survivors would do it.
The volumes give Spiro an unfair advantage. Any supplier would pick up your phone faster if your monthly order book is a five-digit number, with the promise to increase, than if it were just 200 motorcycles a month.
Mind you, it is not only about sourcing motorcycles. That’s the easy part. The bigger negotiation is on the battery packs and the cells. Volumes matter, as even a cent shaved off on a cell is millions of dollars on the balance sheet. Like everyone else, cell suppliers like to keep the lights on in their plants. A high volume guarantee would easily make prices drop, giving the buyer an advantage over its competitors.
With the kind of capital they raised and the volumes that they plan to deploy, Spiro is in a league of its own. Here is Gagan Gupta, in the same video, nonchalantly mentioning that Spiro would be buying USD 400 million of batteries this year and nearly a billion worth next year. He goes on to say that he has asked his suppliers to start making batteries in Africa from next year. With their scale, only Spiro can make that demand. Supplier exclusivity is a deep moat. That’s a huge advantage over any competitor planning to meet them in the market while ordering cells off a catalogue from China.
The Service Moat
The natural progression of service quality is downwards when a manufacturer goes from very low numbers to modest values. Smaller players have an advantage here as the limited volumes limit complexities. With low volumes, you can be a Rolls-Royce in service as things are bespoke.
But the volume is also a limitation. Eventually, investors would want you to grow. Life has to move beyond a 6000 vehicle parc growing at 200 motorcycles a month. But add a few zeroes after the parc and you need systems, decision making, component supply, and a whole team looking after customer satisfaction.
Luckily Hopefully, Spiro has seen Ola and knows what a heady cocktail of (a lot of) money and (over) confidence can do. There has been a hiring frenzy at the market leader in recent months, topped by a new Group CEO. Anant Badjatya comes from Indian battery swapping leader Indofast, a company that scaled fast while preserving customer satisfaction. It’s early days, but that seems like the right man for the job.
Is Africa Now a One-Horse Race?
It is a bit early in the day. Africa is a fast-growing market. Spiro has a huge advantage over everyone else, driven by scale and accessibility to funds. Access to capital is definitely a right to win when everyone is in the energy arbitrage business. We also detect more hunger in Spiro than in everyone else.
Africa has grown bigger, and the hunger for capital would be more than in any other market. After Spiro’s recent mammoth fundraise, smaller funds and smaller OEMs would likely give the continent a pass. But big boys are lurking around the corner.
The Indians are Yet to Make a Move
The Indian players, mostly Bajaj and TVS, control African markets. The Bajaj Boxer 150 and the TVS HLX 125 are the two most popular models in Africa. Hero also retails the Hunter 150. However, electric has been a big question mark for them.
To start with, none of the Indian players has yet to engineer an electric commuter motorcycle. That should not even be the biggest hurdle, considering that all three are engineering powerhouses, and if they decide to do things, a motorcycle can materialize within months. We know that both TVS and Bajaj have multiple ongoing e-motorcycle projects.
Battery swapping is another matter altogether. As we indicated earlier, the Indians approach BaaS in a completely different format. A swappable battery sitting on the balance sheet is not something the Indians have the appetite for. Rolling out a multi-billion dollar swapping network across 8-10 African countries is not even a discussion issue. The Indians are motorcycle manufacturers, not energy trading companies. Africa is out for them, and the reason why they have not panicked till now is that Nigeria, the biggest market, has been slow to electrify.
For some of them, the most prudent approach would be to write a large check for Spiro or one of its competitors and sit tight.
Ditto, the Japanese
Honda is another matter altogether. The Japanese manufacturer does not do too well in Africa in the ICE segment. It has a very public global electrification target, and is miles away from getting anywhere close to that. Honda also wants to do battery swapping, though it has not yet been able to crack the code. Considering that the Honda MPP is a 1.5 kWh NMC battery with blind-mate connectors, it creates the same limitations that Gogoro has – too expensive, too little energy, and limited cycle life. That’s not a battery pack format that would work in Africa.
But traditional imitations have never defined Honda. The Japanese also work slowly, but the Honda flavor of working slowly is aimed at diligence, compared to the Indian flavor of working slowly, which is aimed at not getting anywhere.
The company also has a patent for this motorcycle somewhere.
In essence, this is a back-to-the-basics electric motorcycle. It is so basic that it does not even fit the Indian commuter motorcycle mandate, which makes Africa the likely target market. The motorcycle features two battery packs on either side of the frame. We see packaging and the rider triangle as issues, but this is just an early patent drawing.
Interestingly, the battery pack sits in some sort of swiveling cage linked to the main frame through a hinge mechanism. It’s typical Honda innovation. The battery pack is an important talking point.
Like most of the packs in Africa, this one comes with a corded connector, a strong indication that this thing is headed for Africa someday.
That timeline is important because, as of now, we have no confirmation that Honda is planning to do something like this. A patent drawing, and Honda files hundreds of them regularly, is just a few engineers in some part of Honda’s skunkworks putting together ideas. Getting green-flagged for a production program is a completely different ballgame.
For Yamaha, Africa is even further down the pecking order. The second major Japanese manufacturer has money, but no commitment. In the other important markets, Taiwan and India, Yamaha has piggybacked on other manufacturers for products and batteries. Africa may see the same, considering that battery swapping, alone, is something that Yamaha does not have the appetite for. Like the Indian players, we expect Yamaha to pull out the chequebook someday and write one for Spiro or one of its competitors.
The Americans are coming
Surprisingly, an American player seems more committed to Africa. Supplier intelligence indicates that the Rivian offshoot ALSO is working on a motorcycle for developing markets, including Africa. The motorcycle would be targeted both at the retail market and the motorcycle taxi market.
ALSO has USD 505 million in funding, though only a fraction of that may be marked for Africa. That is the global war chest, and the company has already launched an e-bike and an e-quad. The feature-rich, high-on-specs e-bike is aimed at the retail buyer, while the e-quad is better suited to the delivery market. However, the e-bike and e-quad are for the Global North, targeted at joint ventures and buying programs with Amazon and DoorDash. The rest of the world, the one that matters, will get some variant of the motorcycle.
The motorcycle is under development, and we won’t speculate on the dynamic spec sheet. However, what will hold our interest in the future is how ALSO, an essentially California-based company, adapts its culture to Africa. The e-bike and its power train are a volcano of innovation. But pack any of that Californian innovation in a headed-for-Africa motorcycle, and the BoM cost leaves the room.
Disclosure: Spiro recently acquired Coexlion, an engineering consultant. InsightEV advised Coexlion in the transaction.
