The transition to electromobility is now well underway across the globe. While record market shares in developed nations such as Norway, Germany, and the United Kingdom have been catalyzed by generous incentives and progressive policy, the transition in Africa will most likely be driven by the unit economics in key sectors.
In east Africa for example, where the motorcycle is the dominant mode of motorized transport, there are an estimated 5 million motorcycle taxis in the region. The motorcycle taxi industry has led to an exponential growth in the imports of ICE motorcycles. In Kenya for example, motorcycle registrations started to grow significantly in 2007. 16,293 motorcycles were registered in 2007 and 140,215 motorcycles were registered in 2011. Registrations started to show strong growth again from 2017 with 186,434 motorcycles registered in that year. A record 210,103 motorcycles were registered in 2019. This trend can be seen across east Africa.
The number of motorcycles is expected to keep growing as demand soars due to the growth of the on-demand delivery market as well as the motorcycle taxi (boda boda) industry. A number of startups focused on electrifying the motorcycle market have now entered the boda boda space in Kenya, Uganda, and Rwanda. They have adopted several models, including battery leasing and swapping services, hoping to entice boda boda operators with the lower opex costs of electric motorcycles, which in some cases can be up to 70% cheaper to operate and maintain than the equivalent fossil fuel motorcycles.
Ampersand Rwanda Ltd, which was one of the first players in this segment and Africa’s first electric motorcycle company, has just secured a $3.5 million investment from the Ecosystem Integrity Fund (EIF). The deal is the largest ever e-mobility investment by a venture capital fund in sub-Saharan Africa and marks a turning point in global electric transport. The fact that the electric motorcycle industry in east Africa is starting to attract significant amounts of investment shows that the industry is now moving to the next level after a period of pilots across east Africa from several startups.
“We’re thrilled to have EIF on board for this historic investment. We now have the momentum to scale our operations to electrify all of East Africa’s 5 million taxi motorcycles by 2030. EIF’s support further dispels the myth that electric transport will happen in rich nations first and trickle down to developing countries later, second-hand,” says Josh Whale, Founder/CEO of Ampersand.
“We have confidence in the Ampersand team, and we believe the time is right,” said James Everett, Managing Partner of EIF. “We are very excited to partner with Ampersand as the company scales in Rwanda and expands across East Africa. We believe that electrifying 2 and 3 wheeled vehicles in developing countries represents one of the low hanging fruits for climate change mitigation globally, and can have a profound positive impact on urban air quality.”
Since its commercial launch in May 2019, Ampersand’s fleet of 35 drivers and e-motos have covered over 1.3 million kilometers and over 7000 drivers are on its waiting list. EIF’s investment builds on the startup’s acceleration through StartupBootcamp, early-stage funding from FactorE Ventures in 2018, generous support from the Rwanda Green Fund, USAID’s Development Innovation Ventures, Shell Foundation, the UK FCDO’s Frontier Technology Livestreaming fund, the New Zealand Government, and a loan from Blue Haven Initiative’s Catalytic Fund. Ampersand is now starting up its business in neighboring countries, starting with Kenya where there is a large addressable market.
All images courtesy of Ampersand
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