Honda backs Kenyan motorcycle-taxi financing start-up

In September, Honda Trading Corporation along with fellow Japanese outfit Skylight Consulting revealed a KES90m (US$743,000) seed investment in Unchorlight Kenya, which operates a rent-to-own motorcycle financing business, branded as Zaribee, in the East African country.

Unchorlight, which describes itself as a fintech company, provides two-wheelers to those making a living as motorcycle-taxi and last-mile delivery riders. The company collects part of riders’ daily income via digital payment. Once the motorcycle has been paid off – typically after 18 months – ownership transfers to the riders. Since its launch in 2021, Unchorlight has provided two-wheelers to more than 240 customers.

The start-up’s CEO Renji Morita previously worked as a buyer for Nissan Motor Corporation and this was followed by a short stint at Japanese venture capital outfit Uncovered Fund, which invests in African ventures.

While Honda Trading didn’t state the motivation for its investment, Riki Yamauchi, an Africa-Japan investment advisor, highlighted Honda Motor Company’s plans to introduce 10 or more electric motorcycle models by 2025 that could benefit from the partnership with Unchorlight. 

In recent years, several international automotive groups have invested in African tech-enabled mobility initiatives. Toyota Tsusho, the trading arm of the Toyota Group – through its Africa-focused corporate venture capital unit Mobility 54 – has backed over a dozen mobility-related start-ups. These investments include Tugende (like Unchorlight, it offers financing to motorcycle-taxi drivers in Uganda and Kenya through a lease-to-own model); Nigeria-based ETAP (involved in the digitalisation of car insurance services); and Kenya’s Data Integrated (provides a public transport management system and digital payment solutions for transport operators).

In Rwanda, Volkswagen has rolled out its own ride-hailing app and has indicated plans to launch a car-sharing solution, similar Zipcar in the US. In 2019, the German automaker, in partnership with Siemens, also unveiled a pilot project to assess the viability of electric cars in Rwanda. It has installed charging stations and introduced several e-Golfs in the market.

Japan’s Suzuki signed a memorandum of understanding in August with Nigerian-founded Moove, which provides financing to ride-hailing, e-logistics and instant delivery drivers in several African countries. The start-up has developed an alternative credit-scoring system by using performance and revenue data from platforms such as Uber to underwrite loans to customers. Through Moove’s drive-to-own model, customers receive financing of up to 95% of the purchase price of new vehicles, which they can choose to repay over 24 to 48 months.

 

References

‘First for Africa: Volkswagen and Siemens launch joint electric mobility pilot project in Rwanda’, Volkswagen, 29 October 2019

‘Moove signs MoU with MUFG and Suzuki to promote financial inclusion for mobility gig workers globally’, Moove, 29 August 2022

‘Investment in Unchorlight Kenya Limited’, Honda Trading Corporation, 30 September 2022

‘Kenya’s BNPL startup for motorcycle taxi riders secures $623K from Japanese companies’, The Bridge, 30 September 2022

‘Unchorlight Kenya raises Ksh 90 million in seed round’, Unchorlight Kenya Limited, 30 September 2022

‘Honda Trading makes first African startup investment’, Global & African Market, 11 October 2022