Let’s Go! Tugende Closes $780k to Kickstart 2015 Growth

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Tugende, a for-profit social enterprise based in Uganda, gained $780,000 in additional growth funding and working capital in an investment round started in 2014 and closed in January, CEO Michael Wilkerson announced today.

Tugende (www.tugendedriven.com) offers an affordable lease-to-own model to help motorcycle taxi drivers own their own motorcycles in 18 months or less instead of renting indefinitely. Payments are comparable to what drivers would otherwise pay in rent, and ownership significantly increases income, job security and road safety for drivers.

Investors in the round, which consisted of equity and debt, included the Segal Family Foundation, a private foundation supporting social enterprises in 23 African countries, and Echoing Green, one of the oldest and most respected funders of early stage social enterprises. A number of private angel investors, including previous Tugende investors, also participated. Closing the investment round capped off a strong 2014 for Tugende which included the highly selective Echoing Green award, and major growth in key areas including revenue, customers and staff.

“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.”

For the past 27 years, Echoing Green has invested over $36 million in in seed-stage funding and strategic assistance in more than 600 world-class leaders driving positive social change in over sixty countries. Echoing Green Fellows include the founders of Teach For America, City Year, College Summit, Citizen Schools, One Acre Fund, and SKS Microfinance.

Tugende’s combination of a business model on its way to profitability and social impact which doubles income for customers has been a major factor in attracting investors.

“We mostly invest in non-profits, but Tugende is a great example of the potential for massive impact and strong returns in the for-profit arena,” said Martin Segal, Executive Director of the Segal Family Foundation. “We have followed Michael and his team since 2012 and were excited to take an equity position in 2014.”

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.

“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 estimates a market of approximately 400,000 people making their living with motorcycles in Uganda, and many more in neighboring countries like Kenya, Rwanda and Tanzania. In 2014, Tugende grew 300% to over 700 active customers with most in Uganda’s capital Kampala and a promising expansion into Mbarara, a major trading hub in Western Uganda. More than 200 additional customers have already paid off leases with Tugende and taken ownership.

“It’s clear from a moral standpoint that the drivers, not whoever they rent from, should benefit more from their own risk and labor.” Wilkerson added. “But ownership also has immense ripple effects for communities and the economy by helping drivers invest more in their families and futures. Owners think longer term–including in the way they drive–and accumulate assets so they can lift themselves up the economic ladder.”

The majority of new funds are being used to finance additional leases and meet demand from Tugende’s long customer waiting list. The company has also started investing in opening new locations, new executive hires, and better technology to provide a foundation for even more rapid growth in 2015 and 2016.

Tugende’s new investment follows an earlier round of $300,000 closed in December 2013. The majority of investors in that round were impact-oriented angel investors, with many drawn to Tugende through the Unreasonable Institute, an incubator for for-profit social enterprises. Tugende was an Unreasonable Fellow in 2012, under its original name “Own Your Own Boda.” The name was changed to Tugende in February 2013.

Tugende means “let’s go!” in Luganda, the main local language in Kampala, as well as a number of other East African local languages and is commonly used when boarding “boda boda” motorcycle taxis. The company was originally founded in 2010 as a way to invest in favorite drivers, and started rapid growth in 2012 after Wilkerson returned to Uganda to focus on Tugende full-time.

More information:

Tugende

www.tugendedriven.com

Sample Customer profile: http://blog.tugendedriven.com/customer-profile-brian-kirunda/

2 Page Fact sheet (click for link)

info@tugendedriven.com

 

Echoing Green:

www.echoinggreen.org

Media: http://www.echoinggreen.org/about/media

Tugende Profile: http://www.echoinggreen.org/fellows/michael-wilkerson

Press contact:

Janna Oberdorf

janna@echoinggreen.org

 

Segal Family Foundation

www.segalfamilyfoundation.org

info@segalfamilyfoundation.org

 

Unreasonable Institute

www.unreasonableinstitute.org

Tugende Profile: http://unreasonableinstitute.org/stories-of-impact/tugende/

Press Contact:

wisdom@unreasonableinstitute.org

Customer Profile: Brian Kirunda

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Tugende customer Brian Kirunda is 14 months into his Tugende lease, and on his way to ownership. We caught up with him recently to talk about how he entered the industry, why he chose Tugende, and what he plans to do after becoming a full owner of his own motorcycle. 

How did you start riding a boda boda?

I’ve been riding a boda boda for 4 years. I stopped school in 2005 in Senior One because my dad died and my mom didn’t have enough money at the time. I was in Jinja, so I started digging on a farm, but a guy hired me to work as his houseboy in Kampala. My responsibilities were mopping the house, fetching water, making juice, watching the gate.

I wanted to be like that guy, my boss, because he was very rich. I wanted to buy my own plot in the village and build a house.

In 2007, I started working at a chapatti stand on the side of the road. I saved money for 7 months and started my own stand–I had to buy a table, frying pan, all the materials. One day a boda guy came and told me he was selling his bike–it was very old so the price was low. I hired another worker to make chapattis and started riding boda boda.

At first it was hard, because I didn’t know the prices or the locations most customers wanted to go. At first I thought I would save some money and go back to school, but then I got another plan to save money for a bike and to buy a plot of land.

Why did you apply for a motorcycle from Tugende?

I had a bike that I was paying off to another boss. But I recommended another driver to the same boss, and he lost the bike. The boss arrested me and said that because I brought the friend I was responsible. Instead of letting him take me to prison I agreed to give him back the motorcycle I had almost paid off. Then I needed a new motorcycle.

I had seen these bikes with the letter “T” behind [Tugende has a metal “T” above the number plate] but I didn’t know what they were. My friend told me that there was a company offering motorcycles and luckily enough it was near my stage. I saved some money to pay the initial deposit and my mother also helped me by selling three goats in the village.

When I came to the office, I liked the rules, like not driving at night, because that can save your life. I also like the focus on good driving. It is better to spend a long time [on one trip] than to spend a long time recovering in the hospital.

The weekly payments were fair because I was paying almost as much to my other boss but the bike was old and it didn’t have a helmet, license or metal guards. Tugende is also flexible with me when I tell them I’m sick, I just have to catch up on payments later. I’m also excited because Tugende is now helping me get my driver’s permit.

What do you plan to do after owning your own motorcycle?

First of all I’m planning to thank this company, Tugende, for what I will be. I already use some of my extra money to help my mom with my sister’s school fees, and I will increase on that, and building my own house in the village.

Next I’m planning save more money every day because I won’t have to pay anyone. That’s why I make good maintenance on my bike, because I know what I want. I’ll use that money to buy another new bike and help my family eat fish or meat every weekend. After getting the new bike, it will help make even more money and start looking for an even better business. Maybe I can become a chicken farmer.

I want the boda boda industry to help me save capital, not be my job for another 40 years or forever. When you are old, you don’t have balance. But for now, this is the best way to build my savings.

Tugende is Hiring!

Tugende is growing and we’re looking to hire amazing people to join our team.

If you love Tugende and want to get involved, please take a look at the detailed job descriptionsand apply ASAP! (Click here for PDFs of all job postings in Google Drive.)

Chief of Staff: Enhance the overall effectiveness of the CEO and providing strategic vision, planning and implementation of overall company goals and strategic projects.

  • Click here to view PDF of complete job posting with instructions.
  • Click here to view complete job posting with instructions on this blog.

Director of Finance: Experienced finance professional with financial modeling and analysis skills to manage a small and growing team, contribute to strategic decisions and help represent the company externally.

  • Click here to view PDF of complete job posting with instructions.
  • Click here to view complete job posting with instructions on this blog.

Field Officer: The Field Officer is the main point of contact between Tugende and its clients. This role is responsible for a client’s lease approval process, from the initial class to final boda payment, cancellation or loss recovery.

  • Click here to view PDF of complete job posting with instructions.
  • Click here to view complete job posting with instructions on this blog.

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We’re Hiring! : Field Officers

Mission: The Field Officer is the main point of contact between Tugende and its clients. This role is responsible for a client’s lease approval process, from the initial class to final boda payment, cancellation or loss recovery. The Field Officer’s day-to-day responsibilities include conducting Tugende field operations (e.g. vetting, impounding, cancellations, loss recovery, etc.), managing collections, and responding to client needs. All positions are in Kampala. However, we are particularly interested in hiring field officers who speak languages from the areas of Hoima, Jinja, Masaka, Mbale, Gulu, Mbarara and may be willing to relocate there in the future.

How to apply: Email jobs -AT- tugendedriven.com with your CV (or resume) and cover letter. Be sure to let us know why you want to join Tugende in this capacity and why you think you’re the perfect fit for the job!

Deadline: Thursday, 14th February, 2015

Location: Kampala

Click here to view PDF of complete job posting with instructions.

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