AMPERSAND RAISED $19.5MN. MY TAKE

• Ampersand raised $19.5 million in equity and debt financing

• Ecosystem Integrity Fund, Acumen & Hard Edged key investors. Integrity Fund led Ampersand’s Series A round which raised $3.5mn

• Latest financing includes a SAFE round from Rwanda’s petroleum products distributor Societe Petrolieres du Rwanda & TotalEnergies.

• SAFE or Simple Agreement for Future Equity, means that investors committed that they will turn their investment in Ampersand into equity at a future price. These instruments are becoming popular.

It already looks like e-bike startup, Ampersand started 2024 on a good note. Before the close of 2023, the startup announced that it had completed its latest funding round during which they raised $19.5 million in equity and debt funding.

That is a remarkable fit for a startup that only a few years ago was testing its model out of a small garage in the capital Kigali.

I first met Josh Whale, the company’s founder, in 2018 long before they commercialized their business model. I met Josh when I was working on a story for a local publication I was working for at the time. He alongside other engineers were in a small garage in a suburb piecing together battery components that would later be used to roll out the first electric motorcycles in Rwanda.

The idea, he told me then, was simple: transform Rwanda into a mass market for commercial electric motorcycles and gradually expand to other markets in the region such as Uganda and Kenya. A key piece in this story was to come up with a battery technology that was durable and embraced by the market.

Josh was convinced that in a market like Rwanda where commercial taxi motorcycles rely on expensive fuel, e-Motos were an option to reduce operating expenses and hopefully drive transport fares down.

Ampersand may have not yet achieved the target of making e-motos a go-to alternative for every rider or helped drive down transport fares in the market, but the startup is surely on the right track. 

To create product differentiation, Ampersand was well aware that they needed a cost-effective model that can create a product which can compete directly with the existing products on the market. That meant being cautious of pricing of their final e-motos.

The truth is, operating existing fuel-powered two-wheelers was expensive. In 2018 when I had a chat with Josh, two-wheelers were making 190 kilometres on average a day and fuel was costing about $5.60 (Rwf4,951.8) a day on average, a price that has since spiked to record highs. Definitely not the cheapest in the world. As a result, riders were struggling to make ends meet.

On the other hand, the prices of batteries were declining. This gave confidence to the startup that the prospects were naturally high. Even early institutional investors such as Factor[e] Ventures had high hopes that they deployed their techno-economic modelling to refine the e-Moto offering and business model.

 There are about three things that stand out in this story for me.

• Choice of the market

One thing that Ampersand got it right was the choice of the market to pilot their idea. Generally, the ideal market for electric motorcycles and vehicles is one where petrol is very expensive and where there is high density of motorcycles and vehicles that are running a lot of distances every day.

In Rwanda, motorcycles make up the majority of public transport and almost everyone uses them to move from one point to another. This, therefore, made sense for proprietors of Ampersand to choose Rwanda as a perfect location to test.

But that’s not all, Rwanda has been heavy on green agenda that the government has put in place policies that allow for a smooth green transition. An exciting element in this is the establishment of the Rwanda Green Fund to support ventures like Ampersand that are deploying environmentally friendly businesses models. 

• Research

The question that always arise for startups is how do you launch a product without doing extensive research. Even when market research is done, it is conducted on the surface to convince investors that their products work perfectly. Very few startups will spend more time trying out their solutions and products before they roll out.

Ampersand was different. When I met Josh in 2018, they had spent more than two years conducting research and development to analyse the pricing, driver preferences, political and market conditions, but also perfect the technical aspects of the battery technology they were hoping to introduce to the market.

During that time, Ampersand surveyed more than 50 taxi motor operators in Rwanda, covering the cost of maintenance and how much rider spend fuel consumption. They researched the type of common motorcycles being used, the engine size, the type of battery and what it could take to produce a motorcycle that can compete directly with the existing one.

As they say, the rest is history. 

• Team work

The last aspect about Ampersand’s story is building a team. The startup knew from the commencement that they needed a strong team of people to build a lasting solution. Many may not be aware, but Ampersand was founded by four individuals – Josh Whale, Emmanuel Hakizimana, Olaf Lange, and Alp Tilev.

I had a chance to interact with Emmanuel Hakizimana, a Co-founder and Ampersand’s Electrical Engineer who told me why it was important to collaborate with his peers on a project like that. Hakizimana was convinced that given the amount of time they had spent conducting R&D, they would come up with a product that was highly competitive on the market.

About the latest funding round

The $19.5 million venture capital round was led by Ecosystem Integrity Fund (EIF). Other investors include Acumen and Hard Edged Hope Fund.  Ampersand also secured a $7.5 million debt facility from Cygnum Capital’s Africa Go Green Fund.

This round also includes a successful S.A.F.E. round with investors such as Alphamundi VC, Societe Petrolieres du Rwanda, TotalEnergies, EIF and Beyond Capital Ventures raised over recent months.

You can’t miss it:

Societe Petrolieres du Rwanda (SP Rwanda) is the largest provider of petroleum products in Rwanda with a network of 63 fuel stations nationwide as well as bulk deliveries to their commercial and exportation throughout the region. The company recently expanded its operations to Tanzania.

This is the first known startup investment that SP Rwanda has made. It speaks volume of the potential that local investors are seeing in Ampersand.

According to Ampersand, as of December 2023, it serves 1,700 electric motorcycle riders with battery swaps. These customers together cover 1.4 million km every week in Kigali and Nairobi, powered by 140,000 monthly battery swaps.

The company’s motorcycles have travelled a combined 180 million kilometres and avoided 8,000 tons of carbon emissions.