(Yicai) July 14 -- Spiro, the largest electric two-wheelers company in Africa, will continue developing its battery swapping infrastructure in Africa at full speed, backed by multiple investors, including Chinese growth-stage investment fund NewTrails Capital, according to its founder, Gagan Gupta.

Spiro bagged USD270 million in a recent fundraiser, including USD55 million from NewTrails. "We have come to a situation whereby we have established a solid track record, with 100,000 swaps happening on our network every day, allowing us to attract more capital and build the infrastructure out." Gagan Gupta, who is also chairman of private capital firm Equitane, said in an interview with Yicai. 

The infrastructure is built to solve a specific problem, which is unreliable access to charging in markets where grid power is not always dependable, Gupta noted. Spiro addresses that in some markets by installing its own solar generation and battery storage at swap stations, rather than depending solely on the grid, he pointed out.

Spiro operates more than 2,500 swap stations, according to the Dubai-based company. Its battery swapping network spans seven African countries, supporting more than 100,000 electric motorcycles.

The Spiro investment is one of several NewTrails has made across emerging markets in electric mobility, battery-swapping, and digital payments, according to the Chinese firm, which has offices in Shanghai, Shenzhen and Nigeria.

Spiro has "the potential to grow into an infrastructure-like business," said Zhang Yufan, a founding partner of NewTrails. It has "systematically integrated vehicles, batteries, energy replenishment, payments, and service networks into a solution that is truly tailored to the needs of African users." 

As "a Chinese fund committed to investing in Africa's energy transition and green technology," NewTrails is "encouraged to see Chinese supply chains and financing playing an increasingly important role in this process," Zhang stressed.

Chinese Supply Chains and Localization

Chinese companies already anchor Spiro's supply chain, including Hon Hai Precision Industry, the Taiwan-based Apple supplier better known as Foxconn, as its component supplier and Contemporary Amperex Technology's unit BAK as its battery partner, Gupta said. Two Chinese suppliers are exploring building battery plants inside Africa, which could be "truly transformational" for Spiro from an assembler of imported parts toward a more homegrown value chain, he stressed.

"You cannot have a situation where you do not have jobs in Africa, and you're importing finished products. That is not sustainable," he said. Spiro is targeting 85 percent to 90 percent of total value-added produced on the continent by next year, he noted.

In addition, Spiro and Equitane are in talks with NewTrails to launch a joint "new energy infrastructure fund" that would invest in Chinese and African companies, with early discussions with firms in "Internet of Things, e-trucks, batteries, everything to do with new energy infrastructure," Gupta said.

Equitane's industrial-zone platform, Arise IIP, operates across 17 African countries, he noted, adding that having a Chinese shareholder "solidifies the relationship with our existing supply chain partners" and could help smaller manufacturers relocate production from China to Africa.

A similar pairing of Chinese technology with an African battery swapping infrastructure developer happened in 2023, when Chinese e-mobility firm Tailg Group linked arms with Ghana's Kofa to co-develop an e-motorcycle, with plans to deploy 200,000 units on the latter's swap network by 2030. 

NewTrails has also invested in Ofero, an electric two-wheeler brand from Southeast Asia that has expanded to over ten countries, including Kenya.

Competitive Landscape

Rwanda's Ampersand and Kenya's MAX have also drawn fresh capital, with the former recently securing new equity and working-capital financing to expand its fleet to 13,000 electric motorcycles, while the latter raising USD24 million to finance the deployment of 120,000 electric motorcycles. Roam, Zembo, Kiri EV, and Stima are some of the other players on the market. 

In addition, Ampersand has signed a memorandum of understanding with Chinese new energy vehicle and battery giant BYD, under which the latter will become its primary battery cell supplier, supporting the production of around 40,000 e-motorcycles by the end of this year.

Gupta played down the competitive threat, comparing Africa's EV market to China's crowded field of automakers. "When you go to a five-star restaurant, you can't be the only one eating; there are other guests.

"The market is massive. We alone can't do it. We need more and more people to come and do it," Gupta stressed, noting that Spiro's main competitor is fuel bikes, which take more than 90 percent in the firm's core markets. 

"I always believe that you have to build businesses that will solve problems for people," he said. "Africa is not a market where you can go and create things and sell people what they don't need. You have to build things that people need, which will change their lives.

"My belief is in two years, EV will be massively used," Gupta said, adding that he expects e-motorcycles to account for 50 to 60 percent of new bike sales across Spiro's markets within that period, up from roughly a quarter to a third in some countries.

What ultimately drives the business are the riders, Gupta noted. "In the end, you are able to ensure that the bottom-of-the-pyramid rider is able to make one or two dollars extra per day," he pointed out. "He can have better food, he can send his children to school. That's a massive impact, and that is what drives us to do this."

Editor: Martin Kadiev