ARC Ride secures $5m to scale swap stations

From the newsletter

Kenyan electric motorcycle startup ARC Ride has secured $5 million financing from British International Investment (BII). The funding will be used to accelerate the expansion of ARC Ride’s battery swapping infrastructure which stands at 144 swapping cabinets, mainly in Nairobi. It will also be used to deploy 5,000 electric motorcycles to meet growing demand.     

• Development financiers such as BII offer debt at preferential interest rates and terms, especially for projects that have a strong developmental impact. This is key for African electric mobility companies, who have been struggling to secure funding to scale.

• Africa severely lacks charging and swapping stations for EVs. But firms that secure funding can develop such infrastructure relatively fast, and with it potentially market share.  

More details

• It has not been revealed if BII’s funding to ARC Ride was in the form of debt or equity. The firm, founded in 2019, has been steadily growing its network of swapping stations in Nairobi in select locations where demand for swapping is high. But competition is stiff, with other leading electric motorcycle firms like Spiro, Roam, and Ampersand also setting up their own stations.

• Despite the growing network of swapping stations in Kenya, particularly the capital Nairobi, interoperability remains a major bottleneck. Most stations are used exclusively by motorists that use motorcycles owned or supplied by the station provider. This is a big setback for the adoption of electric motorcycles, contrasting with fuel motorcycles which users can fuel at any retail outlet.

• ARC Ride’s expansion strategy has also been questioned by some observers, who believe the firm is tying up too much of its capital on setting up small automated swap stations instead of investing in a few well-positioned and high-capacity charging stations to better utilize their capital.

• At the same time, some electric motorcycle startups have started disrupting the market with new models that could lessen the importance of swapping stations in the long term. For instance, Zeno has launched the Emara electric motorcycle, which can be charged at home, at a fast charger or have its batteries swapped. This is likely to see more people charge their motorcycles at home.

• The market for electric motorcycles is growing rapidly in Kenya due to significant cost savings.  There are more than 1.2 million motorcycle riders in Kenya, most of who use petrol motorcycles and spend up to 40% of their daily income on fuel and maintenance. Electric motorcycles cut this expenditure by more than half, raising their daily take-home.

• This growth is increasingly attracting funding from investors, with the sector raising hundreds of millions of dollars in recent years in both equity, debt and grants from a growing pool of investors. In the first four months of 2025, mobility startups on the continent have raised $56.6 million from investors.  

Our take

• EV companies should embrace standardisation of battery swapping stations where batteries can be universally exchanged between different EV models and brands, regardless of the manufacturer. This is a crucial concept for the widespread adoption of battery swapping technology, particularly for electric two-wheelers and three-wheelers in Africa.

• Electric motorcycles that offer multi-modal charging options like Zeno’s Emara could gain market share fast by giving users flexibility to charge using a slow AC charger at home, a fast DC charger or swap the battery. 

• BII's backing, as the UK's development finance institution, signals strong international confidence in Kenya's e-mobility sector and ARC Ride's innovative approach. This could attract further investment, accelerating the transition to electric vehicles across the continent.