Q&A: Spiro CEO Kaushik Burman on raising new capital

From the newsletter

Electric motorcycle company Spiro is set to raise new capital to fuel its rapid expansion, says CEO Kaushik Burman in an interview with Mobility Rising. The company has raised $120 million to date. “We will be closing the next round very soon,” he says. Spiro has sold more than 35,000 motorcycles, making it Africa’s largest electric motorcycle company. 

• Spiro has raised capital from several sources in recent years, mainly debt. This includes a $50 million loan from the African Export-Import Bank (Afreximbank), a $63 million loan from Societe Generale, and an undisclosed amount from the African Fund for Transformation and Industrialization (ATIF).  

• In a wide-ranging interview, Mr Burman reiterated the importance of electric mobility companies working together to build an elaborate charging and swapping ecosystem to support the sector’s growth. “It requires a village to raise a child,” he says. 

More details

How did Spiro become a leader in electric motorcycles in Africa?

Mr Burman: The start point was in West Africa in 2022 where we set up in Benin and Togo with a few thousand bikes and battery swap stations. Since then, we have now expanded to eight countries in Africa, of which four are in the east, which is Kenya, Uganda, Rwanda, and Tanzania, and four of them in the west, which is Benin, Togo, Nigeria, and Cameroon. We are the fastest growing electric mobility company in Africa, but most importantly, we are the largest battery swap operator in Africa with over now close to 550 battery swapping stations. And we have crossed close to about 20 million battery swaps across 35,000 bikes, which have kind of got in the market.

Spiro has raised some significant capital for expansion in recent years. Is there a new capital raise in the pipeline?

Mr Burman: We continue to be on the journey for capital raise. We have invested north of $120 million in Spiro thus far. There is a very strong commitment from our board. There are plenty of good conversations happening as we speak. People want to see the scale, which is why Spiro is demonstrating scale. People want to see whether Spiro's core strength is people. So we've got some of the best people in the business. And that is going to give more confidence to investors coming in. We will be closing the next round very soon. 

Who are Spiro’s target customers?

Mr Burman: Our customer segment is the commercial delivery segment, the bodaboda segment, the Okadas, who use these bikes for all types of deliveries. They do anywhere close to about, depending from market to market, 120 to 150 kilometers of daily driving every single day and they use Spiro’s battery swap network. As a result of the cost savings, it is almost 25% to 30% cheaper than owning a gasoline bike, plus obviously the impact on the environment.

Out of your eight markets, which are the biggest and the most promising in terms of growth?

Mr Burman: All the markets are scaling up quite fast. In every market now that we are operating, we have the largest fleet of bikes. If you look at Kenya, we have deployed more than 4,000 bikes. In Rwanda, by the end of this month, we will have crossed more than 5,000 bikes. Uganda, we are today at about 2,000 bikes and scaling rapidly. Kenya, Rwanda are obviously the larger markets in the East. Nigeria is also a big one. Nigeria, as you know, is the biggest, largest country so we will try and scale in Nigeria rapidly. And the other markets are also adding up like Tanzania, where we've just signed up multiple dealers. It is the same in Cameroon, where we have a huge pipeline of dealers. People really like the products. They like the Spiro ecosystem. We're building an ecosystem.

But this is not an individual company effort. There's a famous saying that it requires a village to raise a child in a very similar way. You know, we (Spiro) can't do everything ourselves. We work with multiple partners across multiple countries. And our goal is to bring affordable and accessible mobility in Africa. Affordable and accessible, clean mobility. 

What informed Spiro’s expansion into East and West Africa, and could we see a similar strategy for North and Southern Africa?

Mr Burman: Obviously, it's a timing and a sequencing game. We will very much be interested in expanding in North and Southern Africa. Efforts are underway right now as we speak. But if you look at East and West Africa, these are markets where there's a huge population of bodaboda drivers using gasoline bikes.

Our goal is to substitute gasoline bikes with electric mobility options. We have chosen those markets where there is already existing demand for electric options. And also, if you look at Kenya and Rwanda, specifically Rwanda, the government has launched very progressive policies, which will foster EV adoption.

For example, the mandate which the Rwandan government came out with early this year to ban ice bikes for commercial use is a massive policy thrust. Because what the government is clearly saying is, here is a mandate, build the infrastructure and substitute ICEs with EVs.

What is Spiro’s total production capacity, and on the back of increased demand for electric motorcycles, could we see more investment into new production facilities?

Mr Burman: We've got four operational plants, Kenya, Uganda, Rwanda, and Nigeria. In each of these plants, the production capacity can be around approximately 50,000 units per year. And we have enough and more flexibility to go up to 100,000 production per year in each of these markets.

You have a wide network of battery swapping stations. What is your expansion strategy, and does it involve investing in new stations outside major cities?

Mr Burman: Our plan is to scale in every urban location, which is essentially where the commercial activity is happening. Our customer segment is the commercial driver, the bodaboda driver. And his requirement, see for us it's to study the customer need and basically build infrastructure where the customer will use it. So irrespective of whether it is a city or slightly further down from the city to country locations or tier two, tier three towns, we will build the infrastructure.

For example, in Rwanda now we have already installed 100 battery swap stations, which is the highest. So in the next few months, you will see that across the country of Rwanda, we will be present.

Similarly, in Uganda, we will be present not only in Kampala. 70% of commercial activity happens in Kampala, but we are already expanding our network to Jinja, to Mbarara. Similarly in Kenya, we are present in the West, South, and the East. We have to cover the North, which we will do.

There’s debate over which model between battery swapping and charging is ideal for motorcycles. Spiro has chosen the swapping model. What informed this choice?

Mr Burman:  have spent a lot of years in Southeast Asia, Asia broadly, and in other parts of the world. I can tell you with 100% confidence that the B2B segment, which is a commercial delivery segment, cannot just operate on fixed charging or fast charging or home charging. It doesn't work, because they are doing almost 12 to 14 hours of driving. For them, the biggest concern, as I said, is if I'm using a gasoline bike, I know where to go and fill up with gas. I know that every two kilometers, I'll find a gas station. Will I have similar convenience if I switch to electric?

So when your battery swap station can pop a fully charged battery in less than 90 seconds, or in some cases even less than 60 seconds, your waiting time is far lower than even a gas station. That's point number one.

Point number two is you have to understand that fast charging and home charging, even home charging of the batteries can take up to six to eight hours. And a lot of bodaboda drivers don't even have stable electricity in their homes. And even if they have, they don't have enough space to keep those heavy batteries and charge them.

If something happens and the battery cancels fire, who's responsible? How will they solve that issue? So for the B2B segment, this home charging business, fast charging business doesn't work. 

You launched the Spiro Academy in Kenya last year. What is the purpose of the Academy? 

Mr Burman: Our higher purpose is to create a lot of local value in Africa. And to do that, we have launched the academy, which I think of it as a university in itself, where we are retooling and upskilling local communities, and from colleges, from universities, from people who are coming from unskilled labor also, to equip them with the right tools and content, which helps them get absorbed in Spiro, whether it is in manufacturing or energy network or sales. That is one very, very important part of my higher purpose. And that is something which is also being absorbed in this organisation, enterprise-wide, people are putting in their efforts.