Newsroom > Blog
Browse more
Why We Invested in Roam: Investing in Roam to Electrify Africa's Transport Sector
By Renew Capital | Wed Jun 05 2024
Photo courtesy of Roam
As a result of increasing urbanization and the subsequent reliance on fossil fuels, Africa’s CO2 output per person has been growing faster than its population. Furthermore, the risk of climate disasters disproportionately affects low-income countries. The need for clean transportation options to service Africa’s growing urban populations is therefore critical to mitigating the impact of climate change.
Africa currently contributes less than 1% to global vehicle production and heavily relies on used vehicle imports. The market for electric vehicles (EVs) on the continent has a promising growth potential. It is expected to reach $21.39B by 2027, up from $11.94B in 2021 driven in part by the demand for electric buses and two and three-wheelers for public transport needs. However, the uptake of EVs has faced challenges due to underdeveloped infrastructure and electricity challenges in the region.
To tackle these challenges, Roam Electric is building affordable and eco-friendly electric buses and motorcycles that are designed and manufactured in Africa. Furthermore, Roam Electric is building solar charging infrastructure in Kenya to address the electricity challenges.
Renew Capital invested in Roam because of its strong founders, demonstrated traction and the company’s orientation towards growth.
Photo courtesy of Roam
Strong Founders
Roam Electric, founded in 2017 by Filip Lövström and Mikael Gånge, seasoned professionals in the energy industry, started as a research project at a Swedish university. Recognizing an opportunity in electric vehicles tailored for the African market, the company evolved its focus from conversions. After rigorous development, Roam Electric now produces electric motorcycles and buses, designed especially for emerging markets, with Kenya as its initial target.
These vehicles offer significant carbon emission reductions, with electric motorcycles cutting emissions by over 90% and electric buses by 80%. Roam Electric's commitment to sustainability garnered it recognition as a finalist for the prestigious Earthshot Prize in 2022.
The company's core mission is to provide sustainable transportation solutions for African markets, where reliance on public transportation is widespread.
Demonstrated Traction
Roam Electric has three main products designed to suit the East African market.
- The Roam Rapid Electric Bus has a range of over 360 kilometers (224 miles) and can seat up to 90 people. It is designed to carry passengers along major corridors and on routes such as airport transfers.
- The Roam Move Electric Bus is a smaller bus designed to compete with the traditional Matatu.
- The Roam Air is an electric motorcycle adapted for the local market, characterized by a dual battery with a 180 km (112 miles) range. It can be charged freely in any outlet where a phone can be charged, without infrastructure dependency. In July of 2023, Roam opened a plant in Nairobi with the capacity to produce 50,000 bikes a year.
Orientation Towards Growth
Roam raised $24M in a Series A round, including an up to $10 million debt commitment from the U.S. International Development Finance Corporation (DFC), to scale the production of electric motorcycles and buses. Equator, an Africa-focused climate tech venture capital fund, led the round. Other investors in the round include One Ventures, TES Ventures, The World We Want, One Small Planet and Renew Capital.
Roam and County Bus Service are planning to introduce 10 CBS electric buses by the end of 2024, and 200 CBS electric buses across Kenya by the end of 2026. Roam Electric has also partnered with various companies, including Bolt, which offers ride-hailing, micromobility rental, food and grocery delivery, and car-sharing services. Bolt's courier riders can purchase an electric motorbike at an affordable rate through the financing company MKOPA.
“We invested in Roam Electric because of its potential within the electric vehicle sector on the continent. Roam is focused on offering affordable EVs, but they have an eye for quality, which we found rare relative to alternatives. I, for one, love driving my Roam motorcycle around Kigali. Furthermore, the founders of Roam bring considerable experience from the energy industry to the table, and we are proud to support their vision.” — Matt Davis, founder and co-CEO of Renew Capital
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
Related Posts
