Spiro partners with India’s PG Electroplast

From the newsletter

Africa's leading electric motorcycle company, Spiro, yesterday entered into a partnership with PG Electroplast, a leading provider of electronics manufacturing services in India. The partnership will see PG Electroplast manufacture electric vehicles and lithium-ion batteries in India for the African market. 

• Spiro will focus on research and development, marketing, sales, and distribution to enable PG Electroplast to capture Africa's emerging EV market. 

• This partnership is particularly relevant to PG Electroplast considering Spiro's market dominance in Africa. It has sold over 20,000 electric motorcycles, operates in 11 African countries, and continues to expand.

More details

• Spiro has raised over $130 million in funding since its inception. About six months ago, it raised a whopping $50 million in debt. It is currently present in Benin, Togo, Nigeria, Kenya, Rwanda, Uganda, Ghana, Cameroon, the Democratic Republic of the Congo, Angola, and Tanzania.

• The partnership will be mutually beneficial. PG Electroplast brings manufacturing expertise, and Spiro brings market knowledge.

• At the signing of the partnership, both parties expressed optimism. Spiro Mobility's CEO, Kaushik Burman, believes the partnership will drive mutual growth and expand the EV ecosystem in emerging markets. Vishal Gupta, Managing Director (Finance) of PG Electroplast, sees this as a strategic move to capitalise on the growing demand for EVs in emerging economies.

• One challenging aspect for African startups in the EV sector is the lack of in-house technology. Most rely on products manufactured outside Africa. Some are partnering with foreign companies to localise manufacturing, while others are outsourcing from foreign companies that manufacture them and then importing the components for assembly. Batteries in particular remain a component that is exclusively imported.

• Five months ago, we saw Ampersand partnering with BYD to manufacture and supply 40,000 batteries for its electric motorcycles as it gears to ramp up production.

• Spiro has entered into several partnerships, including those with financing companies. It has partnered with Mogo and Watu Credit to provide asset financing loans to electric motorcycle customers.

Our take

• Foreign companies often design and export their products to the African market without considering the unique local context and usage patterns. Spiro, with its established presence and understanding of the African market, brings valuable knowledge to this partnership. This, combined with PG Electroplast's manufacturing expertise, will likely result in a product that is well-suited to the African market. Additionally, the partnership could potentially lower battery costs by shortening the supply chain.

• Many African EV startups lack the capital to invest across the entire supply chain and often choose to outsource certain components. This is a common strategy for reducing costs and allowing companies to specialise in their core competencies. And this should be a lesson to newcomers.

• No company is an island, and collaboration is essential, especially in a new market like e-mobility. While there are challenges, they can be overcome through strategic partnerships.