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Watu Credit, a Kenyan asset-financing startup known for funding motorcycles, tuk-tuks, and smartphones across Africa, reported a record KES 4.8 billion ($37 million) net profit for the year ended December 31, 2025.
The Nairobi-based company’s profit surged from KES 157 million ($1.2 million) in 2024, representing a 14-fold increase in earnings.
Revenue also grew strongly, rising 92.7% to KES 28.3 billion ($219.2 million), according to disclosures by Car & General, which owns a 29% stake in the company.
Smartphone financing business powers Watu’s recovery
The strong performance was largely driven by rapid growth in Watu’s smartphone financing division, Simu, which has emerged as one of the company’s fastest-growing business segments.
“Watu has continued to make progress with growth throughout the region,” Car & General said in its annual report. “Performance in 2025 continued to improve on the back of Simu growth through the region.”
Simu allows customers to purchase smartphones through installment payments, helping expand access to internet-enabled devices across African markets where upfront handset costs remain unaffordable for many consumers.
As smartphone adoption rises across the continent, financing models like Simu are becoming increasingly important in bridging the affordability gap and accelerating digital inclusion.
Phone financing offsets pressure in mobility business
Growth in smartphone financing helped offset challenges in Watu’s traditional mobility financing business, which primarily funds motorcycles and three-wheelers used by informal transport operators, commonly referred to as boda bodas in Kenya.
While the mobility segment remains central to Watu’s operations, changing consumer demand and rising smartphone penetration are pushing the company to diversify its financing portfolio.
The expansion into handset financing also aligns with broader trends across Africa, where access to smartphones is increasingly linked to financial inclusion, e-commerce participation, and digital service adoption.
Watu rebounds after difficult 2024
The 2025 results mark a significant recovery for Watu after a challenging 2024 financial year.
In 2024, the company experienced an 85% decline in profits due to rising loan impairments, foreign exchange losses, and expansion-related costs across multiple African markets.
Currency depreciation, particularly in Nigeria, alongside increased credit risk in Kenya and Tanzania, placed pressure on profitability during that period.
However, Car & General said the company’s regional operations have since stabilised.
“In 2026, we expect revenues to grow in Kenya, Uganda, Tanzania, DRC, Nigeria, and Sierra Leone, where operations have now stabilised,” Car & General said. “We are very positive about business prospects and expect continued growth this year.”
Watu expands across Africa and beyond
Watu has aggressively expanded beyond Kenya in recent years, building operations in Uganda, Tanzania, the Democratic Republic of Congo, Nigeria, and Sierra Leone.
The company has positioned itself as one of Africa’s largest non-bank asset financiers, serving customers who often lack access to traditional banking credit.
Its business model focuses on financing productive assets and consumer devices using flexible repayment structures tailored to underserved markets.
In September 2025, Watu told TechCabal that it was targeting $340 million in revenue by 2026 as part of broader international expansion plans that include entry into Latin America.
Investors shift focus toward profitability
Watu’s improved financial performance comes at a time when investors are placing greater emphasis on profitability and sustainable growth among African fintech and lending startups.
Following a slowdown in venture capital funding across the continent, startups are increasingly under pressure to demonstrate stronger unit economics, operational efficiency, and long-term viability.
For Watu, the sharp rebound in earnings signals that its diversification strategy and regional expansion may now be translating into more stable financial performance.
What Watu’s growth means for Africa’s fintech sector
The company’s results highlight the growing role of asset financing and embedded credit in Africa’s digital economy.
As smartphone penetration rises and access to traditional credit remains limited, financing platforms that enable consumers to spread payments over time are becoming critical infrastructure for digital adoption.
Watu’s rapid growth in phone financing also reflects a broader convergence between fintech, mobility, and consumer technology across African markets.
If the company sustains its momentum, it could strengthen its position as a leading player in Africa’s evolving asset-financing ecosystem while expanding deeper into emerging markets globally.
