Kenya’s Watu posts record $37 million profit on phone financing explosion

Watu Credit, a Kenyan asset-financing startup known for funding motorcycles, three-wheelers, and smartphones across Africa, posted a 14-fold increase in earnings in 2025, driven by rapid growth in its phone-financing business, which boosted revenue and lifted profitability.

The Nairobi-based company reported a net profit of KES 4.8 billion ($37 million) for the year ended December 31, 2025, up from KES 157 million ($1.2 million) a year earlier. Revenue rose 92.7% to KES 28.3 billion ($219.2 million), according to disclosures by Car & General, which holds a 29% stake in the business.  

The results mark a recovery for Watu after a difficult 2024, when profits fell 85% amid rising impairments, foreign exchange losses, and expansion-related costs across several African markets.

“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, the company’s smartphone financing unit, has become one of its fastest-growing businesses as demand for financed handsets rises across its key markets. The model allows customers to acquire smartphones through installment payments, widening access to internet-enabled devices in markets where upfront costs remain high for many consumers.

The strong growth in phone financing helped offset pressures in Watu’s traditional mobility business, which finances motorcycles and tuk-tuks used primarily by informal transport workers, commonly known as boda bodas in Kenya.

Watu has expanded aggressively in recent years beyond Kenya into Uganda, Tanzania, the Democratic Republic of Congo, Nigeria, and Sierra Leone. But that regional expansion came at a cost. In 2024, the company was hit by currency depreciation in some markets, particularly Nigeria, as well as higher loan impairments in Kenya and Tanzania.

Car & General now says operations in Watu’s newer markets have 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.”

The improved performance comes as investors scrutinise profitability among African fintech and lending startups following a slowdown in venture capital funding. Watu, which has positioned itself as one of Africa’s largest non-bank asset financiers, told TechCabal in September 2025 that it was targeting a $340 million revenue in 2026 as it expands into Latin America.