Watu (Swahili for people), the buy-now-pay-later firm, founded a decade ago by Latvian entrepreneur Andris Kaneps, is projecting revenues of 44 billion Kenyan shillings ($340 million) in 2025 after shifting its model from motorbike financing to smartphone lending. That would nearly triple its size in two years, a pace that raises as many questions as it does plaudits.
The topline growth looks impressive: gross revenues surged 67 percent in 2024 to 29.9 billion shillings ($231.4 million), driven by a flood of handset loans. But the fine print tells a different story. Net profit collapsed 85 percent to just $1.2 million, underlining the fragility of lending to low-income borrowers in markets like Kenya and Uganda. High defaults, thin margins and swelling operational costs are eating into the very foundation of Watu’s expansion.
Watu’s 2024 sustainability report paints an ambitious picture: 5,000 financed electric vehicles, two million smartphones, and a broader regional footprint. Yet the reality on the ground suggests that scale may not equal stability. The company’s active loan book nearly tripled last year to 1.9 million accounts, with plans for 2.3 million in 2025, almost 900,000 of them targeting women excluded from motorbike credit. But piling loans on vulnerable demographics risks repeating the cycle of indebtedness already visible in Kenya’s digital credit boom.
At the same time, Watu is cutting jobs—its workforce shrank 3.6 percent last year to 2,465—while leaning more heavily on digital channels to manage millions of small-ticket repayments. Competitors such as M-KOPA, Aspira and Ampersand are circling, offering similar financing with their own brand of aggressive growth. Watu’s claim of “impact” increasingly looks like a race to lock borrowers into recurring cycles of repayment, rather than a path to long-term financial mobility.
Since its founding in 2015, Watu has raised more than $20 million across five rounds, backed by investors including FMO, Gateway Partners, Verdant Capital and AHL Venture Partners. Its Series B in 2024 was framed as a milestone in African fintech. But as profits shrink and defaults climb, Watu exemplifies the tension at the heart of digital finance on the continent: innovation running ahead of regulation, scale outpacing sustainability, and social impact reduced to a line item in a fundraising deck.
For a company hailed as one of Kenya’s rare profitable startups, Watu’s pivot is less a celebration of financial inclusion than a test of whether Africa’s credit-led growth model can endure its own contradictions.