Earlier this week, Kenyan electric mobility startup ARC Ride raised $33.3 million in a mix of equity and debt. The round was co-led by Novastar Ventures and Norrsken22, with participation from DFIs including the IFC, British International Investment (BII), and Proparco, alongside two listed companies. The total figure includes $10 million in debt financing from BII’s Kinetic programme and Mirova, marking one of the largest EV funding rounds on the continent this year.

While rapid expansion has squeezed margins across the African EV landscape, ARC Ride’s blend of DFI patient capital and strategic debt gives it substantial runway. Yet CEO Joseph Hurst-Croft sees the company’s trajectory as fundamentally distinct from its peers. In an exclusive interview, Hurst-Croft spoke with Launch Base Africa’s Udoh Charles Rapulu about navigating the company’s growth since 2019 and scaling in a fast-evolving market.

LBA: Congratulations on the latest fundraise, Joseph. The round was led by Novastar Ventures and Norrsken22, with participation from DFIs. How did you identify these investors, and what made them the right fit? What was the most challenging part of structuring the capital stack?

JH: Thank you. To begin with, building large-scale infrastructure requires you to be very strategic about how you layer your capital. As you say, it’s not always easy bringing together VCs and DFIs. We actually also had two listed companies participating — including Musashi Seimitsu out of Japan. So we’re in quite a unique position in our Series A, having listed businesses, VCs, and DFIs coming together.

I think that represents the scale of what we’re trying to achieve. We wanted the dynamism and vision to grow quickly with the VCs, the deep pockets of the DFIs, alongside the strategic processes that the listed companies bring. Working with Musashi, they’ve not only invested money, they’ve invested people to improve our processes to really scale. We’re effectively looking to get the best out of all of them as we build that capital stack together.

LBA: You also secured a $10 million debt facility from BII and Mirova. How does debt change what ARC Ride can build and how quickly, compared with relying entirely on equity?

JH: It’s about getting a healthy balance. If we were doing the same project in Europe or America, it would all be about growth and worrying about sustainability and capital structure later. But operating in Africa, we need to be able to make profits from a very early stage.

With that profit focus — reaching EBITDA profitability — we can take on more debt. We’re looking at how we can have that strong equity base but also leverage debt to grow quickly. It’s about getting the healthy balance between the two. We’re not looking to over-leverage the business, but with investments in large-scale batteries, which sit on our balance sheet, we are going to have to continuously leverage that to grow at the speed we want.

LBA: ARC Ride has roughly 30% of Nairobi’s electric boda boda market and swaps about 10,000 batteries a day. What is the key operational lesson from Kenya that you are applying in South Africa?

JH: One of the key things is having strong IoT connectivity partners and having backups. We are very much beholden to our telecoms partners who provide the IoT SIM cards. We need to make sure we have redundancy — not just working with one provider, but working with two — so that we can provide uptime and continuous service to our riders.

We need to make sure riders have confidence in the ecosystem: wherever they go, batteries are available, and they can swap, ride, and earn money. These guys work incredibly hard, up to 16 hours a day. We have to provide that service and always be on for them because they’re constantly pushing the machines and the network to the next level. We have to stay one step ahead, making sure we have battery availability and redundancy with solar charging in case the energy grid lets us down. It’s been a real journey of figuring out how to build a distributed energy infrastructure business at scale with IoT connectivity. We’ve achieved that in Kenya, and we’re looking forward to replicating it not just in South Africa, but in Ghana and Uganda where we’ve launched operations as well.

LBA: Infrastructure deployment is capital intensive. Swap stations cost a lot of money whether they are busy or not. How are you thinking about station economics and rider density as you enter markets where you have no existing user base?

JH: Rider density is something we’re very focused on. ARC Ride is not going to be the solution for every boda boda across Africa — we are a solution for cities. We need that density of bikes to operate the ecosystem effectively.

Once we start getting those ecosystem effects, we generate a huge amount of data. We’re able to move our infrastructure around in response to rider demand. We don’t only have automated swapping cabinets; we also have “Arc Ride Hubs.” At these hubs, we keep 200 to 300 batteries, and we provide maintenance services for the bikes. That’s a real touchpoint with the rider, putting the customer at the heart of what we do.

We have hubs every five kilometers around the city, and automated swapping chargers every two to three kilometers. Wherever you are, you always have access to a battery system. It is a risk at the beginning, but once you get over 1,000 to 1,500 bikes, you start to see those ecosystem effects. It becomes a positive ecosystem as a whole, rather than “there’s one cabinet over here, that’s not cost-effective.” You really start to see the batteries moving around, and we have a lot of data that enables us to track that and plan in real-time. The next stage of infrastructure is based on that data so we can respond directly to rider demand.

LBA: You began your South African expansion with a Cape Town pilot. What did it reveal about rider behaviour, unit economics or regulation that differed most from Kenya?

JH: South Africa is a very different market. All of the other markets we’re going into are motorcycle taxi markets. South Africa is about delivery — how we make sure the product actually fits a use case for delivery, particularly food and groceries. That’s what the tens of thousands of motorbikes in South Africa are used for, whereas the hundreds of thousands of motorbikes in other markets are used for passenger taxis.

It’s really about making sure we can make the unit economics work. Our core principle is that we have to be 30% cheaper on a use-case basis than a petrol bike. We believe that’s the tipping point where people adopt EV over petrol. Looking at that as a baseline, we felt that with the investment support in South Africa — setting up an assembly line, creating local jobs, but most importantly being able to offer a 30% cheaper bike option than petrol alternatives — was very exciting for us.

Also, South Africa has a lower number of bikes compared to some markets, but it’s one of the fastest-growing motorbike markets in Africa in percentage terms. It gives us an opportunity to become number one in the market rather than just competing with a lot of existing ICE (Internal Combustion Engine) motorbikes. We’re going to be on a level playing field with our ICE competitors from day one, and we’re super excited to show how EV holds that cost-competitive advantage. That’s what’s going to drive uptake of our product versus the competition.

LBA: South Africa offers a 150% EV investment allowance. How important was that incentive to your expansion, and how has it affected your local assembly plans?

JH: To be honest, it wasn’t the prime driver. We really put the motorbike rider at the heart of our decision-making. Tax incentives and government regulation create an enabling environment, but if we don’t have that 30% cost saving for the rider, we don’t believe we’re going to be able to sell at the volumes we’re targeting.

We did decide to set up local assembly in Cape Town to take advantage of local manufacturing and automotive tax benefits. But that cuts across automotive generally — it’s not exclusive to EVs. It’s the same in any country; Uganda has incentives for local assembly, as does Ghana. We’re always looking to create as many local jobs as possible and invest within the available regulatory framework.

LBA: ARC Ride appointed Mikael Cloete to lead the South African operation. How do you divide strategic authority between the central team and local leadership across your key markets?

JH: I’m focused on building the best product we can and making sure we hit that 30% cost-saving benchmark. Beyond that, we’re committed to building strong local teams. Mikael is leading South Africa. We wanted someone who really understood the dynamics of the South African motorbike business, but who was also a champion of transitioning to cleaner, more impactful bikes. Mikael stood out for us as that candidate.

I really listen to his view and the team he’s built. We’ve brought in people from other OEMs (Original Equipment Manufacturers) and energy infrastructure. You really have to listen and learn from the local teams. In Ghana, we hired David, who used to be the MD of Bolt for Ghana. We’re making sure we drive local teams and hire people who can shape what we offer to the market. We’re not a one-size-fits-all business. From our experience in Kenya, we’ve learned that you can’t just bring something from China and drop it into the market. The fact that our bike has been designed locally at a component level makes it fit for purpose. It’s that balance of global expertise with local market execution that gives ARC Ride the edge as we expand.

LBA: ARC Ride positions itself as an infrastructure provider rather than simply a vehicle manufacturer. How do you balance an open battery standard with the need to build a defensible competitive advantage?

JH: It’s a great question. Like a classic startup, we had to do everything at the beginning. We built a really strong bike — the Panther — and launched it across our markets. But we’re also realizing there are multi-billion dollar OEMs entering the African market. What gives us the edge is the interoperability of our battery system. These larger OEMs like the idea of adopting it as their standard for Africa.

We’ve really got to execute on the infrastructure front. We have to build that infrastructure ahead of them bringing their bikes to market. That goes back to our capital stack — without DFI and listed company backing, we simply wouldn’t have the capital allocation to grow at the speed of this market. It’s all about the right partnerships. It’s the partnerships with OEMs adopting our battery system, ensuring capital is deployed, and partnering with players like TotalEnergies and other leading petrol station networks to scale quickly in new markets.

LBA: You recently launched the Yadea Kifa model for the African market using ARC Ride battery technology at the EV Expo Kenya this year. What does this partnership look like in practice — revenue share, licensing, or something else — and are you in conversations with other major manufacturers about joining the network?

JH: It’s really exciting for us. We have conversations ongoing with several large OEMs. I can’t name who they are today, but there will be a series of announcements coming in the next few months — very large partnerships with serious players, and not only in the two-wheel space. What I can say — and we haven’t really shared this publicly yet — is that we’re also moving into the three-wheel and small four-wheel space using the exact same battery system. That’s going to be huge for us.

What really works on the economics is that these manufacturers cannot sell vehicles at an affordable price unless they take the battery out of the vehicle and put it onto our balance sheet. That separation of the battery from the vehicle is the commercial driver of these partnerships. It’s not so much about revenue share; those are two separate businesses. One is selling vehicles — which we participate in — but we see a future where third-party vehicle sales on our battery system actually overtake our own vehicle sales. Putting in that infrastructure is what enables those sales to happen. That’s the symbiotic, win-win relationship we’ve created.

LBA: You can’t discuss the swapping model without mentioning battery degradation. It’s a slow leak in every swapping model’s unit economics. As swap stations scale and batteries move through different cycles of exchanges, how does ARC Ride manage the lifecycle cost? Who ultimately bears it — the rider, the fleet operator, or the network?

JH: We take that risk. But we’ve deliberately planned for it from day one. We’re not just putting batteries out without factoring in degradation. My background is in energy infrastructure and distributed energy systems, so lifecycle management is second nature. We’ve designed our batteries from the start to have a 360-degree lifecycle, developing second-life applications for when they reach about 20% degradation (80% remaining capacity).

When a battery reaches 80% capacity, we repurpose it for second-life use in static storage. We invest in new batteries for the mobility network. ARC Ride’s commitment to everyone — whether it’s a rider or an OEM — is that we will never let batteries degrade to a point where they compromise range or customer service. We’re building local reassembly plants where retired batteries are repurposed for static storage, which is a massive growth market in Africa. That gives the battery cells another five to six years of active life. As a result, we avoid premature recycling risks, lower our cost of capital per cycle, and run a much more sustainable business model.

LBA: Reliable electricity remains a major challenge across Africa. How central are solar power and battery storage to ARC Ride’s operating model, and can energy management become a competitive advantage?

JH: Access to power is one of the things that keeps me awake at night. If you’re running an electric motorcycle ecosystem, you need reliable 24/7 power for charging. Anyone in Africa who pretends that’s easy hasn’t worked in this space. Having spent 23 years in energy transition across Africa, I don’t underestimate this challenge.

Having worked on distributed energy grids and mini-grids, we’ve brought a lot of those lessons over. It’s about striking an optimal balance: taking power from the grid when available, while lowering operational energy costs through distributed renewables despite the higher upfront capex.

Additionally, our swapping cabinets can operate offline. If the power goes down for an hour — whether solar or grid — charged batteries inside the cabinet kick in to keep the swapping system operational. We’ve built an optimal power management framework between pre-charged batteries, available grid capacity, and solar inputs. We haven’t perfected it 100% yet, but these optimizations are central to our growth as we move from Series A to Series B and C. Energy management will increasingly sit at the heart of our operations.

LBA: You recently launched the James Gichuru hub in Kenya with a 55-kilowatt solar system. What have you learned from the project, and how easily can the model be replicated elsewhere?

JH: That project is a great proof point. We installed a 55-kilowatt solar system that provides between 60% and 70% of the total energy needed for charging batteries at that location. We remain grid-tied to balance the energy load, but maximizing solar draw is key.

I firmly believe in using renewable energy to power battery networks — that’s the real sweet spot. Combining locally generated clean energy with a battery system that enables someone to earn 30% more a day while cutting petrol is a huge win. Following this investment round, you’re going to see us replicate this model at a much larger scale across the continent. Our target is to source 50% of our energy from solar — it’s ambitious, but it’s a goal I’m personally committed to achieving.

LBA: ARC Ride is competing with well-funded companies such as Spiro and Ampersand. Where does your infrastructure-first model give you an advantage that capital alone cannot easily replicate?

JH: Low-cost, unreliable systems that go offline don’t give riders confidence. We are targeting a high-quality ecosystem — that’s reflected in our name: “Affordable, Reliable, Clean.” The bike needs to be priced competitively with petrol models while offering absolute reliability. We want to be the Honda of electric vehicles in Africa. Honda hasn’t stepped up to fill that space yet, so we’re here to make it happen.

LBA: The electric mobility space is consolidating fast — and one of the more interesting signals is the leadership moves happening across the sector. Spiro has brought in seasoned operators. You yourself have transitioned into a Chief Infrastructure Officer role. What does that pattern tell us about where the industry is in its maturity curve — and why is the quality of leadership becoming the decisive variable in who wins this race?

JH: People determine who becomes the winners in this race. For us, it’s not about collecting impressive CVs; it’s about hiring people with the right local relationships and market understanding. You won’t see us bringing in a large international expat team to run this business. It’s about finding the best in-country talent and executing a localized strategy around a centrally developed core product.

The product has to be tailored for each market. What works in Kenya won’t necessarily work in Cape Town or Kampala. For instance, bikes deployed in Uganda feature a different setup to handle the hills, driven directly by feedback from our Ugandan team. We constantly look for local operational efficiencies. Building localized leadership teams across our markets gives us diverse perspectives and sharper execution — that’s what will make us a better company overall.

LBA: With the latest funding, are you mainly focused on hiring local talent, or are you also targeting experienced executives from competitors and established mobility companies?

JH: We’re always looking for top local talent. We want to create an environment where the best operators are excited to come and work with us. If our goal is to be number one in Africa, we need number one talent — simple as that. Our door is always open to builders who bring dynamism and execution capacity. We’re growing fast, and we want the best people on board.

LBA: Established logistics and mobility operators already have large fleets across Africa. Do you see them primarily as customers for ARC Ride’s battery-as-a-service infrastructure or as potential competitors?

JH: ARC Ride is built on partnerships. Our goal is to forge strong partnerships that get as many electric bikes on the road as possible, driving our core business: maximizing clean energy transfer through our batteries and increasing clean kilometers driven daily.

Existing fleet operators are core partners for us. In South Africa, we’re excited about transitioning food delivery fleets to electric. Consumers want it, and riders benefit immensely — saving up to 40% in operating costs in some markets. Competing with established fleet and logistics companies makes no sense when we can empower them through our infrastructure. Strategic partnerships are the fastest, most effective way to scale.

LBA: What is the most defensible moat in ARC Ride’s model: network density, technology, OEM partnerships, data or something else?

JH: Network density is critical. Building a moat comes down to pure speed of execution. It’s about how quickly you can deploy hundreds of charging points across target cities, giving major OEMs the confidence that you are the right infrastructure partner.

That’s why we haven’t just doubled down exclusively on Kenya; we’re launching across East, South, and West Africa simultaneously. Establishing these regional bridgeheads gives us a strategic platform for rapid expansion. At the same time, our technology has to be best-in-class — enabling real-time tracking of every bike and battery, over-the-air diagnostics, and predictive data planning. It all comes down to execution now. Raising capital is one thing; deploying hundreds of swap stations and thousands of active bikes on the ground is what actually wins the market.

LBA: ARC Ride plans to expand into Ghana, Tanzania, Uganda and South Africa and deploy 5,000 additional motorcycles. How do you prioritise markets, and why is Nigeria not currently a priority?

JH: Market entry comes down to clear demand and favorable economics. While demand exists across most African cities, we prioritize markets where we can deliver that direct 30% cost saving to the rider.

Nigeria is currently challenging due to fuel economics. While market dynamics are shifting, petrol pricing makes it harder to offer a compelling cost-per-kilometer advantage compared to electricity. We go where the energy math allows us to pass immediate, tangible savings on to the rider.

LBA: You’re building across these different markets. What keeps you awake at night? Is it regulatory goodwill, local partnerships, or rider adoption?

JH: It always comes down to the rider. Putting the customer at the heart of our model and delivering real cost savings is what matters most. Regulatory goodwill is important, but providing a strictly superior service compared to a petrol bike is what drives adoption.

We view petrol bikes as our main competition — not other EV players. With petrol motorcycles holding 99% of the market, fighting over early EV market share makes no sense. Our focus is converting ICE riders by offering unmistakable cost savings and reliability.

LBA: And if you were advising another founder looking to build battery-swapping infrastructure in a new African market, what is the one thing you would tell them to get right first, and the one mistake you’ve learned the most from?

JH: Focus relentlessly on your technology stack. Make sure your tech can seamlessly communicate across all hardware assets and track energy management in real time across different regulatory environments. Managing real-time energy distributed across thousands of assets is incredibly complex. Never underestimate how difficult it is to build and maintain that tech stack — it’s the foundation everything else rests on.