Kenya’s Watu Delivers Record $37 Million Profit on Smartphone Financing Surge

Kenyan asset-financing startup Watu Credit has reported a record net profit of KES 4.8 billion (about $37 million) for 2025, powered by a surge in demand for financed smartphones across its African markets.

The Nairobi-based company, known for financing motorcycles, three-wheelers and smartphones, delivered a 14-fold increase in earnings for the year ended December 31, 2025. Profit jumped from KES 157 million (around $1.2 million) in 2024, according to disclosures by Car & General, which owns 29% of Watu.

Revenue for the year rose 92.7% to KES 28.3 billion (approximately $219.2 million), underscoring how rapidly the business has rebounded after a difficult 2024.

Watu’s recovery has been driven largely by its smartphone financing unit, Simu, which Car & General describes as one of the company’s fastest-growing segments. The model allows customers to acquire smartphones via instalment payments rather than paying the full price upfront, helping more consumers in its markets access internet-enabled devices.

Car & General said in its annual report that “performance in 2025 continued to improve on the back of Simu growth through the region,” pointing to the unit as a key engine of both revenue and profit.

The strong smartphone performance helped offset pressure in Watu’s core mobility business, which finances motorcycles and three-wheelers (tuk-tuks) that are widely used by informal transport workers, including Kenya’s boda boda riders. While that segment remains central to Watu’s positioning as a non-bank asset financier, it has faced greater headwinds than the fast-expanding phone portfolio.

From 2024 setbacks to regional stabilisation

The 2025 results mark a sharp turnaround from 2024, when Watu’s profits fell 85%. That earlier slump was linked to rising loan impairments, foreign exchange losses, and the costs of expanding across several African markets.

Watu has grown beyond Kenya into Uganda, Tanzania, the Democratic Republic of Congo, Nigeria and Sierra Leone in recent years. That push brought scale but also exposed the business to currency volatility and credit risk. In 2024, some of the toughest hits came from currency depreciation in markets such as Nigeria and from higher loan impairments in Kenya and Tanzania.

Car & General now says those newer operations have stabilised. “In 2026, we expect revenues to grow in Kenya, Uganda, Tanzania, DRC, Nigeria, and Sierra Leone, where operations have now stabilised,” the company noted. “We are very positive about business prospects and expect continued growth this year.”

The improved performance comes at a time when investors are paying closer attention to profitability and unit economics across African fintech and lending startups, following a slowdown in venture capital funding. Watu has framed itself as one of Africa’s largest non-bank asset financiers, and in a September 2025 conversation with TechCabal said it was targeting $340 million in revenue in 2026 as it also looks beyond Africa to Latin America.

For now, the latest numbers suggest that a combination of recovering regional operations and booming smartphone financing has put Watu on a stronger financial footing heading into 2026.