For nearly five years, Dandao Simon, a bike-taxi driver in the port city of Cotonou, Benin, took only 30% of his daily income home — he had to spend most of his earnings on refueling and repairing his gas-powered motorbike. But in 2023, Simon heard of Spiro, a local startup that offered new electric two-wheelers in exchange for old motorcycles, without any upfront costs. The company had also set up several battery-swapping stations in Cotonou for e-bike owners. 

Simon is among the more than 4,000 people who have taken up Spiro’s offer, and swapped his old motorbike for the electric Commando model. His new bike can go up to 160 kilometers per charge.

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“I love the bikes because [they have] no chain, and I’m not going to a mechanic to change the oil, so all that money going to repair is now mine,” Simon told Rest of World, as he waited to change the battery of his Spiro bike at one of the company’s more than 100 swapping stations across Cotonou. “My income is not big, but it’s doing more for my family.”

Founded in 2019 by Africa Transformation and Industrialization Fund (ATIF), an Abu Dhabi-based investment firm, Spiro is Africa’s biggest electric two-wheeler company. The company, previously known as M Auto Electric, has so far placed over 10,000 e-bikes on roads across Benin, Togo, Rwanda, and Kenya. ATIF, which backs industrialization and environmental projects in Africa, funds Spiro and appoints its CEOs.

Spiro makes money from the EV batteries in its vehicles and from the around 600 battery-swapping stations it has set up in four countries, co-CEO Jules Samain told Rest of World. The company’s success has so far been impressive, but EV experts warn it could struggle in the future due to its capital-intensive business model.

Incurring the entire cost of vehicles to bring users into the swapping network is not feasible in the long run, Toffene Kama, principal investor at Mercy Corps Ventures, an impact-focused fund that backs e-mobility in Africa, told Rest of World. “You just take existing bikes, throw them out, and give the customer a new electric bike. But if you do that, you probably will need to compensate for that with a higher cost of energy, which can be a problem as well,” Kama said.

Spiro had initially hoped to monetize the old bikes it collected from riders by retrofitting them with EV technology — but that hasn’t worked out. Around 40% of the bikes Spiro collects are converted to scrap metal and sold for less than $20 per unit, Samain said. Rest of World visited four of the company’s branches in Togo and Benin, and saw hundreds of abandoned bikes waiting to be scrapped.

Any bike owner can go to a Spiro exchange center, request a swap, get their credentials verified, and pick up a new EV within a week. Riders then pay a daily fee of 3,200 CFA francs ($5.32) for up to seven battery swaps, and each additional swap costs 500 CFA francs (83 cents). The daily fee also covers insurance and maintenance, and riders can take the bikes for check-ups anytime for free. After 150,000 kilometers, a rider takes full ownership of the bike and is not required to pay the daily swap fee. Spiro also runs outright sales of its Commando bike at 890,475 CFA francs ($1,470), and its Chap-Chap model at 696,631 CFA francs ($1,150).

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As appealing as Spiro’s proposition is, unit economics is still the biggest threat, according to Adedotun Eyinade, energy expert and program director at the Nigeria Off-Grid Energy Market Acceleration Program, a renewable energy initiative. “How does [Spiro’s] battery-swapping stack against diesel or petrol-powered bikes especially in last-mile communities?” Eyinade told Rest of World via text. “If the recent failure of Bird Global, the e-scooter rental pioneer, is anything to go by, then this seems like another high-growth, high-loss startup, albeit serving a price-sensitive market.”

Spiro has invested more than half of the $143 million it has raised so far to reach its current scale, and it would take over $100 million to put another 10,000 bikes on the road, Samain said. “It’s a huge amount of money, to be honest. If, in each country, you want to put 10,000 bikes, you need to think about $150 million in terms of capital investment.” Samain said Spiro will continue to scrap old bikes until there’s a sustainable way to retrofit them into EVs. But that business is also not foolproof, according to Kama of Mercy Corps. “I think that some players have tried [retrofitting], but the result from our study was that the bike you are retrofitting has other problems than just the battery or the motor,” he said. “The chassis might already be broken, so you might end up fixing other things that have nothing to do with the electrification. I don’t think that that’s a viable option at the moment.”

Meanwhile, some users have started taking advantage of Spiro’s exchange offer.

In Togo’s capital city, Lome, 28-year-old Anani Yaovi Paul purchased an old bike for cheap with the sole purpose of swapping it for a new Spiro Commando e-bike, he told Rest of World.

A Spiro executive, who asked to remain anonymous as he was not allowed to speak to the media, told Rest of World the company did not care much about such instances as long as the EV owners were paying their daily dues and using the battery-swapping stations.

Spiro is looking to end its free exchange model, Samain said: “Now that the message is clear and everybody knows our bikes, we now think that we need to change the strategy a little bit.” The company is already testing a “discounted model strategy” in Kenya and “working with some dealers to kind of use them as a distribution line and platform to sell our bikes,” he said.

Oluwatosin Osho, an investment analyst, believes Spiro’s business model has promise, and that the company could still turn a profit. “I think this kind of business model could still be fairly profitable,” he told Rest of World via text. A key driver of success for businesses using this model is their ability to raise money easier than most companies can, while rendering a service that riders can pay back over an appropriate time frame, Osho said.

Spiro has managed to get at least two governments to support its work. In 2023, it partnered with the Ugandan government to put 140,000 bikes on the roads by 2028, and with the Kenyan government to deploy 1.2 million EVs in the country. Spiro has also partnered with Chinese manufacturer Horwin to source EV bikes.

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Spiro’s dependence on Chinese manufacturers could be a concern moving forward, according to Tom Courtright, energy and electric mobility consultant and research director at Africa E-Mobility Alliance, an EV advocacy group. “The problem is that [the battery market] is so dependent on China that if you have a spike in demand for batteries in your swapping system, it’s extremely difficult to respond to it in a very agile fashion, unless you have a lot of extra money on hand,” he told Rest of World. “And so, therefore, you have a bunch of extra batteries in storage. But that creates its problems because if you are just leaving batteries in storage, their state of health will get worse and worse unless you are charging them and discharging them semi-regularly.”

To reduce dependence on its Chinese partners, in 2024, Spiro plans to set up EV assembly plants and battery manufacturing factories in the four countries where it operates, co-CEO Kaushik Burman told Rest of World over email. “We have pledged to have a manufacturing and assembly plant operating in East Africa as part of our arrival in Kenya, so this is currently being developed,” Burman said.