Angaza Raises $4M To Make Clear Power Reasonably priced For World’s Poorest
Typically, off-grid rural villages in locations like Africa have their electrical energy generated by power units, like photo voltaic panels and batteries, donated by non-revenue organizations and charities. The issue, nevertheless is that mannequin is just not sustainable and depends of but extra charitable hand-outs. What’s required is to make clear power scale in self-supporting method. Fortunately the rise of the cell phone and cellular cash (similar to M-PESA) has created an entire new business which might permit clear power to be paid-for by clients in creating nations in a fashion the place they will truly afford it.
A San Francisco startup referred to as Angaza has provide you with an revolutionary enterprise mannequin which employs a Pay-As-You-Go (PAYG) system which it combines with clear power. It’s now closed a Collection A funding of $four million, following its $1.5 million Seed spherical in 2013 to deal with the 1.2 billion individuals who at present stay off the grid. The spherical was led by an unnamed US-based mostly household workplace and was joined by New York-based mostly The Social Entrepreneurs Fund and a number of other others.
A lot of the 1.2 billion individuals on the planet with out electrical energy don’t have sufficient prepared money at one time to buy a photo voltaic mild or power system outright and are subsequently caught in a perpetual cycle, having to spend as much as 20% of their revenue to purchase kerosene gasoline to burn for mild at night time. PAYG permits off-grid households the chance to purchase clear, dependable electrical energy in small, reasonably priced increments. Angaza companions with producers and distributors to offer them with a B2B PAYG answer.
Right here’s the way it works: Take somebody in rural Kenya. They sometimes first study the potential for buying a photo voltaic lantern by way of an area gross sales agent of considered one of Angaza’s distribution companions. After making a small “down cost” for the system ($1-5), they take the lantern (typically with a cell phone charging port) and photo voltaic panel house. The lantern will keep on for an period of time proportional to the dimensions of the cost that was made. After that period of time has elapsed, the gadget deactivates and can’t be turned on once more till one other cost is made, identical to shopping for pre-paid airtime on a cell phone. They will then use the cash of their cellular pockets to ship a cost from their telephone to the distribution firm that bought them the lantern. The consumer can then proceed to make weekly funds of $1-2 every till the lantern is absolutely paid for, sometimes in inside two to 12 months, relying on the dimensions of the product.
That is in impact a magic bullet: It means sustainable photo voltaic power for the client, which they will repay, ends their reliance on kerosene (which is massively polluting to the setting and a well being hazard), and its additionally makes for a enterprise mannequin which doesn’t require but extra charitable donations. It additionally means distribution companions can see a 4-to-5-fold improve in gross sales once they start to supply PAYG, as a result of the purchasers can truly afford to pay in these small increments by way of their mobiles. Growth!
Angaza’s answer consists of embedding a hardware subcircuit and firmware right into a photo voltaic or different inexperienced power gadget which offers each inner power metering, so the system can deactivate if the pre-paid power has been consumed; and a cellular wi-fi connection, so cost info might be despatched to the unit and utilization and diagnostic info could be remotely collected from the unit. The know-how is built-in into clear power units to permit these units to be paid for over time, in small increments.
The startup earns recurring income (a proportion of the transaction charges) off of each cost that’s processed by its software program platform. It additionally collects licensing charges from manufacturing companions who use its embedded know-how.
And make no mistake, this can be a massive market. Based on the International Off-Grid Lighting Affiliation (GOGLA) expects the off-grid power and equipment market to be a $50 billion per yr alternative.
Angaza is the one firm that gives a PAYG answer for even the smallest, ½-watt clear power units.
Thus far, distributors use Angaza’s platform to promote Pay-As-You-Go power units in Kenya, Tanzania, Uganda, Malawi, Zambia, South Africa, India, and Pakistan.
Whereas there are a number of different Pay-As-You-Go photo voltaic corporations targeted on the East Africa and Indian markets, they’ve taken a totally vertically built-in strategy (e.g. M-KOPA and Off Grid Electrical). Because of this they manufacture their very own product, construct their very own PAYG know-how, distribute their merchandise to finish customers, and supply after-gross sales help. However Angaza can promote to 3rd-celebration producers at a fraction of the fee it might take for them to develop it in-home, whereas leveraging Angaza’s present traction and scale.
The chief staff includes Lesley Marincola (CEO), Bryan Silverthorn (CTO) (who’re brother and sister) and Victoria Arch (VP of International Technique). Its ten individual San Francisco workplace consists of primarily hardware and software program engineers in addition to a small enterprise group. Its three individual Nairobi workplace focuses on fostering partnerships with PAYG distributors.
Previous to founding Angaza, Marincola accomplished her B.S. and M.S. in Product Design and Mechanical Engineering at Stanford and labored at Amazon (Lab126) on the Amazon Kindle design workforce.