15th October 2018
Over 120 million households in Africa lack access to adequate electricity. These households typically spend considerable sums of money on expensive, dangerous and unhealthy stopgap lighting sources such as kerosene, candles, and dry-cell batteries, and rely on costly and inconvenient charging services to operate basic appliances such as cell phones and radios. However, over the past decade, the spread of GSM technologies, including mobile money, and the plummeting cost of off-grid solar hardware have combined to create a business model (known as “pay-as-you-go”, or PAYG) where off-grid solar companies can now provide African households access to reliable and efficient electricity sources at lower price points than stopgap measures. Even though the off-grid solar industry is flourishing, it currently serves less than two percent of the total addressable market, with only a small number of companies operating at scale.
We believe that the local market knowledge and customer bases held by established distributors, if combined with the right mix of PAYG expertise, talent development, capital investment, and product partnerships, is the key to scale the delivery of PAYG off-grid solar products in under-served markets in Sub-Saharan Africa. To demonstrate this theory, Open Capital Advisors and Catalyst Off-Grid Advisors partnered to establish VentureBuilder.
VentureBuilder is a development company that provides a combination of deep PAYG expertise and systems development coupled with early-stage investment to African-owned and locally-managed distributors. VentureBuilder offers these distributors both capital and bespoke enterprise development advisory services to help them harness their local market knowledge and rapidly scale a PAYG off-grid solar business model. We believe this approach will build a new generation of local solar companies that are rooted in their communities and are capable of reaching populations that cannot be sustainably accessed by the current model of large, vertically-integrated businesses.
Download our first white paper here to find out how VentureBuilder works and why we believe it will contribute to SDG 7’s ambitious goal of universal access to electricity in Africa.