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Friday, June 24, 2011

Weekly Review June 20-24

This week at ID, we read about progress and developments in mobile technology around the world. 



“SlimTrader Lets Africans Shop via Text” by Ciara Byrne of Venture Beat via The New York Times
Our portfolio company SlimTrader was featured in The New York Times. Byrne used SlimTrader as an example of a company working in developing countries to facilitate customer transactions via SMS text messages. Founder and CEO Femi Akinde experienced firsthand the time-consuming transactions of daily life in Africa, especially in rural areas. The article goes on to explain SlimTrader’s business model as a solution for the Base of the Pyramid. 

“Kenya launches Africa’s first mobile apps lab” by Nmachi Jidenma of The Next Web’s Africa
With 300 million mobile phone users in Africa, mobile apps labs are appearing throughout the continent. The newest one in Nairobi, Kenya aims to encourage innovation and “is supported by the World Bank, Nokia and the Government of Finland.” The lab was officially launched one day after Pivot25, “a mobile app developer contest held in Nairobi” where developers pitched their mobile app ideas. Invested Development attended Pivot25 earlier this month.

“Demonstrating how mobile money is helping Haiti” by Cameron Peake via Mercy Corps
Citing “the power of cell phones” as a vehicle for positive social change, Mercy Corps recently hosted an event on Capitol Hill on mobile technology and social change. The reception was called “Innovation for Impact:  How Mobile Technology is Spurring Grassroots Recovery in Haiti.” Mercy Corps representatives and members of Congress discussed innovation in mobile technology and the efforts to increase financial services for the poor. Currently Mercy Corps is working with m-Via “to offer mobile-directed remittances products to Haitians.” 


“Nigeria: ChamsMobile partners Bancore, Skye Bank for m-payment service” via The Paypers

The mobile money market in Nigeria is finally heating up; nearly a year after the Nigeria Central Bank opened the doors to alternative payment providers. ChamsMobile (a division of Chams Plc) joins a handful of competitors like Pagatech and Monitise vying for dominance of Africa’s largest market. 
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Friday, June 17, 2011

Weekly Review June 13-17

Every week at ID we read articles about what we do and what we like. This week we read a lot about innovation in energy.

“Dr. John A. Rogers awarded $500,000 Lemelson-MIT Prize for health and energy innovations” Press Release via Lemelson Foundation
Rogers received the Prize for his work in technology contributing to human health and, related to our investment focus, the commercialization and increased scalability of photovoltaic solar power. Rogers has worked in photovoltaic solar, converting solar light to electricity. Rogers co-founded Semprius, a company that develops low cost, high performance “CPV modules to make solar power generation economically viable in sunny, dry climates.” Through a partnership with Siemens, Rogers scaled his system to make power affordable and economical in sunny areas, ideal for use in emerging markets throughout Africa and South America.

“South Africa: Poor Energy Policy Undermines Energy Diversity” by Glenn Ashton via All Africa
The Western Cape of Africa holds a promising future in clean energy. Last year, the Western Cape Environment Minister “received applications for installation of over 11,000 Megawatts (MV) of wind energy generation capacity.” Unfortunately, these privately-funded, market-driven initiatives face many delays due to the unnecessary bureaucratic delays and obstacles. The national energy policy has been topic of political discussion for many years, due to the massive economic and social costs that the poor energy system is imposing on South African citizens.  New government policies encouraging energy diversity, like finalized versions of the Integrated Resource Plans (IRPs), would open the door to market-driven energy solutions and improve the South African economy at all levels.

“The d.light S1 lantern” by Ravi Kumar via Acumen Fund Blog
d.light’s newest solar lantern is available for only USD$8, offering an excellent alternative to typical kerosene lamps. The S1 lantern is healthier, more energy efficient, and more affordable than kerosene. A day’s charge in the sun provides four hours of bright light after dark, adding precious hours of lighting in the homes of millions across Asia, Africa, and South America. Consider the effect of the added hours of safe light for a student. A student can now study at night after their daytime duties are completed. This increased productivity will allow for more hours of studying and a better performance in the classroom, all thanks to innovative technology in solar energy.

“A Kenyan Pedal Power Solution for Charging Mobile Phones” via NextBillion
image via ViewChange and NextBillion
NextBillion featured a video on its blog from ViewChange that produces educational and inspirational videos from the developing world. The featured video demonstrates an innovative solution for charging mobile phones in rural, where much of the country lives in energy poverty. Inventor Pascal Katana has created a way to charge phones using energy generated from a bicycle with an easy-to-use smart charger. The charger “costs about 350 Kenyan shillings, which is about USD$4.” Visit the link to watch the video.

“5 Million Bangladeshis Served by Solar Panels – Millions More Coming” by John Laumer via Tree Hugger
According to the evWind blog, the Infrastructure Development Company is funding 993,000 Bangladeshi residential solar units, totally 5 million for the country. The IDC is aiming to power 2.5 Bangladeshi homes by 2014, far exceeding the number in the US. 



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Wednesday, June 15, 2011

Innovation for BoP: EGG-energy's Pricing and Distribution Model

In a recent post, we discussed an innovative pricing model for the Base of the Pyramid with the example of Simpa Networks. This post introduces another innovative pricing model that demonstrates affordability a little differently, along with an innovative distribution model. EGG-energy, Simpa Networks, and the other companies in our portfolio understand that the customers they serve need basic affordability and accessibility.

EGG-energy has a growing number of charging stations and distribution centers in Tanzania, a country where the majority of the population within five kilometers of a transmission line but only 10% has access to electricity.1  At the charging stations, EGG employees package grid power into portable batteries to extend the reach of the grid. Customers who pay an initial deposit receive a fully charged battery, and EGG sends a trained technician to their home or business to install the required wiring. Along with batteries, EGG also offers applications like lights, radios, and phone chargers. A great product combined with innovative distribution, promotion, and pricing techniques, EGG-energy makes its products and services highly accessible for its customers.

via EGG-energy
EGG-energy deserves a lot of credit for its innovative distribution model. As a small start-up, EGG-energy takes advantage of the distribution channel that already exists throughout rural Tanzania to reach its target customer. Partnering with local dukas, “the Tanzanian version of convenience stores” to provide convenient pick-up and drop-off services for the batteries reduces capital expenses and allows the company to make another valuable revenue source available to small business owners. In this way, EGG benefits the local economy by providing energy access, jobs, and a sense of community.

In addition to a clever, market-ready concept and integration with existing distributors, EGG’s pricing model is also innovatively designed for customers at the Base of the Pyramid. There are three basic subscription plans, available on a 3-month (USD$23), 6-month (USD$40) or a 12-month (USD$65) basis. All require a USD$4 deposit. The plans allow subscribers to exchange their battery for free at the charging station each time the power supply depletes. The typical household gets about five days energy usage from a battery for lighting, radio usage, and mobile phone charging. If they exchange the battery at the distribution centers, rather than charging centers, they do need to pay a small fee to cover the extra travel costs.

Not only is EGG-energy’s model affordable, it actually improves customers' livelihood. EGG-energy recently hosted a consultant from ENEA consulting, a firm specializing in energy and sustainability development. Some major findings in the report include:
·         “EGG-energy customers typically reduce their kerosene usage by 83%2”
·         “EGG-energy customers spend at least 20% less on their annual energy expenditures2”
·         “70% of customers surveyed reported that they now feel safer both that they no longer have to worry about the hazards of using kerosene and have a much improved way of identifying nightly visitors to their homes.2”

EGG-energy is another example of an innovative energy solution with an accompanying affordable pricing model. In addition to short-term affordability, EGG-energy’s model is less harmful in the long run than traditional energy sources. By minimizing their carbon footprint and providing truly affordable and safe energy in rural Tanzania, EGG-energy is contributing to the well-being of the environment and improving the lives of the world’s poorest citizens.

1 http://egg-energy.com/wp-content/uploads/2010/12/EGG-energy_1pager.pdf
2 http://egg-energy.com/2011/05/impact-assessment-putting-together-a-rigorous-evaluation-framework

by Christina Tamer
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Friday, June 10, 2011

Weekly Review June 6-10

Lately at ID, we’ve been talking a lot about impact investing and what it really means. Since SOCAP/Europe, the industry as a whole has been buzzing about the future development of impact investing and social entrepreneurship.  

“Launch of social investment exchange set to raise activity” by Cosmas Butunyi
The Kenya Social Investment Exchange is a newly launched platform for “brokering deals between entrepreneurs and foreign investors,” which is promising for Kenyan social enterprises. Social enterprises will be subject to a thorough analysis by KSIX before being presented to impact investors both domestically and internationally.  KSIX will focus on sustainable development and social infrastructure projects. The increased number of investors will inevitably result in an increased number of small- and medium-sized businesses, thereby allowing the Kenyan economy to grow.

“Moving Impact Investing from Niche to Mainstream, While Protecting the Mission” by Thorsten Wirkes
The Impact Investing Track at SOCAP/Europe unanimously agreed that “impact investing is here to change the economic system and the world.” Impact investing uniquely has the power to account for long-term financial, social, and economic externalities. The panel also discussed several other issues regarding impact investing. Some say that impact investing should be considered its own asset class while others disagree. Regardless, panelists agreed that there are three major hurdles to impact investing becoming mainstream: “1) an economic way of measuring impact, 2) a regulatory environment accommodating long-term thinking, and 3) an adequate market infrastructure.”

“SOCAP has a crucial role to play between investors and entrepreneurs” by Dermot Egan
The purpose of SOCAP is to unite investors and entrepreneurs at the intersection of money and meaning. It does not exist to redefine profit, or to foster the creation of new economic models; rather “it seeks to redirect the power and efficiency of market systems toward social impact.” The common desire amongst participants is to develop the social impact investment landscape and to create a common language to “unlock the capital required to scale the movement.” Egan points out that there is an apparent gap at the seed funding stage – Invested Development is one of few firms that invest only in seed stage companies. The impact investing industry is growing, and surely Invested Development will grow simultaneously.

“TED Names 2011 TEDGlobal Fellows” via PRNewsire
A special congratulations to Femi Akinde and the team at SlimTrader, one of our portfolio companies, who were announced as one of this year’s TEDGlobal Fellows. Highly esteemed, TED is a non-profit organization devoted to “Ideas Worth Spreading.” SlimTrader has been handpicked as a innovative company with the power to change the world. SlimTrader will have the opportunity to share its work on an international stage.  

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Friday, June 3, 2011

Weekly Review May 30-June 3

Every week at ID we read as many articles as we can on our favorite industry topics. In searching for an alternative energy BETA Resident, we’re studying the types of innovative clean technology solutions out there. In addition to a great product or technology, innovative business models and applications of the technology inspire us and are the topic of this week’s Weekly Review.

Photo Credit: Port of San Diego under Creative Commons

“The Clean-Tech Economy at the Base of the Pyramid” by Stuart L. Hart from The Conversation HBR Blogs
Hart laments that US companies aren’t taking advantage of the financial potential and social benefits of clean technology. Emerging markets like China, on the other hand, are producing affordable products that can “truly shift the market” to clean technology. In addition to environmental benefits, several Chinese companies are creating multi-billion dollar industries serving the poorest areas in China. For example, “Chinese solar companies like Tsinghua and Himin Solar” are providing energy access in underserved areas of China, thereby improving the lives of the citizens there. Hart gives class examples of business maintaining financial returns while also having a positive social and environmental impact. The US certainly does not lack the technology, but the business models, attitudes, and infrastructure that are already in place are difficult to change  The Base of the Pyramid has an “advantage,” because new, innovative solutions can be introduced without disruption to current policies, systems, or infrastructure. We seek to invest in small, seed-stage companies with innovative energy solutions for the Base of the Pyramid. We hope it will serve as a model for US companies to follow and we’ll start to see more US based clean tech incubators like Greentown Labs.

“Scaling Green Energy Access from Millions to Billions” by Tom Boyd of Nokero via Ideas on Energy
Boyd offers a reality check:  1.6 billion people live without electricity and those that do, often only have access to unsafe and inefficient sources, most commonly kerosene lamps. Despite our efforts, the number of citizens actually using renewable energy in emerging markets is still too small. The solutions are highly effective, but are not quite reaching the necessary scale to increase access to safe and renewable energy. Boyd’s company Nokero offers solar light bulbs along with a “Power Panel” that can charge phones. In addition to a good product, social enterprises must have innovative business models to address the needs of the BoP as they are. Boyd outlines four innovative business models, including the benefits and challenges of each The four methods are: 1) the small enterprise approach, 2) the government subsidy approach, 3) the partial government subsidy approach, and 4) corporate, big-business approach. Our favorite is the small enterprise approach – market-based solutions that create micro-economies have both financial and social benefits for the investor, the entrepreneur, and most importantly, the customer. The customer usually saves money in the long-run from their investment and, using a solar light as an example, has access to safer and more efficient energy.

“Ashoka, Bamboo Finance, and the Canopus Foundation Join Forces to Launch Solar Energy Fund for Developing Countries” Press Release via Ashoka
The “Oasis Energy – Solar for All Fund” seeks to invest in social enterprises that provide affordable solar energy solutions in sub-Saharan Africa, India, South East Asia, and Central & Latin America. The Fund has been raised by the Solar for All (SfA) Initiative, launched by Ashoka and the Canopus Foundation. Bamboo Finance of the Blue Orchard Group has come on board to serve as the Fund’s investment advisor. The SfA Initiative’s objective is to bring “affordable solar power to 60 million off-grid households by 2020.” Now, with the Oasis Energy Fund, the SfA Initiative has become an impact investor for social enterprises.

“One Laptop Per Child Weights Going For-Profit” By Mary Moore from Boston Business Journal
One Laptop Per Child is currently a non-profit with an innovative product in developing countries. Developed close to home in the MIT Media Lab, the laptops they offer are powered by solar energy or by pulling a chain which creates energy. They are durable and able to sustain everything from a child’s usage to the climate’s harsh conditions. As we’ve said before, an innovative product isn’t enough. Non-profits have great missions and intentions. However, shifting part of the business to for-profit would allow OLPC to distribute more laptops and could create leasing arrangements with governments to allow the laptops to reach more children. As a for-profit social enterprise, OLPC’s business model will have a greater reach and will be able to source more innovative technological solutions to global poverty.

“Mexico Advances Renewable Goals But ‘Much More’ Could Be Done” by Ivan Castano from Renewable Energy World
Mexico and Latin America include many of the world’s poorest citizens with a huge potential for clean energy. Greenpeace said Mexico “could satisfy 95% of its electricity requirements from green energy by 2050 and 42% by 2015.” Some alternative energy options for Mexico are wind, geothermic, nuclear, hydraulic, and solar. According to the article, wind energy will lead the clean tech revolution in Mexico. There are also many biogas projects planned. Surprisingly, solar is overlooked. The weak commitment to alternative and renewable energy may be due to the perceived high costs and a commitment to oil and natural gas production. The government is planning to build several nuclear power stations, citing that a disaster like the one in Japan is unlikely to happen in Mexico, but without realizing the real risings costs of nuclear power. The government doesn’t realize the social benefits of energy access, and that the costs of renewable energy are decreasing or can be innovatively priced.

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