to scale by mee4ng BoP market demand for basic goods and services like educa4on, healthcare, informa4on and energy. Rapid growth to scale is achieved by: ❖ Sa4sfying latent demand, not perceived needs. ❖ Joining, shaping & expanding exis4ng markets rather than seeking to create new ones (unlike technology businesses). ❖ Addressing the twin problems of access and affordability. ♦ Innovate business models and adapt technologies to profitably: ❖ Widen BoP market access ❖ Reduce cost and price ❖ Improve quality ♦ Thereby generate double-‐digit financial returns and very large scale social benefits to BoP consumers. The Fund targets breakthrough businesses serving base-‐of-‐the-‐ pyramid (BoP) markets. Breakthrough businesses…
to educa4on (one of the first external investors) ♦ 4AFRI Media v Access to informa4on (seed and expansion capital; first external investors) ♦ Paradigm Kenya v Fuel efficient cook stove distribu4on, improving health, household economics and emissions (largest shareholder) ♦ Gerum Motors v Assembly, distribu4on and financing of low-‐cost mobile business plaUorms in Ethiopia (closing October 2012)
educa4on is NOT free ($2-‐5/month) ♦ 30-‐50% of instruc4on 4me lost due to teacher absenteeism & neglect ♦ No accountability to parents ♦ A $40 billion global market… ♦ For-‐profit schools @ $4 per month ♦ Pupils outperforming peers by 100% in literacy and 25% in maths skills ♦ 84 schools serving 27,000 students at end September; 1,100 employees ♦ Opening 45 new schools in Jan 2013 ♦ Target: 10 million students ♦ June 2009 investment valued at 5.5x in June 2012 Series C financing Existing Investments: Primary Education State School System
(Addis Ababa) ♦ < 5% Internet penetra4on ♦ Lost 4me ♦ Informa4on asymmetry ♦ Yet there are c. 500 million mobile phones in Africa ♦ Mobile phone is the compu4ng plaUorm of choice ♦ Informa4on/content portal on the mobile ♦ Built and launched mul4ple applica4ons: e.g., health management, job search, news ♦ Added 5 million users in 10 months ♦ Pursuing geographic and related business expansion ♦ 2009-‐10 investment valued at 2.6 – 4.3x in drao term sheets for next round financing
of household income spent on wood or charcoal ♦ 10 – 30 hours/week foraging for wood ♦ Respiratory ailments causing 1.9 million deaths per year globally ♦ Fire hazard; 300,000 deaths per year ♦ Deforesta4on/environmental damage ♦ 50% saving on fuel (4me & money) ♦ Reduce smoke & toxins by 75% ♦ Local (Kenya) contract manufacturing ♦ Target sales: > 1 million stoves; first year sales 1.7x plan ♦ Pre-‐sold carbon offsets ♦ > 20% projected IRR Tradi4onal Stove
8 million people lack access to adequate sanita4on in Kenya ♦ 80% of slum dwellers pay to use inaccessible, unhygienic toilets ♦ Pit latrines and “flying toilets” in urban areas are unhygienic & contaminate the water supply… ♦ … Causing disease, disability & death ♦ Franchising low-‐cost toilets with air-‐ 4ght 30L containers in the slums ♦ Collec4ng the waste daily and processing into organic fer4lizer and energy (biogas) ♦ Providing employment & affordable access to toilets; improving health, protec4ng the water supply ♦ High margin, full cycle business conceived by MIT grads Kibera Sewer System The Solu4on
are small scale farmers (SSFs) ♦ Lack of data and co-‐ordina4on means that SSFs pay high prices for farm inputs and receive low prices for their produce ♦ SSFs have no visibility on market trends, local weather and other essen4al agricultural informa4on ♦ SSFs typically receive only 10% of the value of their crops, with 90% taken by numerous intermediaries ♦ SMS-‐based informa4on portal, commodity exchange and “Groupon” for SSFs ♦ Access to current market prices in five Kenyan markets, and localized weather & agricultural informa4on ♦ Connects SSFs to jointly market crops in greater volume to secure beter prices ♦ Aggregates SSF orders for farm inputs to obtain bulk discounts from suppliers ♦ Offers an online exchange for SSFs to sell direct to na4onal and interna4onal buyers, paying 7% brokerage commission Small Scale Farmers Investments in the pipeline: Virtual Commodity Exchange The Solu4on
tbnetwork
chrislema
mojombo
marktimemedia
sergeychernyshev
samtorres
ipullrank
geoffreycrofte
tmiket
vanstee
lara
akosma
popppiees
