Sub-Saharan African access to electricity has gotten worse, not better

As many as 600M people in Sub-Saharan Africa lack access to electricity, and many more suffer from regular power cuts.

Solar energy is increasingly prioritized as a solution in the region, but there are challenges to growth:

• Affordable financing
• Lack of high-efficiency & high-quality products
• Frequent supply chain disruptions

_______________________________________________________________

https://www.oecd.org/environment/cc/climate-futures/Achieving-clean-energy-access-Sub-Saharan-Africa.pdf
https://www.iea.org/reports/sdg7-data-and-projections/access-to-electricity
https://www.imf.org/en/Publications/fandd/issues/2020/03/powering-Africa-with-solar-energy-sy

MPower is building a B2B platform to deliver cleantech products and green energy access across Africa

MPower is addressing supply and distribution challenges through partnerships with manufacturers in China, and with last-mile distributors in Africa who manage marketing, sales, and installation. On the customer side, they are facilitating microfinancing through banks and Microfinance Institutions (MFIs), who benefit from a reliable pipeline of borrowers.

MPower has taken a tech-forward approach to operations management; their in-house software stack facilitates efficient tracking of client data, financing, purchasing, and sales. The company states that this integrated operation system provides a key competitive advantage within the African solar market.

Unlocking solar energy in Africa with an expanding portfolio — from small solar bundles to larger systems and e-mobility

MPower’s in-house software solution comprises an Android app and a Cloud solution that automate operations and workflow. Their software gives them increased control and insight into their partners’ operations, which is beneficial when extending inventory finance. They automate Customer Relationship Management (CRM), reduce inventory costs by digitizing logistics management, and increase the efficiency of partner operations.

Digitization as a key enabler Establishing trust from manufacturer to end user

$1.7M revenue in 2022 | EBITDA positive in initial market

EUR 5.5M+ raised to date, enabling growth of B2B model

MPower has sold over 35,000 units to date, with 20 B2B distributors throughout 7 countries. The company is EBITDA positive in their initial market of Zambia, and is targeting company-wide profitability by YE 2023.

MPower has raised > EUR 5.5M in debt, equity, and grants to date, which has enabled them to build their robust software, supply chain, and on-the-ground presence across multiple markets. This foundation will now allow them to focus on their path to profit.

• MPower expects to become EBITDA positive in 2023 at Group level, when total revenues reach ~EUR 3,5M, driven by entry into new markets and supported by a strong B2B pipeline.

• Increased country sales, in addition to growth in new and higher margin services (SaaS and financing) from 2023, are expected to increase their EBITDA margin to 8% in 2023, which is expected to grow more than 6x to 19% by 2026

Tech-enabled B2B2C model

MPower supplies Plug & Play solar devices as well as energy efficient household and income-generating appliances for lower- and middle-income households, SMEs, and farmers in peri-urban and rural areas. They do this by leveraging a Business-to-Business-to-Customer (B2B2C) model, where they partner with co-invested distributors in SSA to deploy MPower branded products from their dedicated sourcing hub in Shenzhen, China.

MPower also facilitates access to finance, including inventory finance for distributors, and consumer financing for end users; inventory financing is mainly financed by MPower while ~80% of the consumer financing is from bank and MFI partners.

This model allows MPower to offer competitively priced, high-quality products to households, SMEs, and farmers in Sub-Saharan Africa.

Overview of MPower's growth strategy

MPower plans to scale our operations by increasing distributors and other key partnerships, expanding the product portfolio and further developing their financing offer.

MPower is targeting 78% revenue growth at a 6-year CAGR over the period 2021-2026.

Partnerships

Scaling of the company's partnership pipeline is made possible in part by their digitized & integrated operations platform, described above.

Existing partnerships

Product and financing offerings

MPower has launched additional product categories, such as larger solar systems and e-mobility products, which they intends to scale within present and developing markets. There is also room for the company to further develop their financing solutions for clients, which include payroll deductions, microfinancing, and corporate financing.

Additional geographies

MPower currently has local subsidiaries and teams in Zambia, Cameroon, Togo, and Namibia. An additional team in Ghana was incorporated in Q4 2022, under the expectation of increased sales in 2023. The company has made additional sales on an ad hoc/opportunistic basis in Botswana and Zimbabwe.

MPower is exploring new markets in Nigeria and elsewhere in SSA, evaluating their viability based on proximity to supply hubs and their growing pipeline of B2B partners.

Clean energy access intersects with multiple UN Sustainable Development Goals (SDGs)

$5.9M raised in debt, equity, grants

MPower is backed by Technology Fund, Energy4Impact, EIT InnoEnergy, Alternative Bank Schweiz, SIMA, and South Pole Group.

The company has further signed term sheets for a USD 4M debt facility that will be used for working capital. 

It is furthermore supported by leading stakeholders including ResponsAbility (TA Facility) and Google for SDG startup Advisory program.

MPower has a dynamic team of industry experts with a shared vision for a brighter, more sustainable future

• Manuel Seiffe has 12+ years of experience in solar and finance, and laid the foundation for the company's mission.
• Michael Eschmann is a seasoned expert in sustainable finance and development.
• Greg Nau is a former law partner with a passion for making a difference. 

In late 2017 the three founders came together to create MPower driven by the idea to bring affordable renewable energy to communities and SMEs, and began operations in Zambia at the beginning of 2018. Since then MPower has grown its team to 36 people across our 5 countries of operations (Zambia, Cameroon, Togo, Ghana and Namibia).

In addition to the carried interest Republic Deal Room Advisor LLC is entitled to for the syndicated investments it organizes, certain principals of Republic Deal Room Advisor LLC may have a personal interests in these investments, as disclosed below. When making an investment decision please review any applicable disclosures as they represent pre-existing financial interests held by those principals of Republic Deal Room Advisor LLC.

We do not represent that the information contained herein is accurate or complete, and it should not be relied upon as such. Opinions expressed herein are subject to change without notice. Certain information contained herein (including any forward-looking statements and economic and market information) has been obtained from and/or prepared by the Company or other third-party sources and in certain cases has not been updated through the date hereof. While such sources are believed to be reliable, Republic Deal Room Advisor LLC does not assume any responsibility for the accuracy or completeness of such information. Republic Deal Room Advisor LLC does not undertake any obligation to update the information contained herein as of any future date.