London-based startup BBOXX has been in Africa since 2010 and has installed about 200,000 home solar systems across Africa so far. Still determined to make more impact, the startup has now raised $50 million investment led by Japanese industrial giant Mitsubishi, marking another major funding milestone in the off-grid solar market.
Here Is The Deal
- The funding was led by Japanese industrial giant Mitsubishi.
- Mitsubishi’s investment into the UK-based pay-as-you-go solar provider is another funding milestone for the off-grid market.
- Other investors include Engie, the French energy giant that’s made other off-grid solar investments, including its 2017 acquisition of East African home solar installer Fenix International; Luxembourg-based investment fund Bamboo Capital Partners; Dutch investment fund DOEN Participaties; and Canadian growth equity fund MacKinnon, Bennett & Company (MKB).
- The funds will help BBOXX, which operates in Rwanda, Kenya, Togo and the Democratic Republic of the Congo, to break into new African markets, where an estimated one in three people live without reliable access to electricity.
- The startup also plans to use the new funding to target new markets in Asia, where it has already opened an office in Karachi, Pakistan.
- Roughly 600 million of Africa’s 1.2 billion residents lack grid electricity, making it a key market for off-grid solutions featuring the increasingly cost-effective tools of solar panels and wireless payment plans.
- BBOXX’s largest rival, Fenix International, supplies 500,000 homes and was acquired by Engie in late 2017.
What BBOX Stands To Gain From The Investment
Mansoor Hamayun, BBOXX’s chief executive and co-founder, said Mitsubishi’s “extensive reach” and “technological expertise” would help the company to supply more people living without access to modern utilities and services.
“The funding is further evidence of Japanese interest in Africa and in PAYG [pay as you go] solar energy globally,” he said.
“We look forward to this next phase of growth that will help us to transform more lives, unlock potential and grow our already global footprint by opening up new markets, and develop our product range,”Hamayun said.
Mitsubushi’s power solution group operated about 6 gigawatts of net generation capacity globally as of mid-2019, including some wind and solar generation and energy storage.
About BBOXX
BBOXX, an Imperial London College spinout launched in 2010, has installed about 200,000 home solar systems across Africa, many of them coffee and vanilla bean farmers living off-grid. It networks its solar systems and inverters via its Pulse monitoring technology which allows BBOXX and its rivals to use mobile money to charge customers a monthly fee for the use of mini solar panels and ultra-efficient lighting strips. The fixed-period contracts usually run for about two years, until the equipment is paid off.
Customers can then choose to keep their existing kit and use the electricity for free, or upgrade their system to include more panels and extra appliances under a new contract.
Earlier this year, BBOXX sold a 50% stake in its Togo-based business to EDF Energy in return for funding to help grow the company.
BBOXX hasn’t made batteries a central part of its offering, although it does offer a small, 650 watt-hour system linked with a 300-watt solar array for “households and microbusinesses with unreliable grid connections.”
It does offer liquified petroleum gas (LPG) stoves and canisters filled with biogas under a similar pay-as-you-go program, to allow them to replace more expensive and polluting cooking and heating fuels.
A Look At Global Investment In Off-Grid Startups
According to a March report from Wood Mackenzie Power & Renewables and Energy4Impact, investment in off-grid energy access — primarily residential solar to power lights, cellphones and other household devices, but including microgrids that power entire communities — has risen from nearly nothing in 2010 to a total of nearly $1.7 billion at the end of 2018.
More than $1.2 billion of this investment has occurred over the past two years. A growing share of this money is coming from corporate strategic investors, ranging from oil and gas majors like Shell and Total, European utilities like Engie and EDF, and energy technology providers like Schneider Electric.
Overall, the solar home system market has raised more than $1.1 billion through 2018. Some of the biggest investments include Zola Electric (formerly Off Grid Electric) with $261 million, M-Kopa Solar with $194 million, D.Light with $188.5 million, Lumos with $108 million, Greenlight Planet with $82 million, and Mobisol with $79 million.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.