Qotto, a solar kit provider with operations in Burkina Faso and Benin, has secured $8 million in a Series A equity-debt deal led by the IBL group, a billion-dollar Mauritius-based conglomerate with holdings in energy, financial services, transportation, distribution, and engineering.
The round was also attended by the Off-Grid Energy Access Fund (FEI-OGEF), Cordaid, and Qotto’s current investors.
Qotto intends to use the capital to scale in existing markets and expand to Ivory Coast, where it aims to begin operations next month.
A Look At What The Startup Does
Qotto, which was founded in 2016, produces and distributes standalone solar kits and lamps to people living in Africa’s least electrified areas. It makes its products available to those in Sub-Saharan Africa who are off-grid due to inadequate national power grids using a pay-to-own strategy.
“For Ivory Coast, due to its consistent pace of development relative to the broader West Africa region, and after having tested and optimized operations and services in Benin and Burkina Faso, Qotto is well prepared for a market entry. Moreover, the customers who have been able to test the Qotto products in the country have expressed a need and desire to see Qotto enter the Ivory Coast market,” said Qotto co-founder and president, Jean-Baptiste Lenoir.
According to Qotto, IBL is also planning its East African growth after striking a collaboration and promising to offer off-grid solutions in the region. The growth will take place alongside that of IBL, which plans to “strengthen its position in East Africa and develop its renewable energies exposure” by September of this year.
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“Together, we see a great opportunity for the essential services and large Solar Home Systems offerings provided by Qotto,” said Lenoir.
The expansion proposal follows the planned market introduction of new products, such as financial services and internet access hotspots, as Qotto evolves into an all-around critical services operator.
“Our edge is that our presence in rural areas allows us to understand the customers and their needs so that we can propose innovative products based on our technical platform,” he said.
Micro-insurance, micro-credit, and micro-savings solutions are being developed in partnership with partners such as SUNU, a prominent insurer in West Africa. Qotto claims to have sold thousands of life insurance contracts.
The internet hotspots will be placed in high-traffic areas such as shops, restaurants, and bars.
“In sub-Saharan Africa, 650 million people do not have access to electricity, 550 million do not have access to the internet and 800 million do not have access to financial services. Many of these customers are overlapping in their needs for off-grid solutions, connectivity and financial services,” said Lenoir.
“Our model helps to solve these critical issues under a single solution — which we call ‘essential services,’ backed by our proprietary technology stack. In addition, we are aligned with the SDGs to serve customers and improve impact indicators in our markets,” he said.
Companies like Qotto are bridging the energy access gap in the world’s least electrified countries, including South Sudan, Burundi, Chad, Malawi, Burkina Faso, Madagascar, and Tanzania, all of which are located in Sub-Saharan Africa, which accounts for 75% of the world’s population without access to electricity.
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Qotto claims that its revenue has increased by 50% year on year, and that it has 11,000 active customers at the end of last year, which it expects to more than double by the end of this year if its growth plans are followed.
Qotto Solar kit
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard