NovoMoto

Life Changing, Affordable & Clean Electricity for Off-Grid Customers in Africa

Background 

NovoMoto is a for-profit social enterprise that provides clean electricity for off-grid communities in sub-Saharan Africa. 

The company was started out of Madison, WI, where founders Mehrdad and Aaron met and completed their PhDs in Engineering.  NovoMoto started serving customers in the Democratic Republic of Congo, where one of the founders, Aaron, was born.

Problem
Aaron was born in a small clinic in a city called Kikwit. There was no electricity in the clinic. All his mom had in the room was a dim kerosene lamp. That was over 30 years ago, and now across Congo, the situation is worse.  To the point where the greater Madison area, with only 0.7 million people, has more power than all of Congo and its population of 80 million.

This means that over 90% of the population lacks access to reliable electricity. 73 million people.

The average Congolese family spends nearly about $18 per month on electricity alternatives like dim and potentially dangerous kerosene lamps, candles and flashlights. These options only provide a few hours of light per night and force families to leave their phones to charge for hours at kiosks powered by diesel generators.

Solution

We enable a brighter life for our customers with reliable and affordable electricity. Our customers get brighter and longer lasting lighting for themselves and their children along with the ability to charge their phones at their convenience. All this for less than the cost of inferior solutions.

We do this by installing complete solar power packages with a rent-to-own approach.  The packages range from kits with three LED lamps and phone charging to kits with TVs and more.

We make our solutions affordable by allowing our screened customers to pay us in increments over at most 18 months. Customers pay us through their phone and receive text messages with codes to keep their systems activated.

As customers pay off their packages, they become eligible for upgrades that allow them to power more of the appliances they need at their home or small business.

Product Portfolio

NovoMoto offers rent-to-own solar-powered systems. NovoMoto's systems consist of a battery pack connected to a solar panel and energy-efficient appliances. This battery pack both powers the appliances and enables mobile phone charging. The packages offered and their payment plans are described below:

Market & Opportunity

Across sub-Saharan Africa, there are an estimated 120 million families without access to reliable electricity. They spend over $25 billion annually ($18/home per month) on grid alternatives for lighting and phone charging.  Congo has the third largest off grid population on the continent with about 15 million families who currently spend over $3 billion each year on lighting and phone charging.

NovoMoto has become one of the first movers in the country with our operations in the western part of the country. In the 5 western-most provinces, there are over 3.5 million homes who spend over $740 million annually on lighting and phone charging.  We already have customers, just outside of the capital, in more than 10 communities where there are at least 700,000 potential customers. 

We are the only company offering rent-to-own packages in this part of the country and one of only 3 using the pay-as-you-go approach in the entire country.

To get this far we have raised $500,000 in grants, debt and equity from our great investors. Their support has allowed us to go from just 20 pilot customers in 2017, to nearly 180 by the end of last year, and to over 300 so far in 2019.

We want to serve 5,000 customers by the end of 2020. We need $1.5 million to take this step.  Meeting our 2020 milestone would put us in a great position to reach profitability by the end of 2021 with over 25,000 projected customers. 

After building a significant presence across Congo, we want to change lives by bringing reliable electricity to over 1 million people across sub-Saharan Africa by 2026. In doing so, NovoMoto would become a target for acquisition or merger by the large energy firms like Engie (who recently acquired two companies in our industry in Africa) that have already invested over $840M in the off-grid energy industry.

Team
We are a strong team of passionate founders, employees, advisors, and investors. With you we will have everything we need to achieve our mission.

Founders

While finishing graduate school, Mehrdad and Aaron, validated the NovoMoto business model and turned an idea into a revenue-generating company with a strong team of managers, sales ambassadors, and technicians in Congo.

Mehrdad Arjmand (Co-Founder/CEO, Ph.D.) 

Mehrdad completed his Ph.D. in Engineering Mechanics at the Materials Research Science and Engineering Center at the University of Wisconsin-Madison. Mehrdad worked in the oil and gas industry before starting his Ph.D. Mehrdad is passionate to work in the renewable energy sector and enjoys serving customers in emerging markets with huge potentials and opportunities.

Aaron Olson (Co-Founder/CEO, Ph.D.) 

Aaron completed his Ph.D. in Engineering Mechanics at the Fusion Technology Institute at the University of Wisconsin-Madison. Aaron is a NASA Space Technology Research Fellow and a Graduate Engineering Research Scholars Fellow. Aaron is originally from Kikwit, DRC and co-founded NovoMoto to help solve the extreme lack of electricity in his home country.

Social Impact

Most of NovoMoto's customers are gaining access to electricity in their homes for the first time!  They immediately benefit from a far superior lighting experience. Those that are switching from using kerosene lamps are saving their families from inhaling toxic fumes. 

As part of NovoMoto's new marketing strategy, 25 clinics share information about NovoMoto's systems to their patients and community in exchange for a lighting and phone charging system that will help them better serve patients.

Competitors

Retailers of kerosene, candles, and disposable battery flashlights are NovoMoto’s largest competitor in DRC. There are local companies that retail solar power equipment in DRC, but these companies charge high upfront costs that are unsuitable for most off-grid families. One other Pay-As-You-Go (PAYG) company is active in the western part of DRC. Their solutions are more expensive and are offered on a perpetual lease, thus making them even more expensive than the rent-to-own NovoMoto solutions. A comparison of lighting & phone charging solutions in NovoMoto’s target market is below:

• PAYG Competitors in DRC: BBOXX, Orange Energie
• Potential PAYG competitors, not active in DRC: Standalone solar system providers such as Zola, Azuri, M-Kopa, Fenix International, and microgrid providers including Devergy and Powerhive

Comparables

Impact Energies was acquired by Persistent Energy Partners in Q1 2014 for an undisclosed amount while it had 5000 customers. Fenix International was acquired by Engie, a French utility, in Q4 2017 for an undisclosed amount (estimated to be ~$100M) while it had 140,000 customers. The industry attracted over $840 million in strategic investment by the end of 2018. The table below shows some investments into PAYG firms in other African markets:

Financing and Milestones