Providing Cheap Energy To East Africa

An inspiring group of MBAs hit upon an innovative solution

Xavier Helgesen had dealt with more than a few unexpected twists since moving to Tanzania after graduating from Oxford University’s Saïd Business School in 2011. But this one left him stumped.

Xavier Helgesen had dealt with more than a few unexpected twists since moving to Tanzania after graduating from Oxford University’s Saïd Business School in 2011. But this one left him stumped.

The villagers using his company’s solar lighting kits put the brightest light on the porch, leaving the inside of their homes dark. Nothing he’d studied in Oxford’s venerable classrooms held the answer. So he went back to his customers, primarily poor Tanzanians living without electricity, for the answer.

He learned that the company’s LED lights had become something of a status symbol; leaving it outside was comparable to parking a new car in the driveway. Plus, people tended to spend most of their time outdoors, so it made sense to illuminate their primary living space.

This was one of many lessons Helgesen would learn after co-founding Off Grid Electric in 2012 with fellow Oxford MBA Erica Mackey and Joshua Piece, the company’s CTO. Off Grid Electric provides pre-paid solar energy at affordable prices to people living off the grid, meaning those who aren’t connected to electricity or simply can’t afford it.

For $6, Off Grid Electric will install a home solar kit, which includes solar panels, LED lights, a meter, and a USB charger for cell phones. Customers then pay via mobile phones to unlock the energy they need. Off Grid claims their pricing is equal to or less than what customers currently pay for kerosene, batteries, and phone-charging services. In a country where only 15% of the population had access to electricity in 2012, according to the World Bank, the market demand is obvious. Still, getting investors on board is a different story.

A SOCIAL ENERPRISE WITH PRIVATE-SECTOR STANDARDS

Though ostensibly a social enterprise, Helgesen eschews the squishiness of the term, which can be slapped on just about anything these days. He’d prefer to measure Off Grid Electric against the same metrics used to assess private sector businesses. “Honestly, I think we would probably rank well if you just wanted to put us in the venture fund category,” he says matter-of-factly.

He’s right. The company came in at No. 16 on Poets&Quants’ Top MBA Startups of 2016 after raising a whopping $51 million in venture capital. If you include debt financing, grants, and prizes, that number doubles to approximately $108 million.  While most of their investors have a social enterprise bent, it’s a list any startup founder would envy: SolarCity; DBL Partners; Omidyar Network; and Vulcan Capital, a fund by Microsoft co-founder Paul Allen.

The company’s ambitions also square more with the private sector than most social enterprises or nonprofits. Off Grid Electric provides electricity to 10,000 households and an average of 50,000 people each month. They’ve expanded to Rwanda this year and plan to reach 1 million homes by 2017.