Hapana kuna kipindi nilitokea kumsoma huyu founder wao na hii Kampuni na Business Model yao... Hii ni article kutoka financial times....
Mobisol: a cautionary tale for impact investors
European company seen as the rock star of the solar energy industry files for insolvency
It is simply impossible to be cooler than Mobisol, the Berlin-based provider of battery-backed solar systems to homes and microenterprises in Africa. Everyone loves the picture of a village girl reading her books with a lamp powered by bright, clean electricity rather than smoky paraffin. That electricity is earning you profits, which is why you got into impact investing in the first place.
Then there has been the world-class quality of Mobisol’s presentations, from the wired-up founders on stage at international meetings to the perfectly produced videos and graphics. These expounded market prospects as big as Uber’s or Tesla’s (A billion people now! Four billion by the end of the century!) and German engineering, not only for rich BMW owners but for the rural poor! Prestigious co-investors such as the IFC, Investec, the Dutch state’s FMO and Finnfund have been there to give comfort in numbers and solidity.
Mobisol’s solar powersets proliferated by the tens of thousands in Kenya, Tanzania and Rwanda. And, of course, the Mobisol office is in the hip Berlin neighbourhood of Kreuzberg. Late workers among the dozens of young staff could take a 10 or 15-minute walk to edgy clubs such as SO36 and Madame Claude. You wish you could be them at that age. As one solar energy industry person says: “They were the rock stars of this industry.” At least they were until the beginning of this year, when Thomas Gottschalk, a founder, and Thomas Duveau, head of business development, left to start up Access to Energy Institute, a not-for-profit with an address in the same Kreuzberg building.*
Mobisol was in suspense until April 26, when the company filed for “insolvency in self-administration” with the Charlottenburg district court. Andrew Goodwin, a South African-born engineer, has been appointed by the investors and lenders as the new managing director, with support from Friedemann Schade, the “provisional administrator”, and the restructuring group of Dentons, the law firm.
Basically, Mobisol is in the German version of the US’s Chapter 11. This is actually a good thing. The company had been floating along for more than nine years with equity and debt injections from the development finance and impact investing communities. No balance sheet or income statements have been provided to the public but it appears that Mobisol had raised $80m-$90m, about two-thirds in the form of equity and one-third in debt. It will be useful for the impact investing community to get the lessons-learnt report from Mobisol’s crash.
The company’s business model has been based on a lease-to-own concept, with periodic payments made through mobile phones. An African farming family with limited cash could pay for their solar and battery system over three to four years. That sounded good; over the same time more might be spent on paraffin or extortionate fees to recharge mobile phones. But it was too good to be true. Mr Goodwin is still getting a grip on Mobisol’s restructuring, having only arrived in January. He says the real struggle Mobisol has “is not transparency or management but the economic metrics”. “First is affordability. You are sending a first world technology into the third world. The farmers (in Mobisol’s target markets) are earning one to one-and-a-half euros a day. That is very different to a Californian company putting a solar panel on a rooftop.”
The decline in solar panel and battery technology prices creates a problem for anyone financing the purchase of a system over several years. “You are continually faced with (ever) lower-cost imported products,” Mr Goodwin says. Mobisol was a pioneer in commercially addressing the solar market in Africa but now there is a host of competitors willing to lose money, at least for a while, on similar business models. Mobisol has attempted to compete by providing a warranty and service.
As Mr Goodwin says, though: “In the long run that is a better deal for the consumer but it places a tremendous strain on a company like Mobisol.” To an outsider, those 100 staffers in Kreuzberg (now down to about 60) might look a bit indulgent, but there were products to develop — perhaps too many — and a portfolio of 85,000 customers to administer. Then there were staff in Africa, trucks to get to remote customers, manufacturers in China to liaise with . . . cuts in costs are being made, but the spending requirements went beyond travel expenses to conferences and graphic design.
As Mr Goodwin recounts: “The view was that we would be able to increase prices over time, which did not turn out to be the case. The second issue is that sales volumes have been affected by the pressure from new competitors.” Also, Mobisol’s markets have lately been subject to ruinous droughts and the economic effects of commodity price declines. Customers who thought they could pay were broke. And while Mobisol can cut off service for non-payment, how do you repossess the equipment when that happens? Impact investors should ask the difficult questions throughout the development process. They should also try to avoid being seduced by coolness and virtue-signalling.
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