DISRUPT AFRICA: Solar startup Oolu raises funding to expand outside Senegal

 

Senegal-based solar startup Oolu has raised funding from a number of investors, including US accelerator programme Y Combinator, to begin its expansion across the West African region.

Oolu was founded after co-founder Nilmi Senaratna spent a year living in a rural community in Senegal while working on a renewable energy project for the United Nations Environment Programme (UNEP), and saw the challenges local people faced with power supply.

“I faced the unacceptable energy poverty of my friends there every day. Last year, seeing the plummeting cost of solar and storage and the spread of mobile money in West Africa, I understood that solving this problem through solar was a compelling business case as well,” she told Disrupt Africa.

Senaratna left her job, formed a team, and launched Oolu, which leases solar home systems to off-grid households in West Africa. Clients pay a monthly fee, with rates depending on operational costs in different regions and payment methods – clients are offered a discount for paying via mobile money.

“We tested several business models in an initial trial period, but began to scale last month after raising a seed round and securing a partnership with Orange Money. Between the Dakar office and regional staff, we now have a passionate and fun group of ten team members in Senegal,” Senaratna said.

“We built our model to balance both the desire to reach as many people in each village as possible and the importance of developing a strong portfolio of leases with a quick payback period.”

By the end of the summer, Oolu is likely to be approaching 1,500 installations in Senegal, with Senaratna saying expansion into other West African markets is on the agenda after its seed round, primarily from San Francisco-based angel investors. Y Combinator invested US$120,000, while Oolu has reopened the round as it looks for more.

“Being accepted into Y Combinator this summer, we knew it would allow us to scale and reach more people faster than we had imagined. The programme has lived up to its stellar reputation, and our advisers and fellow entrepreneurs have been incredible sources of support,” she said.

Senaratna said while East Africa had seen “astounding” growth in the off-grid solar industry, West Africa – the French-speaking nations in particular – has not seen the same growth. This is the opportunity Oolu is looking to take advantage of.

“Also, our leasing model, which includes battery replacement and maintenance, also allows a high percentage of people in each village to sign up with Oolu. This works much better in rural regions than a firm selling solar systems on an upfront cash basis to urban and peri-urban consumers or a short-term loan,” she said.

A number of solar startups are making waves across Africa right now, with funding on the increase, but Senaratna said Oolu differs from other companies in two ways.

“First, we focus first on creating strong relationships with our clients and communities. These are built through excellent customer service and work with local mayors and village chiefs,” she said.

“Second, we are a technology firm bringing modern services to rural people. This means that we are constantly innovating to improve our offerings, our training procedures, and our data management to more effectively serve our clients.”

Even without these differences, the size of the opportunity means there is plenty of room for a number of different companies to operate and scale successfully.

“With so many millions of households in Sub-Saharan Africa who still use kerosene, candles, flashlights, and lanterns to light their homes, the market is massive. In much of West Africa, the industry is in its infancy, and we are in a position to scale rapidly,” Senaratna said.

Opportunities abound in the industry.

“Solar saves people money and can power devices people want. Because of these factors, there are massive opportunities in the market,” she said.

“Beyond lighting, we’re especially excited about the potential of solar to help connect rural people. Africa is growing so rapidly and its consumers crave access to television, radio, and the internet through smartphones and laptops. For most rural communities, distributed solar solutions will power these devices.”