“Fledgling” Startups Provide Power, Light, and Food in East Africa
Three of the startup companies graduating from Seattle incubator Fledge on Wednesday are focused on doing well by doing good in one particular East African country: Tanzania.
These entrepreneurs—hailing from outside Toronto, the Bay Area, and the foot of Mt. Kilimanjaro—found and applied for Fledge in the typical ways. But over the course of the 10-week business development and mentorship program, they say they have all benefited from a mutual focus on a part of the world that isn’t often associated with innovation, but probably should be.
“There is a huge opportunity in Africa, especially in emerging markets,” says Elia Timotheo, director of EA Fruits Farm, which is modernizing Tanzanian agriculture. He adds, “People have ideas in East Africa. They don’t know where to take their ideas.”
“We had three awesome applications from Tanzania,” says Libes, rushing between events at the Impact Hub Seattle, where Fledge is housed. “Simple as that.”
Fledge, which Libes describes as the “conscious company” incubator, received the majority of its 114 applications for the spring 2014 session from outside the U.S.; 32 countries were represented in the applicant pool. It ultimately settled on six startups, only one of which is based in Seattle. The companies receive a $15,000 investment in exchange for a small equity stake and percentage of future revenue.
“In less than two years, Fledge has grown from a Seattle-centric accelerator of idea-stage companies, to a recognized, global accelerator of established impactful startups,” Libes wrote in a March post introducing the latest “fledglings.”
The entrepreneurs behind Juabar, Karibu Solar Power, and EA Fruits Farm say they have benefitted from the coincidence of their shared focus on Tanzania in several ways.
Olivia Nava, co-founder with Sachi DeCou of Juabar, which leases solar-powered kiosks that form the basis of a micro-business recharging mobile phones, says it can be hard to explain to potential U.S. investors the basic context of a place like Tanzania.
“What do you mean there’s no outlets?” says Nava, 36, mimicking a typical reaction to one of the fundamental factors driving the need for the Juabar (which means sun bar in Swahili). “We take electricity so for granted here, and it’s so cheap that to think about paying somebody to charge your phone” can confuse the typical Westerner used to plugging in for free at an airport or cafe.
The fact that it takes some doing to find a source of electricity can, for Westerners, make it seem all the weirder that mobile phones have been so widely adopted in Tanzania, where they’re commonly used for things like mobile banking and payments.
Having three companies working in Tanzania pitching from the same pulpit Nava hopes, will paint a fuller picture to investors, providing details—and understanding through repetition, perhaps—that she couldn’t offer in a single presentation.
“A lot of the challenge is almost being a bridge-builder around what’s the reality of culture in Africa,” Nava says.
Brothers Adam and Brian Camenzuli are also building a business with solar energy as a key component. Karibu Solar Power, which they co-founded with Sameer Gulamani, is working on a system that combines a solar panel, two LED lamps, and a recharging system to sell to small shopkeepers. The shopkeepers in turn sell the lamps (which can also recharge mobile phones) and recharging service to customers at a cost that’s competitive with the dangerous, dirty kerosene lamps they would replace.
They started trying to sell a batch of 2,000 solar lamps directly to customers in Tanzania, but found that even at an up-front cost of $20 to $30, the country’s rural poor could not afford them. They’re now testing a redesigned, modular system that allows one of the lamps to go home with customers, who come back to the shop to trade it out for a recharged one. This pay-as-you-go business model eliminates the high up-front cost from the equation, potentially creating an attractive offering for a huge potential market, says Adam Camenzuli, 25.
“The off-grid population across Sub-Saharan Africa is pretty immense,” he says. “About half a billion people, including 20 million or more in Tanzania” don’t have access to utility power.
Brian Camenzuli, 23, who has been working on the design of the Karibu system, says he has sought advice on particular ways lamps are used and even things like popular colors from fellow Fledge entrepreneur Elia Timotheo, who is from Moshi, a town in northern Tanzania at the base of Mt. Kilimanjaro.
“We asked him for feedback and he provided really good intel,” Brian Camenzuli say. (The company plans to launch a crowd-funding campaign soon to support manufacturing of its new systems.)
Timotheo, who is also 23 and on his first trip the U.S., started EA Fruits Farm in 2011 to improve the economics of small-scale farming and reduce food waste in Tanzanian agriculture, which he says amounts to 48 percent of farm production, compared to a U.S. rate of less than 10 percent. That amounts to $7 billion a year in lost value, he says, more than the U.S. food assistance budget to his country.
Most of the waste is due to spoilage, because Tanzania lacks a modern system of refrigerated transportation to get fresh fruits and vegetables to market.
Timotheo began by aggregating harvests from small-scale farmers, and cleaning and packaging their produce for sale to customers willing to pay more for a premium product. His company works with some 50 farmers who have seen their average income go from about $500 a year to more than $2,900 a year. The next step is to raise capital to buy cold-storage facilities and refrigerator trucks to further improve the quality and quantity of fresh produce farmers can bring to market.
“I see there is a brighter future ahead,” he says.
During Fledge, he’s focused on learning about modern “cold-chain” logistics from companies including Charlie’s Produce. Timotheo, who has studied international finance and economics in addition to agriculture, says he will also be taking home new ideas for how to spur entrepreneurship—something that’s the subject of much talk in Tanzania, but little action.
“Places where people can meet and share their ideas and build teams and startups is a very important factor for development,” he says. “We can try to find a way to create hubs where young people can gather and give out their ideas, and see how we can support them.”