Last month, several Persistent team members attended the Global Off-Grid Solar Forum and Expo in Nairobi, Kenya. They participated in two panels, facilitating discussions and demonstrating their expertise and commitment to the sector. In addition to the panels, the event was a great opportunity to share knowledge and network with other players in the off-grid space.
Persistent Venture Advisor Eva Stolz said the workshop with entrepreneurs showed that key challenges to building businesses include putting the right governance in place – such as a strategic yet not too operational board – and hiring a team for their skills, values and beliefs. Additionally, financial topics around unit economics, fundraising and understanding the investor landscape remain a key challenge. The IFC and Persistent shared a few tools to help businesses prepare for fundraising, for example on getting the unit economics right from the start by considering risk and cost of capital.
Persistent Co-Founder Dirk Muench said “As companies have taken longer to reach breakeven and profitability, equity investments in the sector have not done well overall. This leads to a situation today where debt funds are competing for deals and – at times – may have taken more risk than they are compensated for, while new equity is in very short supply.”
There was a mix of optimism and realism with regards to the outlook of the sector, and with plenty of capital to still be deployed int the sector, there will be an interesting dynamic to future growth.