Hope you’re well.
For the last few months, I’ve been having monthly calls with newsletter subscribers about what they’re building and their thoughts on hardware on the continent. If this sounds like you, join us!
In case you missed it, here is last month’s newsletter.
Clean tech companies, led by solar energy startups, have attracted a significant amount of investment on the continent recently. Abubakar Idris noted in January that startups in this industry attracted 22% of the investments in the continent last year. That has not let down, with companies like Ampersand who raised $3.5m last month. The Rwandan company makes electric motorbikes and has swap centres where commercial motorcycle owners (their target market) can replace their batteries when low.
So let’s focus on solar energy companies. The appeal makes sense: the continent is severely under-electrified and expanding access to people mostly in rural areas provides a large addressable market. In turn, the cost of solar panels is reducing while their capacities are improving day after day. In a sense, it’s a no brainer. Except that there have been investment booms like this one before with a seemingly large addressable market too: e-Commerce. That did not pan out so well.
For many people, the cost of solar energy for their electricity needs is still out of reach. Although, with solar panel manufacturing moving to the continent with companies like Auxano and with battery recycling at the level that Aceleron is providing that might improve. Yet most of the continent has a GDP per capita of about US$1600, so that might take a while. I don’t think investments primarily made to address this “access gap” are going to be successful if they don’t address the financial gap too.
There are a couple of startups with business models that do this. Rensource’s focus on urban markets is good for a couple of reasons: markets typically don’t use power round the clock and their peak usage would correlate with peak power generation from solar panels. M-KOPA’s asset financing model is smart because building credit is useful for a lot more things than providing electricity - they just expanded to Nigeria in the last month. Still, this space is better served by very patient capital or impact investments.
Gearbox is Kenya’s flagship makerspace and has served as the home to many of its leading hardware companies. Two years ago, they started their Machine-Ani initiative which gives artisans to access to high-end machinery for as little as $5. Mercy Adhiambo writes from Nairobi about how well this initiative is doing.
Last November, Wamboga shared Ethiopia’s plans to dam the Nile for hydroelectric power and how that could affect Sudan and Egypt. As all countries are still deadlocked, researchers have presented a new proposal articulating solar and wind power that could fix some of the contentious issues.
Hand tools are a staple in any hardware store and when made locally they can have a huge market. I came across Wondwossen Adem’s graduate paper on using lean manufacturing methods to enhance the productivity of hand tool manufacturers in Ethiopia. Complement that article with this paper about the difficulties with implementing lean manufacturing methods for manufacturers in East Africa.
Tira Robots is producing industrial robotic arms for production lines. [Tunisia]
SAJA is building solar-powered charging stations in urban centres. [Nigeria]
JoynX produces high-voltage couplers for the mining industry. [South Africa]
The European Union is receiving proposals for agro-tech initiatives in Sierra Leone; the aim of this fund is to develop and/or expand sustainable agro-processing and agribusiness innovation and technology.
Deadline: June 1.
The Africa Prize for Engineering Innovation is open for applications for the 2022 edition.
Deadline: July 20.
In Madagascar, Aerial Metric is building drones for surveying and mapping in the country’s particularly challenging terrain.
Until next time,