Asoba creates virtual power plants (VPP) for decentralized energy markets in Sub-Saharan Africa (SSA). Their technology is critical to the rapid adoption of renewables across the region and key to solving grid reliability and resilience that delivers quality of life, safety and opportunity.
They have secured a contract with Eskom, the largest provider of electricity in SSA and seven municipalities across South Africa. Cerulean’s seed investment will be used to execute on Asoba’s opportunity with Eskom in a decentralized energy market pilot. Including projects underway in Cameroon and Uganda, this pilot could contribute significantly to Asoba’s mission to become Africa’s largest clean energy distributor by 2028 in what is today a $3B market.
This is just the first step on a long journey — Asoba has its eye on VPPs, distributed energy resources, and the fintech necessary to finance and scale the type of leapfrog already observed across the African continent in telecoms, but this time, in energy infrastructure. We’re excited the team. Read on below for why.
Why did we invest?
Product-Market Fit: Asoba has built a critical solution for SSA’s rapid expansion of renewable energy and has the potential to become a driving force in decentralized renewable energy for developing and emerging markets.
Revenue and Customer Traction: Current contracted revenues reached $180,000 in booked annual recurring revenue (ARR) and a pipeline in excess of $8M ARR with just under $6M of that under MOU.
Product Platform and Potential for Network Effects: A VPP is by definition a network that grows in value with each new participant. Asoba’s VPP enables intra-country grids and has the potential for cross-border network effects as well.
Experienced and Innovative Leadership Team: Zimbabwe-born, American CEO, Shingai Samudzi, has a strong technical product and management background through roles as Product Development for Machine Learning/AI Ops at Google and Commercial Solar Go-To-Market experience at Lumen Energy. He’s built a hyper-efficient operations team in South Africa and has senior executives on the continent as well as strong strategic channel partnerships with local technology vendors in the energy sector.
What are the risks as we see them?
Market Size: The SSA market for VPP software may not mature as quickly as developed markets and also contain currency, foreign policy and internal political risk.
Business Scaling: Asoba has developed its VPP solution rapidly but is a new entrant in a market challenged by growth and disorder.
Product Complexity: VPPs are not a single-purchased product, but rather part of a larger solution set of products and services combined in new energy generation and grid expansion projects. Utility contracts are low-churn once they are won, but sales may be few and costly.
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