PayGo Energy, a smart-meter pay-as-you-go LPG provider has raised US $1.43M in Series Seed debt and equity financing led by Novastar Ventures, Energy Access Ventures and Village Capital with participation from Global Innovation Fund and Global Partnerships/Eleos Social Venture Fund to support the expansion of its team and customer base in Nairobi, the development of its software platform and next generation smart meter.
Targeting to provide clean cooking fuel for the mass market, PayGo Energy allows households which cannot afford upfront LPG costs to have the cylinders and use the clean burning LPG yet pay in small daily, weekly or monthly installments.
According to PayGo Energy’s CEO Nick Quintong, “A billion households are forced to cook with dirty fuels everyday, which is not only a serious development challenge, but also a significant market opportunity. This financing will allow us to invest deeply in our technology, build a service that our customers love and prepare for commercial roll-out.”
Launched in pilot in 2016, PayGo Energy has developed a steady customer base in Nairobi that has welcomed the innovation of pay-per-use cooking via mobile money. The company currently has an international team committed to launching PayGo’s hardware and software technology across the region. By revolutionizing the distribution of cooking gas for as little as $0.50/day, PayGo Energy helps households to get rid of harmful fuels like charcoal and kerosene, that expose households to health and safety risks and instead use cleaner Liquefied Petroleum Gas (LPG) which is currently beyond their economic reach.
PayGo Energy impressed Mark Zuckerberg, on his visit to the country and he said: “It’s inspiring to see how engineers here are using mobile money to build businesses and help their community.”
As one of the investors, Novastar Ventures believes that PayGo has the potential to transform the way urban Africa cooks—leapfrogging the need for expensive fixed infrastructure to access cooking gas by using pay-as-you-go technology and an innovative operating model to shift households away from the use of charcoal and kerosene to clean, efficient LPG. These views are shared by Energy Access Ventures, a venture firm that focuses on investing in the growing number of dynamic and innovative companies that are taking on the challenge of energy access in Africa.
“EAV is delighted to be part of PayGo’s round. We are excited by the tremendous potential the company’s technology has to significantly increase uptake of LPG in the home outside of wealthy, urban areas in Sub-Saharan Africa in a way that is highly impactful and commercially promising. In addition, we were most impressed with the Paygo team, who have consistently shown entrepreneurial drive coupled with a passion for making a difference.” – Dr Michael Gera, Managing Partner of EAV.
The Global Innovation Fund (GIF), a nonprofit innovation fund that invests in the piloting, rigorous testing, and scaling of innovations targeted at improving the lives of the poorest people in developing countries is proud to support PayGo Energy in providing a supply of affordable, clean gas to their customers, with the aim of reducing the use of cheap but potentially more dangerous fuels such as charcoal and kerosene, which have been linked to a range of health risks such as burns, respiratory diseases, and cataracts.
In Kenya, Global Partnerships/Eleos Social Venture Fund has also invested in Eneza Education, Penda Health and Sanergy.