Gridless, a bitcoin mining company founded by Erik Hersman, Janet Maingi and Philip Walton (CEO, COO and CFO respectively) has raised $2 million to bring new energy generation to rural communities in East Africa.
The $2 million seed investment round was led by Alyse Killeen’s Stillmark and Jack Dorsey’s digital payments firm Block, Inc. in addition to an pre-seed round led by Factor[e], who is also participating in this round alongside Stillmark and Block, to help the firm expand its bitcoin mines across African markets.
“Africa needs affordable electricity,” said Erik Hersman, CEO of Gridless. “Our work in supporting renewable energy mini grid developers fills a gap, helping developers expand faster, be more sustainable, and serve thousands of households. This investment, and the high caliber of partners that are coming alongside us, means that we can accelerate our rollout knowing that we have both the capital and strategic support required.”
Gridless designs, builds, and operates bitcoin mining sites alongside small-scale renewable energy producers in rural Africa where excess energy is not utilized. Gridless wants finance the construction and managing the operation of data centers in rural communities where traditional industrial or commercial customers are not available and has contracted five project pilots in rural Kenya with HydroBox, an African hydroelectric energy company, three of which are currently operational.
According to the Alliance for Rural Electrification, there are over 600 million people in sub-saharan Africa without access to electricity. The key approach for meeting this energy requirement will be the development of distributed generation and mini-grids. Kenya, and Africa in general, have some of the best untapped renewable energy capacity.
In 2020, more than 50% of people across Africa were without electricity. There is immense demand for reliable, clean, and affordable energy, yet mini-grid energy generators struggle for sustainability. Gridless believes bitcoin mining can play a pivotal role as a buyer of first and last resort in creating more sustainable energy production and increasing electrification for local communities in the region. The electricity generated from these sites is prioritized for community electrification and to support community uplift business such as containerized cold storage for local farmers, battery charging stations for electric motorcycles, and public WiFi points. After those needs are met, the remaining electricity capacity is used to power the bitcoin computational mining datacenter. Data centers are dynamic offtakers and can easily reduce capacity to adjust to the needs of the community, and depending upon the type and availability of the energy can use new and efficient, or older less efficient, bitcoin mining machines.
“While bitcoin mining has been dominant in North America, Europe and Asia, Africa presents a great opportunity to further diversify mining across the globe, helping to better secure the network,” added Hersman. “Renewable energy is abundant on the continent. This presents excellent potential for profits for both energy generators and miners as well as the ability to deliver real positive impact on the communities where it is put to use.”
Though there is an increasing demand for reliable, clean, and affordable energy across Africa, mini-grid energy generators struggle for sustainability, Gridless, will therefore work with renewable, rural, mini-grid energy generators to monetize the full capacity of their output as a buyer of last resort, as well as serving as an anchor tenant for new energy generation creation.
“Block is keenly focused on helping to accelerate global renewable hashrate. Gridless represents a close strategic alignment with our vision of ensuring the bitcoin network increasingly leverages clean energy, in combination with bitcoin computational centers around the world,” said Thomas Templeton, Lead for bitcoin mining and wallet at Block. “This work can support positive community externalities while also helping to secure the distributed infrastructure behind bitcoin’s monetary ecosystem.”
Hersman has build and sold iHub, the country’s first community workspace and went on to co-found Gearbox and BRCK with a mission to build the most reliable internet routers in the world. BRCK builds routers and software and communications equipment for people, businesses, and organizations in need of resilient and reliable communications. It’s here that the idea of Gridless was born coupled with the loosening regulatory environment by the Kenyan government for projects under 1MW in recent years, which saw an increase in new mini-grid energy projects all over the country, including solar, wind, geothermal, and hydro.
“Stillmark is focused on investing in companies that are helping to advance the Bitcoin ecosystem in ways that offer sustainable value and solutions to many,” says Alyse Killeen, Managing Partner at Stillmark. “Gridless does this by bringing a socially and environmentally conscious approach to bitcoin mining, one that provides tangible benefits by way of access to electricity for communities in rural parts of East Africa.”