How Unbundling Pay-As-You-Go Business Models is Driving Market Expansion

How Unbundling Pay-As-You-Go Business Models is Driving Market Expansion

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Hello. Everyone welcome, to the webinar, well. Please you can join us and our three, fantastic speakers. To. Discuss, the unbundling. Of the pay-go, markets. Now. I'm told this is a record, number, of registrants. For a Googler, webinar. So, this is clearly a topic that captures. People's, attention and, great. To have so many people joining. Us today I can see the number, of attendees is is. Going. Up and. Up cool. So, my name is drew carbon I'm the, program manager for quality, and consumer. Protection, at Googler and I'll be moderating, the. Webinar today, and. This, webinar, has been, co-created. By Googler. And, BFA. And. For anyone who isn't familiar. Go. Glare is the. Industry. Association. For, the off-grid solar, industry. And we. Have 135. Members, who are active, in the off-grid solar industry. Manufacturers. Distributors. Technology. Service, providers, and. Investors. Other, people with an interest in the sector, it's. Our mission to build sustainable, commercial, markets, that. Provide quality, and affordable. Off-grid. Solar products, to, the two billion people on, the planet living. In off-grid our weak greedy, areas and. We're. Really pleased to be working with BFA. On this webinar. The. Fiber program, which. Sits under BFA as the lots of coal work on technology, innovation, and we'll, be hearing more from Jacob. Shortly he'll it, was an introduction, to the unbundling. Phenomenon, and some of the market, trends before. We move on to a panel, discussion with two leaders in the pay-go sector, that's, on Gaza and peg Africa, that will share, some. Of their, experiences. And insights and, then. We will have opportunity. For for, you the audience to. Ask. Questions. Cool. And. Also this this, webinar marks, the launch of Technology. And business innovation. Showcase series which, is something that we're. Golga are really excited. About we're. Planning a series of webinars. Blogs. And, events, to. Showcase. Some of the. Exciting. Technology. And business innovation. In the sector really, show off what. Our members, are, doing. On, these fronts and, try. And promote innovation. Learning. Create, more more linkages, within. The sector, so. As. I said this is the the first of a new series something of a pilot. In, its own right and. Yeah. We look forward to doing. More in. 2019. So watch this space for. I mean events. Students, have come in in there in. The question this webinar is being recorded and, will be. I'm the Googler sight after the event. You. Please. Do put them in the in the box and you'll be top of the list when we get to the Q&A if, the, question is for a particular particular problem, please. Indicate, this and. Then. I can direct. Direct. The question, accordingly. So. The. Theme of this webinar is around how. Unbundling. Of the. The pay-go business, model is driving. Market, expansion and. This. Is something that we've seen you. Know over the last last, few years just, five years ago new. Entrants Pago markets, were all vertically, integrated. Everyone. Did everything the. Proprietary, hardware software. Distribution. Business. And, consumer. Financing. But. Times. Have changed. There's. Now more than 100, companies. Active, in there, in the pay-go markets, as manufacturers. Software.

Providers. Specialists. Tech. Firms. Distributors. A whole. Range of of. Companies, and a. Specializing. On in different different, business, models and creating. Their, own niche, this. Has led to. An. Expansion you know beyond the initial. Pago, countries, in East Africa, you know Kenya Uganda Tanzania and it's, now you. Can now find, you. Know pay-go offering. In more than 35 countries, so. Going beyond East Africa, West, Africa Southern, Africa South. Asia and Latin. America. And. There's now more than, 2.5, million, Pago customers. You. Know considering, back, in 2012-2013. There was a base of virtually, zero that's, a fairly rapid. Trajectory. And. This webinar is exploring. How unbundling. Of the pay-go technology, and business model is driving, this market expansion, so. What, do we mean by market, expansion, just. This more, companies, more. Countries. More. Companies. New, types of companies, and more. Customers. Corsa, that's, it for my introduction I'm not going to pass over to Jacob. From. BFA. The, fiber program, who's, going to tell us more about this unbundling, program, sorry, this unbundling, process, before, we go to the panel, discussion, now. As a way of the introduction, Jacob. Is a senior, associate, with, BFA. And been, leading, some. Of the work. That they've been doing with with. Distributors. And manufacturers. Around. This this unbundling, process so it's got a really interesting. Perspective. And, some strong experience, to share with us and. If, you haven't already read, Jacobs blog on medium I certainly, encourage you to, do so. Jacob. Let me pass, you the floor. You. Are, muted. I believe self muted. Now. How, does it look can. You see my screen either hear me yeah, perfect, perfect all right thanks true yeah I'm happy, to be here. This. Is kind, of an overview of what I want to try to cover in. About 15. Minutes so I want to kind of give an overview of, unbundling. How it's been happening in, the, pay-go sector talk. About the implications, for market, expansion and some of the things that we've learned in the, last two years in our work in in, the pay-go space. And. As. Drew. Mentioned, I'm. Leading. Be a phase work in energy we are a global, consulting, firm focused, on Financial Inclusion we've. Been actively, working in, off-grid solar for about. Two years mainly. Through the fiber. Program. Which is Financial Inclusion on, business. Runways, which is a BFA. Managed. Project, that's funded by the, MasterCard, foundation. And. We. Focus on using, smart phones and data to accelerate, Financial, Inclusion and we've, been focused on two sectors. Pay-as-you-go. And small, merchants, and so. What. We get to do is bring our. Diverse. Team and solutions. To projects. That we run directly. With Pago operators, and. Financial. Institutions. And. This. Is, how. We operate, in the pay-go sector, so we we. Typically, work in six to eight-month. Fiber. Projects. Where. We work with an operator or a financial, institution, on. The right side of this slide you'll, see we've we've, done longer engagements, with with. Pegg and Ghana with Zola in Tanzania, with. Bright life and finca, in Uganda. And then. We've had four. Smaller, what we call nano projects. Which are about one or two months with, on Gaza bio light Sun. Culture and lendable, and so. You can see that a lot of these are, our second-generation. Pago, companies in, one, way, shape or, form and. On the left side of this slide is kind of a description. Of what. We've been doing as BFA. We've. We've, focused kind of across, three areas. Digitizing. Field, operations, and using, data for smarter agent network management. We've. Really. Worked across the. Spectrum of data, in hey, go credit operations, from. Point. Of sale customer, selection. To analytics. And, including. Building, models to predict churn and then. We've. We've. Been building more recently. Relationships. With, financial institutions that. Leverage. The pay-go asset, and repayment, behavior, as the, on-ramp, for an in consumer, to. Be brought into a, formal, financial institution. So. I'm, going to give a quick intro to unbundling.

And Then jump immediately, into what it means for our space so a quick, definition, in. Pretty, simple terms, what. I'm going to be talking about is technology unbundling. And, unbundling. Is the, disaggregation. Which. You can think of as the breaking, up of a. Product, or a service into standalone offerings, and, it's. Typically at, a time or in, a place where it was not previously available to, do that separately. And so. In Pago we're really. At I, think, an interesting point in unbundling. Key pieces of the technology, that makes Pago possible. That, is, allowing. A lot of different companies to specialize, and allowing, companies, to decouple, pieces. Of their business models which I'll get, into, exactly how that's happening, in the, next few slides but wanted to start with kind of this definition. And. So. This, is kind a condensed. Version. Of what's a pretty complicated Pago value chain in many ways I think you can you, can think of each of these categories as separate, business lines, but. Along, the value chain in, in. White you. Know you'll see some. Of the activities, that a, company. Needs to do under each component, right design, and manufacture, products you've, got to acquire customers, deliver. Products to them you, have all of the activities, under a consumer, financing, business and of course everything around consumer, customer. Support, and. Then. In the, gray at the bottom. You'll. See the. Supporting. Digital tools for each of those to, make Pago possible, so you'll need remote. Lockout hardware, for. The solar hardware to be turned on and off you. Need corresponding, software. Required. To do that you'll. Need tools to manage inventory and, to, register customers. Out in the field and, etc. Etc. And. As, Drew mentioned in the beginning you know just four or five years ago you. Probably only had a handful of companies that. Had. This. Entire value chain owned, and had, built their, own, technology. Solutions. For all of these digital tool requirements. And so, before, signing. Up you, know your first customer, if you wanted to start a business doing. Pago four or five years ago you really, had to invest a lot of equity designing. All of this from scratch. And. And. So, this is an example of what you. Might. Have seen in, a vertically integrated Pago company so, in the kind of the. Green bar across the kind of middle there is it. May be hard to read in the slide but that's really where they focus, as a company, is completely, across, that value chain own Hardware, own distribution. Own consumer, financing, and they own customer, support and where. They partner on the digital tool side is maybe, only with mobile money providers. And. Maybe. An SMS, provider and so. To, make Pago possible, for their customers, they had to build an own tech IP, in. For all of these functions, and. Those. Digital tools are fully designed to their own needs, which. Can be very, helpful but. It requires a, huge, amount of equity and, you. Have to own the whole value chain right and. So. That comes to this. Concept, of, technology. Unbundling, so what, exactly is it I, like. To think of it as you. Know that the three boxes at the top of this, slide, are. Really, what's unbundling. The rest of the. Technology, and making. It possible to decouple, pieces, of your business model and, those three are really what's been, the, core of how. You deliver, Pago functionality. To a piece of hardware, so, you know. Machine. To machine technologies. Have, been really. Scaling, globally, and so that's made it a lot cheaper to, create remote. Lockout hardware and to. Leverage that and apply, that to solar, Hardware that, companies, have been manufacturing. And distributing at scale for quite some time now and so. What. Groups, like on Gaza and Luo meter and Paigey and others were. Able to do is link up with forward-thinking. Hardware. Manufacturers. To integrate. Different. Remote lockout, hardware.

Into, Their devices so. Now you as a hardware manufacturer, would, have the. Ability to make your product, Pago ready or not and not, have to create that tech yourself, and then. Those companies then created. Corresponding. Software platforms, that could plug in to a, wide, range of solar hardware, and different remote lockout technologies. To. Manage accounts, to manage the token. Generation. Manage. Repayment, and. A lot of other things that they built around that but with, with. Those three. Bundled. You've. Been able to see an acceleration, of now other digital, tools that. Are possible, to unbundle. To. Support the rest of the pay-go business, so you. You, know you could potentially, go, out and use, off-the-shelf, tools. For, building. Your own smartphone, app you. Can look. At off the shelf tools, for inventory, management, and. So there's been this real. Acceleration. In the last few years towards, modular, software applications, and now you can start to take advantage of that. And. So. This, is an, example, I think of what you might see in a, second-generation, Pago, player or what we've sometimes sometimes. Referred, to as haigo 2.0. So, the, yellow bar towards. The middle of this slide is meant. To sort, of show where, this company would, focus like this particular, company, might decide they only want to do sales and distribution. Customer. Finance and customer, support they're. Just going to buy hardware, from partners, in. Other cases you might see a. Graph like this where the, the, second generation Pago company is just doing sales and distribution and, customer support, and they've actually partnered. With an MFI, or a. Rural, bank to, do the consumer, finance and so, again, those, core. Pieces of the pay-go tech unbundling. Are making, it possible to start to decouple. Pieces. Of the business and then. This. Particular example, this, company would start from scratch. With. Building, an ecosystem of, different. Partners which are represented, by these logos. You, know from the, left is kind of maybe, their hardware partners. They, might use on Gaza for their Pago functionality. And a different tool for some, of their inventory. They. May. Have on Gaza integrated. With mobile money and then they may be using. Zoho. Or one, of these other tools for communicating, with their customers, and. So the, pay-go 2.0, operator, is able to launch very quickly because, they don't need to build any of that from scratch. And. They. Don't need to maintain those technologies. As. A service. And. They're. Able to launch. Extremely, quickly and for the most part, of quite, low software. Service. Costs. And. But, I guess the point here is that we're we're, still relatively early in, unbundling. And so, if you look back at the, different. Partners that that, Pago, 2.0, player is having, to work with each. Of these logos might. Be a potential. Third-party application, and you. May have to manage. Six or seven partnerships. Each, of those, partners. Has a digital tool that's storing. Data somewhere. It. Often. Needs to flow between different, tools and you, need to figure out how to manage the, integrations, and then. Work. Hard to make sure the, KPIs, and dashboards, are are. Matched, with what your business actually needs and so. You, know all of that is to say that that we are still early there, is still still, some level, of complexity. That can come, with, being unbundled. And. A. Couple, of the takeaways, from. Our experience. Working with you. Know sort of Pago 2.0, companies, that I thought I'd bring up here. I. Think. The first is that there's there's going to be constraints, that are unique to each market. Like. The availability, of local IT vendors, for example that you, should keep in mind when you're when, you're designing that ecosystem, of tools to support your business, you, know you you, want to find those that that best match your unique, situation and, related.

To That I would, say that connectivity, in, the field with. Your workforce and with your customers, is an issue that we've seen in almost every market and so it can present some really big challenges, so. Just. Keep that in mind and try to really design for offline. Operations. First if possible. I. Think it's important to keep in mind that not. Everything, is plug-and-play just, yet, and. It's somewhat. Difficult if you need to switch so I guess, an hypothetical, example. Would be if I wanted to sell for. Different Pago ready. Products and use. Multiple, Pako platforms, there's, no easy way to link those together right, now so I would need to manage, multiple systems. And. And. Sometimes the data would be in different structures, and, I, guess the last point I would make is that you know new, operators. You. Know you don't need your own tech, IP you, don't need a team, of engineers to build that but, you do still need teams, to manage software, and manage data and make, sure that your digital tools are all collected you know connected, and working well and that, you're gathering robust, data, and. I think new. New Pago companies of. Recommendation. I would have is that you know don't don't hesitate, to reach out and get support from, your tech partners, and from, some of the emerging, kind of service providers and I've. Actually been really pleasantly, surprised by how willing second-generation. Players, are, to. Share, and. Kind of help each other in the spirit of growing the market so so I would also make that as. A suggestion, and. And. What I'm trying to communicate here, is that a, big. Benefit, of, unbundling. Is its enabling, specialization. This. Graphic is I think a little bit simplified. But. You. Can have companies that focus just on peg already hardware some, you, know that focus. On just, distribution and consumer, financing. You. Know there are solutions, that, support different pieces of the pay-go value chain like credit scoring you have service, providers, like open, capital and catalysts, as an IT solution provider, so. There's a lot of different types of businesses, now, that. Can specialize on pieces, of the, value chain and that's really been, enabled. By technology. Unbundling. And. And. Finally I think with this slide I, I wanted, to kind of talk brings, back to the topic, here which is really what what are the impacts of this on market. Expansion, I think, the first, most obvious one is that there are now dozens of, Pago ready products, available in. Not, just off-grid solar but now a growing, number hey go ready products, in. Water. And, cooking. And. And the second big benefit, is I think to the space is that we've really reduced the amount. Of funding that that, that funders. That investors. Need to put into financing. What is effectively the same tech. And. And. So I mentioned before this this specialization, it's, really, allowing companies to laser focus, on a few things and, it's even giving. Vertically, integrated, players the opportunity to pause. And, think about if they should unbundled, pieces, I, was. Just doing, some research before, this and and read, that even you know in Copa which is one of the early vertically, integrated, players, has. Worked. With Microsoft on, there with their Kassala app, so. A smartphone, app to support, management of their workforce something, that they were doing in-house and so it's, just showing you that that, this is kind of accelerating. And even vertically integrated, players are looking at areas where they can. Unbundle. I. Think. The work that the, the, pay-go platforms. Like like Paigey and on Gaza and solarz etc, have done within. Digital payment in degree integrations. Has, had a huge impact on. Market. Expansion because, that's. A very expensive and time-consuming process, and, doing that on behalf of a lot of different operators, really. Helps, and. I, think, you. Know I. Think.

There's. There's. A big. Diversity of types of businesses, that are able to now launch Pago offerings, and. And, you, know we're. Seeing Pago being, launched, in dozens of markets outside of East Africa, as drew, mentioned and I think that's that's, something that would have been really hard if, if. This was really just being led by vertically, integrated, players because, it would be tough for them to justify the investment to go to all 40 of the markets, where we're, we're Pago is now. So. I've gone over a couple minutes I apologize, for that but if. You're working on any of these they're in any of these areas that we would be very interested to, learn more and. I would just invite. You to reach out we'll, provide the slides after, this and. You can contact me directly. And, and. We've we've got a blog in some. Videos and some great content, so. Thank. You very much. Thanks. Jacob, that's a great. Overview, really. Fascinating, to see there the. Complex, value chain and the digital, tools that are, underpinning. The, specialization. And. I'm. Sure that many. People have got got, some questions but. Ask. You to to, park them and we'll them we'll proceed to the panel, discussion so. Now, it's my pleasure to introduce our, other two panelists, Hugh. A learner's group CEO of peg Africa he's been recognized, as a top 30 under 30 Australian. Entrepreneur a, young, global leader by the World Economic Forum, I was recently named an aspen, global, leadership fellow human. Can ask you to introduce, peg africa in 60 seconds. And, you will, need to Anu yourself, first. There. You go there. We go hey. Everyone. Hugh, here, I am, the CEO of peg we're here at West Africa focused, pay-as-you-go. Solar company, we operate in three, markets, in West Africa, Ghana Ivory Coast and snaggle about. 400, staff. Across those markets. And, we focus, on we're. A generation. To pay co company so we focus on consumer. Financing. Distribution. And. Kind of outsourced hardware software. Cool. Thanks here good to have you on the webinar today. Lesley. Moncada is the CEO and co-founder of an Gaza a product. Designer and mechanical, engineer from Stanford, University who's. Also worked as a design, engineer on, the Amazon Kindle team. Lesley. Is a two-time, tech awards laureates was, named the Forbes 30 under 30 in Chopin that is. An echoing green fellow and a 2018, scholar worthy, Lesley. Great you. Can join us today can you introduce. On, Gaza quickly. Sure. Absolutely, good morning or evening wherever you are in the world, so. A Gaza is a technology company serving, last-mile distribution, businesses and emerging markets and Jacobs. Set this up very nicely we focus on the technology piece, of the value chain so. Arpeggio, technology, platform makes life-changing, products, from, solar lighting systems, to, solar water pumps, affordable. To rural off-grid, homes around, the globe, we're. A b2b horizontally. Integrated company, so this means that we focus on scaling, through the information of two types of partnerships. Directly. With product manufacturers, that build the hardware and product, distributors, that sell that hardware to end consumers. We. Were founded in 2012, we, have over, 50 employees across, our San Francisco and their OB offices, a large, majority of those employees are product. And engineering employees. Because we're a technology business, we. Currently work with over 150. Distributors. Across 30 countries around, the globe so. Really, have been a part of seeing pay-as-you-go, spread, worldwide and, I'm, really proud to say that our partners, have sold over 1 million page, you go solar products, on our technology platform, to date. Cool. Fantastic. Thanks listening yeah. Especially for joining from California, where it's still early in the morning. So, the first set of questions I'd like to talk, about is a look, at the. The. New and evolving business models, and, how. Technology, and. Bundling is is playing out now, Leslie, you saw this opportunity. Ahead, of time you said you were formed in in 2012. So. You saw this at an early stage and what, what, made you confident, that this, was. Yes, sure um you, know and we were just starting out, pay-as-you-go. Was, definitely, not a household term. But. What we saw was that there was already, specialization. In the industry there were manufacturers.

That Were producing, these solar devices and there. Were distributors. That were specializing, in distribution and to sell those devices to end-users and, these, were often separate, organizations. Who, were actually, partnering together to deliver energy access, solutions, to consumers so they weren't necessarily, pay-as-you-go. Company, is they might they were probably selling, those devices for upfront cash to end users but. When you looked at the whole market there was actually a you know a large swath, of the market that was already specializing. In a particular, piece of the value chain, so. We saw that and we also saw just, a pervasive problem facing the whole industry and that was the lack of consumer financing, options for quality, solar products. And. We. Founded our Gaza based on two, principles one. We. Wanted to solve that, problem of the lack of consumer financing. And. Essentially. Focus on building. A solution, for in user financing, which we saw is one of the biggest energy access challenges, and we, decided to do that with a b2b, or business to business model. Because we. Wanted to take advantage of the, specialization, that already existed, in the market and we, thought that by. Focusing on the technology we could most. Effectively, you, know develop, and deliver a solution, to. That problem. Scale, and. We. Started bringing together partners both on the manufacturing, side and, the distribution side pretty, early on and you. Know a lot of the early distributors, that we worked with, introduced. To Paige you go model to their operations, so, whereas they were selling upfront cash products, they saw the ability for pay as you go to increase, the, number of consumers, that they could sell to and thus they added pay as you go. Let. Me ask about the your offering to two, distributors, so you offer the, software platform the cloud services, you, also provide guidance on, the. Business model and such as you know pricing, and some of the consumer. Insights that you've learned with working, through the you, know such a wide range of distributors. Yeah. Absolutely. We certainly help distributors, especially, ones that are new to pay-as-you-go, think, through all the you know moving parts of setting up a pay-as-you-go business, including, pricing, of the products that. Being said we are careful, to recognize. That we, work across 30, countries now. And pricing. A solar home system in one market may be very different from pricing, that same piece. Of hardware in an entirely different market. So. We make sure that we're careful to provide you, know recommendations. Based on industry best practices, that we've seen but, at the end of the day it's always the distributors, decision, how they price their products, how they run their operations what, kind of follow-up they have with our client base etc, right. Right and, how do you find. Your. Distributor. Client select which which hard hardware to go for what, choices do they have. Yeah. So right now we partner, with over 15, manufacturers. So we, have a very wide range of page you go product offerings, basically. From smaller, portable, solar lighting systems, through, and I. Think our sweet spot the most popular type of product are the 6 to 12 watt solar home systems, and. Then we support, solar. Home systems that up to hundreds, of watts that can power in, household appliances, we. Also have a number of, distributors. That started out selling pay-as-you-go. Solar home systems and have, now increased. Just the variety of products, that they sell to their client base so they might have introduced, smartphones, or cookstoves, as well and. Sold those on a pay-as-you-go basis. So this is this is sort of an exciting, trend. That we're seeing in the industry is, solar. Distributors. Thinking outside of just the solar lighting space to provide other life-changing, products to their clients. Yeah. Nice nice and so, I'm it's. Common for a, distributor to offer. Hardware, from a number of different manufacturers, to see, what fits their their market and their customer, base and they they have the ability to pick.

And Choose from from, the range of. Manufacturing. Partners that on Gaza house. Cool. Skew. And tell me about the the PEC, business. Model now how has. Have. UN been, influenced, by the this technology, and bundling and you. Know how. Did you go about them you, know designing your your business model and your partnerships. Yeah, so I I started in 2009. With, a crowdfunding. Site focused. On energy lending, I would. Be worked in eastern West Africa, financing. In. Solar home systems solar lanterns, and cook stoves and. Around. That time the Barefoot Firefly. For those of you who've been around long enough was, the hot sexy, product on the market. And. The. Crowdfunding site. You. Know had lenders from 35 countries and. Got. A lot of media attention but, couldn't, pay my, salary. No one wanted to fund me so. I. Ended, up setting. Up an. Asset financing, distribution, business it was an, early. Version of a, pay-as-you-go. Company. In Ghana but focused, on NFI, partners, because pays go didn't exist at that point and. Between 2009, and 2011, the, market had been moved from solar, lanterns, to plug-and-play saw alarm systems they were kind of dumb solar home systems. Being. Sold mostly for cash or through EMF is on financing. But, I saw, the hardware, market. Evolving, quickly and. Then in 2013. When I started pegged with my, co-founder naked. Hellar, it, was the beginnings. Of a. Zero solar so again in two years we've moved from kind of domicile at a smart solar and. I. Just, I I. Wanted, to I didn't want to get involved in hardware because, I saw that the evolution, was happening so quickly it would involve a lot of resources. And. Around. That time there were some companies. Starting, to set up which, were looking. Sophisticated. Like in Coppa. Which. Had you, know a vertical. Offering. And we wanted to stand on the shoulder of giants rather, than reinvent, what they'd already done. And, so in. 2014. We, partnered, with m-kopa. And. In 2014, we've kind of made the decision that we would license, hardware in software because, others were doing it better than we ever would and. That was a risky, bet, we definitely had some sleepless, nights, because, we were making this. This. This, bet that the market would be there that somebody, would license, to us and, that the market would evolve that had been lots of offerings we, thought it would go that way but it was a big risk when we did it, and, you know we're very pleased to see that the markets, kind of moved in that direction and there are multiple hardware. And multiple software providers. Who are offering sophisticated. Solutions. To companies, like Peck so what. We focus, on is the, is, profitably, servicing, the customer basically everything, in country, so. We want to control the customer experience, we. Do consumer, financing, and we're, focused on West Africa, as a region, because we want to be the experts, in, building, consumer. Financing business in that area and we think that it's different enough and hard enough that if. We focus on it will be will be the best at it. And. One. One final, point mentioned. Having seen what's happened from 29, to 2009. Till now, it. Is very clear the market has moved to this kind of unbundling, phase, and, the. The market power, shifting, a little bit so, when. We started. Being. A licensed, or of software. And hardware, literally. There was one company who would license to us and and. They had we were lucky enough that they were in copan you know they were. The. The company. At that time and. We, learned a hell of a lot from them but, you, know if, they had decided to drop licensing, we were done there. Was there, was no other kind of solution out there that we felt could have built the business the, way that we wanted to build it and. That's not the case these days companies, like us have options, and and. That is a great thing to see you gives us a lot it gives us a safety net. Yeah. Fantastic and, in. Fact you've moved on from m-kopa known you have a new technology. Partner is that right. Yes. We're panda with delight. Is. That is, that another your, one and only. Tech. Partner. Yes. These. Types of business, model, you know our. Choice of business model which is focusing, on consumer. Financing, and distribution. Well. You. Have to invest deeply in relationships. It's. Very hard to have many, relationships. With many suppliers. It. Just sucks up too much of your time and it becomes too complex, so you, need to invest heavily in personal.

Relationships With the, people on the other end who are you know your partners and that, means that you want beef long-term, relationships, not kind of short-term fleeting. Ones that mean that you might get, some short-term advantage but, you lose the kind of long-term. Strategic. Edge, that you might gain from those deep those deep relationships. Cool. Interesting. Thank You. Jacob. We've. Talked about the the. Technology and the business can you talk, to the consumers. Experience, of this from the, vertically integrated, to the the panco 2.0, company you know is. A customer, aware of their you, know the the different models. The better, worse. Experience. How's, it playing out for them. Yeah. That's a, great, question I. I think, they're certainly in in a number of the markets, in East Africa, and awareness, of. Just. Next generation, offerings. Just by, virtue of the, number, of products that are on the market in terms, of the customer experience I, think, it's actually hard to say definitively like. I I think, certainly. What's better in general is that in. Customers, have more options in more geographies. And, if. You're a, second-generation. Pago, operator. You. Know you should, be in a position to be able to respond to the needs of your, unique customers, because. You can pick and choose hardware, that fits your. Own market. And, I would expect as this is. You. Know as more and more companies or deploying Pago, we're. Going to see competition heat, up on the. Terms of the customer. Financing, offering, so not just on the hardware, but on the financial. Product, which. I expect, will be good. For, customers, I think, may be a question mark in my head is just. Whether. There will be clarity, around brand. Identity, with hardware, and. Maybe, the pay-go model itself so you know you could have I guess multiple. Pago companies selling, the. Same yellow hey. Go ready solar kit, and. If. One of them isn't executing, very well in.

That Market is it Pago that gets a bad name is that particular, yellow product. That. That has. A reputational. Hit and. So, i think maybe it's a bit of a mix at the moment. In. Terms, of customer experience. Cool. Another. A. Poll. Question for our audience I've, just open this. The. Question is which. Feature of technology and bundling will be the most important, driver of, pegye market expansion, so. It's I invite, the audience to. Put. Down, fill. That out you, have the option of new types of business models new, types of companies taking on distribution, increase. Profitability, of companies in, the paper value chain increase. Tech innovation. From specialized, tech, firms or something. Completely different. And. I'll. Give you another 20. Seconds to to, fill out that at the moment we have increased profitability, of, companies. Leading. The way. Still. Some more answers coming in. With. Their tech innovation, is catching. Up. But. It seems like these two were the leaders Jacob, do um do, you agree with our esteemed, audience. Jacob. Byrne you. Can you see the results as well as. I. Was on me yes yeah, I see the results as well yeah increase, profitability and, increased, tech innovation, from specialist I I, do agree actually because I think I. Think, the second point is, in. My presentation, when I was trying to describe as really. A driver, of business model innovation right. So. If we if, we continue, to see innovation in companies, that are specializing, in different pieces of the technology, value chain I, think, it makes it a lot easier and more comfortable for. Companies to partner. On pieces, of their business model and I you know we can come back to Hugh's, description, of the early days when, when they started doing this really only having one option, available, if. We can start seeing that increase in. Innovation, and number of providers doing that then, I can see that you. Know really, improving. The ability to unbundle different, pieces for sure. Dude. Do, you agree Leslie what's, your perspective. Sorry. I can't actually see the final result sit still so that's in progress, already. Okay let. Me close. Oops. Sorry I'm, just playing with them. Okay. You. Should. Now be able to share the results sir I thought they were visible for everyone, can. You now see them. Yeah. That's great things. Yes. Sir, ability. Wins, out over the. Tech, innovation, from specialized tech. Firms. Yeah. I definitely. Agree with those leading top two and just as Jacob said and I think as we, start to see more successful, companies in the industry then, an, increasing. Number of companies will follow that for sure and. Of course I'm I'm biased because I run, a tech, company but, I think. Increased tech innovation, on the smart hardware, side of things on, the ability especially to. Collect. Usage and monitor usage. And monitoring data back from the products, opens. Up a whole range, of opportunities especially, when you get into thinking. About predictive, data analytics, and how, they can help distributors, make smarter decisions about. Their operational, choices. You're. Interesting, and, he was a Pingo. 2.0, company. Can. You speak to this point on profitability mean, what's. The. Hypothesis, is that it's as. Jacob said you know you don't have the same equity. Requirements. On a lot of the, tech. R&D, and you know you have a shorter, runway to to, profitability but. On the other hand perhaps it's more difficult to raise, capital without. Sexy. Tech innovation, to sell to investors. What's. Been what's. Been Peg's experience. On this. Yeah. Our experience, might be a little bit different from others just because we were so early, on that. When. We were trying to raise money and it was in West Africa, too which was a region that wasn't, attracting. Financing. In, those early days for this business model. It. Was really hard it was really hard and we actually had to attract, investors. Who. Didn't. Invest in you, know won't energy investors and, we kind of ended up getting. Investment from some unusual, investors who've been great for us. But. I do think profitability, is, the number one thing that this industry, as a whole needs to show and, profitability.

Is The thing that will end up. Driving. Investor. Interest, and eventually driving, some. Exits. And I. Think be, a. Big. Juicy, exit, is is, the. Best thing that could happen to this industry. Because. It, will it, will generate, a lot of attention and it. Will be the thing that drives even, more investor, interest even, more promising. Entrepreneurs, coming into the space etc. Because, while, we all. Think that this industry is. Is. Doing great and and, we, think it's it's, well known the, fact is a lot of people still don't know about it so, yeah. We've got to get profitable, and there's got to be a couple of exits, and then I think we'll see some some. Real some. Real game changers. Yeah. Yeah. I. Wonder. If PEG Africa, will be one, of the leaders in that respect, as well. Sometimes. I dream about it yeah. One. Of one of the other options Lesley was that. New. Types of. Company. Were able to do you. Know to do distribution, or play in the the pay-go value. Chain and you. Know clearly young gas has got a unique perspective on this with a you know 150, distribution. Partners. Made. Have. You seen there the profile of distributors, change, over the course of the years are you now seeing more local entrepreneurs, and national companies you. Know they'd be interested in successful, in this. Yeah. You know if I had, to vote for one of these that might have been the one and I, think we've seen a lot, of innovation, variety in terms of the type of the dubuque companies that are playing. In the page you go solar market, so. Certainly we see a wide, range of sizes and. A. Mixture. Of you, know local sorta. More grassroots distributors. And. Then distributors, who are typically. Run by expats, they might have their headquarters in, the US or Europe but, they have established, local operations, across various regions or various countries and emerging markets. I'll sort. Of profile two types of companies that were particularly excited about that are sort of new entrants to the page you go solar market. Whereas. Before, the quote typical, distributor, was really a distributor, that from. Its, beginning. Was, focused on the distribution of solar home. Systems to consumers. Now. We're seeing for. Example microfinance. Institutions. Who. You, know these are organizations that are used to administer in cash loans to consumers. But. They are, now sort of adding a layer of hardware, distribution, on top of their existing, agent Network and such. That they can offer, these these Hardware solutions to that same group of consumers, and interestingly. Enough a lot of these microfinance, institutions, are targeting, a different sort. Of tier, of buying power of consumers pay-as-you-go. Solar they. Might offer a pay-as-you-go solar system, to a consumer, that might. Not have qualified, for their cash loan but they can learn a lot about that, consumers. You know buying power and risk level and hopefully, ideally, eventually get them to be. Eligible for their cash loan program, so. Microfinance, institutions, are really exciting just because they have a large network of rural. Distribution already. Um one. Other one I want to profile our telecoms, and telecoms.

Have, Very. Very wide networks and emerging markets of. Agents. Typically. Agents. Who are involved in the distribution of airtime or mobile, money agents, and a. Number of telecoms, are starting to realize the opportunity, of actually selling, hardware, selling, pay-as-you-go Hardware through these same distribution, networks I would. Say it's you know sort of slow moving to get off the ground because a lot of these tele telecoms, are giant, companies that. Do you move pretty slowly but the fact that a number of them are starting to recognize the opportunity, to, sell additional you know services, to their client base and really. Reinforce, their own brand we. Think is really exciting because it couldn't really open up the scale this market. Yeah. For. Sure I mean the market, is you. Know it's so huge it's, there's. The. New. Businesses, new. Entrants you, know must must, be. Looking. At this and, you. Know enticed. By some, of the opportunities, that it brings, now. I'd, like to invite, the audience to to. Ask some questions please, type it in the in the question box whilst. You us you think and type I'd like to ask. Jacob, to. Look into the future, and, see. How you see unbundling. There's, some bundling trends playing out in, the next few years I mean Leslie's just talked about they're the new profiles, and the of, entrants coming into the market is it, is. There. There are the features you see beyond, this and. What, do you expect is there a Pago 3.0 on the horizon. Yeah. That's a great question I think I. Think. That Pago 3.0. Label I think there's there's certainly, potential. For operators, to start to decouple their, consumer, finance business and there's some great work that that, the. Dan Waldron, and, Alex. So. - were you but, at, C gap have written on this actually, as kind of a potential, Pago 3.0, where the consumer, finance business is unbundled, I think, that's one possibility. I do. See, more vertically integrated, players on bundling pieces, so, that. Could either be driven. By an opportunity, with. A technology. Provider but, it also could be to. More. Easily enter, a new. Mark new, market sorry and. And, maybe give up a piece that that that, a local, partner might be able to do better than you. And I, actually expect, to see, maybe one or two more vertically, integrated, players, experiment. With spinning off their Pago platforms, it would it would actually surprise me if we wouldn't see that and. And. I guess the other piece would be you. Know this is already happening on, Gaza and others are doing it but pego tech really. Being applied to products in, other sectors so. Starting, with things that are maybe, adjacent. Like micro grids cooking, water, which. I think will also, continue. To expand the pool of companies, using, those, core tools but. Then all of the companies that are specializing. In. Supporting. Pago at different pieces of the value chain can, then start to look at those adjacent, sectors in the future as. They start to use Pago as a, main way of making their product and service. Affordable. And accessible. Thanks. Talking about them you. Know those supporting, services, we have a question here from Andrew Aldridge is access. To local currency financing. Key to the growth of Pago businesses, in Africa to, leverage the consumer, finance opportunity. And, what are the barriers here Hugh, I think you've got an interesting, perspective on that. Yeah. I think, that local currency financing, is important. For risk mitigation I. Think the the industry grew, basically. Without it for the first three four years, and. You, know probably likely avoided, some, major catastrophe. I do, think, it's really important, local, currency, financing, is more. Expensive. You. Know the interest rate is more expensive you'll you'll load more expense, on your P&L, you'll obviously avoid, the risk of of a, significant, depreciation, I think, the industry can grow without it but not sustainably.

So I think it is very important, and I also think that local banks and, regional, banks and even some international banks are starting to get very interested, so I'd. Be surprised if we didn't see a number of you, know deals involving, banks over the next 12 months even. Is. That going to come out of the East African. Good switch imam more established, I. Know. I think it's I think it's you. Know all over Africa, I think the banks are figuring, out this is an opportunity and they're, trying to understand how to get into it. Interesting. That's, another, question I'm related. To finance, in sales and to, what extent, will better ways of assessing, customer. Credit, and credit. Scoring matter to scaling the sector, an opening, opening. This up to more investors, or is, this just a big rabbit hole I was, asked by Andrea, Griffin Leslie. Would you like to fill that question. Sure. Yeah. We we, believe very strongly, that the. Sort of next level of maturity of a lot of these pay-go operators, will, come from really being able to understand, the, client risk levels, and. Taking. Action on that so I guess I want to first clarify, you. Know when we think about client, credit scoring this, doesn't mean should, you sell to a client, or should you not it, could mean should, you sell a 3 watt product, to that clients or a 20 watt product, to that client so it's really sizing, the offering, to, that particular client and then really. Helping drive a lot of operational, decisions that happen post, sale so, you, know if a, client looks, like they're falling off a, the. Expected. Payment trajectory what, sort of actions should a distributor, take to follow up with that client and make sure they know how to use the technology and make payments for example so. You. Know I think the question was is it a rabbit hole definitely. I think. We need to be careful that it probably. Is not the, same. Data. Model, that should be used in every single case across every single market, or products, or client base, but, I think there's a. Ton. Of information that, payment. Client, and product data can bring to, just you. Know really help make these distribution companies, profitable. Because they're selling to the right they're selling the right product the right set of clients. Cool. Thank you and. So, it's just a matter of assessing, the the right product for the right client, and understand, what is what. Is what is the ability to pay in finding, their finding the right match. And. We, do have a couple more questions but suddenly were out of time so, I will. Try. And ensure. That they're they're, answered offline and. I'll. Ask our panelists to help. Me there and send the, Oscars. The. Answers. But. Yeah let me just wrap, up now with a couple of finishing slides. This. Is a pitch for a Googler, study, on taxonomy. For off-grid, energy companies, and. This. This is this is a study birds. The. Brakes. On the. Pole. I think okay. Sorry. Figure. Out how to. Yeah. Yeah. Thanks. Jake yeah, so then this study is it. Breaks down the the different.

Elements. Of a business model and lists, a range of options for each of the the, street, each strategic. Questions, that Pago business, and may. May, ask itself. So. For example here we're looking at the consumer, financing, type and they're the different options. That are there and, it's a very you, know structured, way to to. Approaching, designing, your own Pago so, if I was looking to designer they. Go business model and, say this would be my starting, point if. You're interested, to find it on their Googler website. As. I mentioned at the start this webinar this is the first in. A series of. Technology. And business, innovation. Webinars. And blogs and events that gobbler, is running we're. Looking for. We're. Looking for what ideas you know where we're interested, here you. Know your innovations. And your experiences, and structure, future. Websites around that, you. Know that we're thinking to do it around machine. Learning data analytics. Blockchain. Etc, etc if, you have any any. Ideas and cool experiences, that you want to share please get. In touch, and. Finally. If. You want to see. This, recording. You know pass it to your colleagues, or anyone else you may be interested. You can find it on the, Google web sites and YouTube. Get. Information about upcoming, webinars, on. The Googler site or sign up for our newsletters. And. Also. I would encourage. People. To fill, in the. Evaluation. For the webinar we'll send ride the link to a survey monkey. Just. After afterward, close the webinar and if people, could fill, out the for questions and that's gonna help us, improve. Our, design. Delivery, of future. Events. But. With that we've hit the hour I'd like to say thank you very much to. Jacob. Lesley, Ann Hughes, airing. Their insights with us today and, thank. You to all of the attendees for joining as well. Thanks. Drew oh thanks. Everybody thanks everyone. Cool. Thanks Leslie thanks you thank. You. Bye. Great. Have a good day good bye Ron I heard.

2018-12-21 11:23

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