New gBETA Madison Class Includes Solar Electricity Startup NovoMoto

[Updated 8/14/17 11:39 p.m. See below.] Despite having a population of 77 million-plus, the Democratic Republic of the Congo only has access to only 1.3 gigawatts of electricity, says Aaron Olson, a graduate research fellow at the University of Wisconsin Fusion Technology Institute. To understand how miniscule that figure is, Olson says, consider that Madison, WI, and the surrounding area—home to about 600,000 people—are powered by 1.5 gigawatts of electricity.

“The average Congolese household spends $22 a month on kerosene lamps inside their home and charging their cell phones,” Olson says, adding that this sum represents about one-quarter of a typical D.R.C. resident’s monthly income.

Olson is the co-founder of NovoMoto, a Madison-based startup that sells packages of solar panels, lamps, batteries, and other equipment to Congolese villages. The company uses a pay-as-you-go model, so that customers receive the equipment upfront and make relatively small weekly payments over a five-year period, says Mehrdad Arjmand, NovoMoto’s other co-founder. After five years, clients own the equipment, he says.

Launched in 2016, NovoMoto has already gained a fair amount of traction: the startup says it currently has a group of beta customers across three D.R.C. villages and expects to serve about 150 clients by the end of 2017. Arjmand says that to date, his company has received more than $147,000 in awards, grant funding, and outside investment. [Updated with information on NovoMoto’s current-year growth projections.]

Still, NovoMoto’s ambitions are lofty, and the startup will of course need to bring in and spend more money if it is to continue growing.

Given NovoMoto’s growth projections, the company earlier this year applied for and received an invitation to participate in gBETA, a free accelerator that helps entrepreneurs with things like pitching their products, adding users and customers, and raising money from investors.

The gBETA accelerator is managed by Gener8tor, a Wisconsin-based organization that holds training programs for early-stage companies, and invests in them. Since 2015, Gener8tor has held a total of 11 gBETA programs in Wisconsin and Minnesota, says Maggie Brickerman, managing director of gBETA. Two of them have been taking place this summer—one in Madison, and one in Milwaukee.

The two programs kicked off in late June, and will officially wrap up later this week. Previous gBETA programs have lasted six weeks, but Gener8tor decided to have this summer’s cohorts run slightly longer, says Nhi Le, director of gBETA Madison

With Gener8tor’s core program, the accelerator and its investment partners put up to $140,000 (in cash and convertible debt) into each of the five participating startups, in exchange for a 6 to 7 percent equity stake in them. Meanwhile, gBETA and gALPHA—Gener8tor’s newest program, a hackathon-accelerator hybrid launched earlier this year—are both equity-free, but provide participants with mentorship and other perks.

Arjmand says that NovoMoto has plans to raise a $500,000 funding round. That would allow the startup to grow its customer count to 2,000 in the D.R.C. by the end of 2018, he says. With future revenue and additional investment or grant funding factored in, NovoMoto projects it will serve 1 million customers by 2027, Arjmand says.

NovoMoto works with companies in Germany and Thailand that supply the solar panels, appliances, and other power equipment, Olson says. The startup also coordinates with organizations based in the D.R.C. that receive shipments and distribute items to NovoMoto’s clients.

One of the other companies that is competing with NovoMoto in the developing world is San Francisco-based d.light. Olson says d.light is currently expanding its operations in the D.R.C., but he believes NovoMoto’s pay-as-you-go fee structure will help differentiate the startup from its more entrenched competitor.

He adds that there’s been less of a push to expand access to electricity in the D.R.C. and some of the surrounding countries than there has been in other parts of the continent.

“In Sub-Saharan Africa in general, there have been a number of companies that have gained a lot of traction and have attracted a lot of investment,” Olson says. However, he adds that “most of that action has been in east Africa—Tanzania and Kenya, to be specific. In Congo, we are one of the first movers in this pay-as-you-go electricity space.”

Here are descriptions from Gener8tor of the other four participants in gBETA’s current Madison program:

Clock’d: software allowing bars, restaurants, and retailers to hire employees and communicate with job candidates.

—Geladen: charged ultrafiltration membranes that can be used to perform tasks like separating proteins from cow’s milk to make baby formula. Dairy processors currently use uncharged ultrafiltration membranes, which are slow and cannot separate different types of proteins, the company says. Geladen co-founder and UW-Madison food science professor Mark Etzel co-authored a 2009 paper in which he and other researchers found that adding a positive charge to ultrafiltration membranes made it possible to “permeate proteins having little or no charge … and retain proteins having a positive charge.”

—Pyran: renewable chemicals from wood and crop waste. One of the chemicals the startup is developing is a primary ingredient in nylon, spandex, and other common plastics, Pyran says. One of Pyran’s co-founders is George Huber, a professor of chemical and biological engineering at UW-Madison.

Stimmi: software allowing parents and caregivers to document and share information on non-verbal autistic people. The company says its digital tools allow users to create profiles for individuals with autism containing personal information and videos documenting how they communicate feelings and ideas.

Jeff Buchanan is the editor of Xconomy Seattle. Email: jbuchanan@xconomy.com Follow @_jeffbuchanan

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