[Nigeria] Rensource secures $20m in Series A financing to power SME productivity
Rensource, a company that provides energy and tech-enabled value services has announced the completion of a $20 million equity financing round. The round was co-led by existing investors CRE Venture Capital and theOmidyar Network, with participation fromInspired Evolution,Proparco, EDPR, I&P, Sin Capital, and Yuzura Honda. The funds will be used to expand the company’s footprint of microutilities across Nigeria, as well as invest in additional technology infrastructure, as it rolls out new tech-enabled products and services for its merchants.
Nigeria, Africa’s most populous country, only has 12 gigawatts of installed grid capacity, with just one-in-four Nigerians connected to the national power grid. In contrast, South Africa has 50 gigawatts. Rensource launched commercially in 2016 to address this problem. Founded by Ademola Adesina and Jussi Savukoski, it is bridging Nigeria’s power deficit through the delivery of renewable based decentralized energy, focusing primarily on SMEs.
Operating in seven clusters across six states in Nigeria (Lagos, Kano, Ogun, Ondo, Oyo and Edo), the company builds and operates solar hybrid microutilities - a type of energy services provider that localizes energy generation, distribution, and customer service to each community it serves. The company is active in marketplaces that serve over thirty-thousand SMEs. It expects to expand into 100 markets in the country over the next three years.
With the financing secured, Rensource is now expanding its offering beyond energy and entering Nigeria’s nascent offline to online (O2O) space, by offering technology enabled value added services to SMEs in the marketplaces it provides power for. With the launch of this new B2B platform, “Spaces O2O”, merchants will be able to access services that accelerate their productivity growth.
Speaking on the news Ademola Adesina, Founder and CEO of Rensource said, “We believe that simultaneously greening and decentralizing its power infrastructure is the only way to navigate Nigeria out of its current state of energy poverty. Pursuing this with a focus on the millions of small-businesses that drive our economy creates a massive multiplier effect whose benefit accrues to all.
He goes on to add, “Our push into O2O is a natural step that leverages our existing infrastructure to further empower the merchants we serve. We aim to bring connect over one-million merchants in the next 5 years.
As Rensource has grown a leading foothold in the Nigerian market, it has identified gaps in the distribution value chain regarding lack of access to credit, expensive transportation and warehousing, inaccurate data and limited product availability, underpinned by a highly fragmented and multi-layered value chain.
Rensource has historically worked with a variety of stakeholders including community associations, government, regulatory agencies, contractors, and private investors, to build renewable energy projects across Nigeria. In 2018, the company, through a collaboration with the federal government’s Rural Electrification Agency, developed a project in Sabon Gari Market in Kano which resulted in thousands of merchants connecting to Nigeria’s first solar microutility. This first project was followed up by several other as part of the Energizing Economies Initiative (EEI).
Co-founder and Managing Partner of CRE Venture Capital, Pardon Makumbe said, “Rensource's goal is to offer solutions to the many challenges faced by SMEs in Nigeria, starting with power and expanding to other value-added services. It is a bold and worthwhile undertaking that is creating value for all stakeholders. We are excited to continue this journey with the hyper-competent team at the helm.”
Jonathan Kirschner of Omidyar Network said, “Ademola is a true renewable energy revolutionary. We are thrilled to be working with Rensource to deploy affordable and innovative energy solutions to traditional retailers across Nigeria who desperately need it.”