DABADDO - Energy, Technology and Connectivity
DABADDO - Energy, Technology and Connectivity
DABADDO is a step change, for-profit, shared value company bridging the digital and energy divide for limited/off-grid communities
DABADDO is a step change, for-profit, shared value company bridging the digital and energy divide for limited/off-grid communities Read more
Daba – now; Ddo - light
TURN ON THE LIGHTS & CONNECT
Why do 600 million people, 70% of the population of Sub Saharan Africa (SSA) live without electricity? It is not because the technology doesn’t exist or that we don’t know how to build and install it. It is because energy providers have not found a way to profitably connect them to the grid. This does not mean that those without electricity today do not desire the basics of electricity, such as lights at night or a charged cell phone, it is just that they cannot afford luxury electricity and mass consumption, which is required to make large scale grids profitable. They not only can’t afford the cost of luxury electricity; they can’t afford the appliances required to consume this electricity like washers, driers, dish washers, multiple lights, fans, air conditioners, computers, TV’s, etc…
Likewise, only 120million of nearly 1 billion people living in SSA have access to the internet (in 2012 the UN General Assembly declared access to the Internet a Universal Human Right).
YOU can fundamentally make a difference in the lives of many by supporting us get this project off the ground! Not only will YOU have a direct local impact, but YOU will help us kickstart the only village level branded entity focused entirely on this grossly underserved population. Our objective isn't 1 or 2 locations, but hundreds and thousands. Everyone talked about the markets of China and India, however Africa, as a continent, has a similar population as India, but she is consuming 35% more. We aim to bring access to the masses via first giving the masses access to the world.
DABADDO SOLUTIONs = ENERGY+plus
@ DABADDO, we don’t sell energy; we sell energy solutions.
DABADDO was created to bridge the digital and energy divide in developing countries by focusing on solutions to meet the energy, technology and connectivity needs of people living at or just above the poverty level at a price they can afford, providing them a step change in the quality of their life.
THE DABADDO MODEL
- Dabaddo® owns and operates or franchises on/off-grid renewable energy powered Connectivity Centers
- Each location has direct grid connection or ~1500watts of installed solar panel capacity with ~5-10,000watts of corresponding battery storage capabilities
- Each location has an internet connection
- Each location provides rentable computers and lights
- We sell energy solutions by recharging battery powered devices
- We sell internet and VoiP airtime (where permitted by law)
- We sell, rent and “lease to own” computers and battery powered devices
- We provide rented gathering and training space
- We are a point of sale for complementary services and retail products
Rule #1 – We must provide solutions that are needed, affordable and profitable to ensure sustainability.
Rule #2 – We build a shared value company where everyone benefits, and we feel good about that!
The Benefits to the Community
- Job creation (minimum 3 local)
- Communication access (Internet & VoiP (if allowed by law))
- Education access
- Point of training (health/ agriculture/ technology/ language)
- Point of community congregation (match/ movie/ meetings)
- Access to Light and rechargeable light devices
- Improved prospects for water sanitation and health
- Increased information available
- eHealth/ eGovernment/ ePossibilities
- Increased village productivity with access to lights
- Micro-grid connection
- Enablement of SME development
- Money Transfer / Mobile Banking
- Ability to participate in larger corporate and NGO sponsored programs for economic and social development
BIG WORDS – WHAT DO THEY MEAN IN PRACTICE
- The Convergence of Energy, Technology and Connectivity
- Bridging the Digital and Energy Divide
- Step Change
- Enabling Rural Economic Development
They mean thinking differently, understanding needs, and providing affordable and profitable solutions that have a meaningful sustainable impact today and for generations to come. This means a business model that is complementary and scaleable at the right price.
- A child reading at night by solar light
- A mother video Skyping with her son she hasn’t seen in 2 years
- Sisters talking overseas on Viber for an hour via wifi for the price of talking 2min on a cell phone
- A girl, quitting school at 12 and getting her baccalaureate via non-traditional education, because the curriculum is on a tablet computer she access at night, after chores, in a safe, secure, lighted environment
- Being a classroom for those that can’t physically attend a class
- An internet connected tablet instead of a blackboard
- A light for a midwife assisting a mother give birth at night
- It means doing the right thing, and doing well by doing good
COMPLEMENTARY & SCALEABLE @ THE RIGHT PRICE
We primarily own and operate to ensure standardisation, localisation and quality. We install energy, technology, Internet connection in a 75m2 space on a 400m2 location. All our solutions are less than $1.00, to meet the needs of a low income society. For example: rechargeable lanterns, $0.10 per night, replacing dangerous candles, kerosene and throw-away batteries.
SHARED VALUE MEANS EVERYONE CAN PARTICIPATE
We have designed a 4 option participation schedule to maximise:
- Our investment,
- The village ability to benefit from our presence, and
- To help promote educational access for school children to computers and the Internet.
Engagement Option 1
Dabaddo 100% own and operate
- Ownership – 100% Dabaddo
- Financing – Dabaddo self finances – Zero cost to community
- Profit and Loss – 100% Dabaddo
- Management – 100% Dabaddo staff and and management control
Engagement Option 2
Dabaddo 100% Own & Operate+ Village Profit Share Benefits
This option provides the community with non-cash profit share benefits in the way of community access to Internet time. This option provides a fixed access for up to 100 hours a week (20hrs a day: 5 computers available for 4 hours, between the hours of 9am and 1pm) of educational access to Internet and or computer usage for school children and teachers for a maximum of 3,500 hours a year for 5 years. This has the global financial equivalent of 6,665,000CFA (based on current price of 400CFA per hour at a cyber café) benefiting the community education. For such benefit, the community must provide the building and electrical wiring requirements as per Dabaddo specification in Appendix 1.
- Ownership – 100% Dabaddo
- Financing – Joint Financing with community providing infrastructure and land to Dabaddo specification and Dabaddo providing electrical and technical equipment.
- Benefits – Split Dabaddo / Village community educational benefit (contractual profit sharing agreement)
- Management – 100% Dabaddo staff and management control
Engagement Option 3
Dabaddo 100% Own & Operate + Village non-cash and 25% cash Profit Share
This option provides the community with non-cash profit share benefits in the way of community access to internet time and cash profit share.This option provides a fixed access for up to 100 hours a week (20hrs a day: 5 computers available for 4 hours, between the hours of 9am and 1pm) of educational access to Internet and or computer usage for school children and teachers for a maximum of 3,500 hours a year for 10 years (verses 5 years in option 2). This has the global financial equivalent of 13,330,000CFA (based on current price of 400CFA per hour at a cyber café) benefiting the community education. For such benefit, the community must provide the building and electrical wiring requirements as per Dabaddo specification.In addition, to participate in the cash profits of the business the community will make an upfront cash investment of 6,560,000 CFA.For this investment it is entitled to 25% of any net income as determined by international accounting standards of business, compliant to Senegal law, with the responsibility of Dabaddo operating company.While there is no guarantee of financial profits, current estimates forecast share of profit to be ~667,000 CFA (1,016 Euro) yearly, bringing total 10 year communal benefit forecast to 20,000,000 CFA.
- Ownership – 100% Dabaddo
- Financing – Joint Financing with community providing infrastructure to Dabaddo specification & 6,560,000 (10,000 Euro) cash and Dabaddo providing energy and technical equipment.
- Profits – splitDabaddo / Village (contractual profit sharing agreement)
- Management – 100% Dabaddo staff and management control
Engagement Option 4
Commune 100% own and operate with franchise agreement. Under this agreement the commune will pay – 5% topline Revenue, $0.001 per watt and $0.06 per hour internet access, cost plus 15% for external expenses (Vsat, Cloud, Accounting, VoiP accounts), all replacement electronics sourced through Dabaddo.
- Ownership – 100% Commune
- Financing – Commune self finances ~23,234,000CFA (35,000Euro) less any credits for local infrastructure building up to 6,900,000CFA (10,600Euro)
- Profit and Loss – 100% Commune
- Management – 100% Commune staff and management control
- Franchise Agreement – Yes, – 5% topline Revenue, $0.001 per watt and $0.06 per hour internet access, cost plus 15% for external expenses (Vsat, Cloud, Accounting, VoiP accounts), all replacement electronics sourced through Dabaddo
We are an experienced team of dedicated professionals, who have lived and worked in Africa, and who believe in taking a systemic business based approach to providing sustainable solutions that deliver both social and economic benefit.
THE BUSINESS AND FINANCIAL DETAILS
We have been self financing, modelling and crunching numbers for 6 months. We've contacted at least 5 vendors for every product component that we hope to source. We have talked to several specialists and leaders from throughout West Africa, and we have finally landed on Senegal, as our focus country. We have a very strong Senegalese Country Champion in Mr. Habibou Aidara, the Vice Counsel of Senegal to Morocco, the Mayor of Bonconto Commune (pop. 12,000) and the President of Regional Mayors (pop. 350,000+).
We got on the plane and flew to Dakar. We talked to Ministers and Regulators. We then drove 600km to Bonkonto, around the back of the Gambia, and we asked a lot of questions to validate our financial assumptions. We learned a lot. Thankfully, we learned that we were very close in most of our financial pricing assumptions.
We've built worksheets full of tabs and tabs of financials, like: full set of assumptions, income statement, cash flow, depreciation schedules, CapEx schedules, interest and principle schedules, Connectivity Center roll-out schedules complete with build plan and contribution towards yearly income, bill of material list, product costs and electrical consumption needs, etc... We've done sensitivity analysis forwards and backwards. We've broke the model and rebuilt it. We've challenged our assumptions and found solutions to the challenges. We know that what we have on paper isn't 100% correct, but we also know that we have done our homework and we have the necessary expertise to solve any challenges that come our way.
We offer a very strong financial and sustainability story, focused on the least served communities in Sub-Saharan Africa. While we are still in the start-up phase, we plan to have 500 locations in the next 6 years. Each profitably operating and established in a limited or off-grid community with an installed renewable energy capacity of 1500wh of solar panels and 5,000wh of battery storage capabilities per location.
PanAfrica, we strive to create 1500 direct rural jobs, connect 2.4M people, offering 106MM hours of internet access, charge 40MM cell phones, provide 25 Million nights of light, and a whole lot more.
We focus on multiple revenue streams to diversify risk, but we are heavily dependent initially on computer rental for internet and communication access.
Financially, our six year projections drive a $20MM topline, $8MM & 40% EBITDA, 59% ROA, with the ability to internally fund 25-30% growth.
USE OF KICKSTARTER FUNDS
100% of the requested supporting funds are going towards capital investments. All items have been negotiated at wholesale or better costs. There are no soft-costs being funded. All soft costs will be self-financed by DABADDO.
Risks and challenges
All projects carry risks, and African projects carry more than most, but nearly all can be mitigated through proactive planning and management. I will attempt to list the major possible risks and the mitigation actions.
Overall failure to achieve profitability targets – Failure is not an option. We have lived and worked in Africa enough to know that by taking a systemic approach to the model coupled to an economy of scale that there is margin available to ensure a profitable business. We target a 40% EBITDA. The project financials are built on current pricing or cost points that people are paying today either in the village or in the nearest town with services. We have done on the ground surveys in Bonconto, Senegal and surround villages, and we have taken a conservative approach to all revenue price points, so that we are at or below current market levels. However, a volume risk still exists. Once again, we price right to ensure customers and volume, but we also position right by only entering catchment areas that have 3-5,000 people within 1hour walking distance. Likewise, we conservatively model for usage per revenue stream, and leave upside to adding additional services.
Government Authorizations – Our local and country champion is the Vice Counsel of Senegal to Morocco. He has been very supportive of introducing us to local Commune Mayors/ Leaders as well as National Ministers. We have met with the Ministry of Post and Telecom, Minister of Finance. Likewise, regulatory bodies like ARTP, in charge of telecom regulations and Vsat authorizations. We have been given assurances that everything we have proposed to build and operate is authorized. Locally, we have been granted 400sq meters of facility space to construct our location, with similar land grant possibilities in each Commune that have spoke with.
Not enough demand to meet economy of scale– In our first trip of presenting our business to community leaders, we met with 12 Commune Mayors representing over 200,000 people, we have demand today for over 40 locations, and we have only represented to a fraction of the country.
Local management – Our model provides for 2 operational staff per location and 1 night security guard. While staff theft in a cash based business is a real threat, our business model is based on selling energy and Internet connection time, all of which are able to be remotely monitored. Likewise, we will have one of the founders or our to be hired Regional Manager at our first location 50-75% of the time to validate all revenue streams as we launch. As we grow, we have a dedicated regional manager constantly moving between locations, collecting money and delivering inventory replacement.
Theft – The physical structure is built with an enclosed exterior, supported by a robust interior kiosk designed to be locked down tight. All electrical equipment and inventory will be securely locked in the interior kiosk every night. This will be further protected by the presence of a night guardian. All solar panels will be installed on the roof, and secured in framing. All cabling will be encased and hidden from sight. All computers and tablets will be fixed with antitheft cables to prevent daytime walk-away risks. National ID cards will be needed for all rentals.
Competition - While there are a couple of competitors following similar business model in Africa, and 1 particularly in Senegal, they are all still fairly early stage. Likewise, they tend to take only a franchise model, and are limited in their support without a complete integrated package. We also have placed a noncompete clause in our commune MOU's, granting us 5 years of no competition from cyber cafes. Obviously, we can't (nor would we want to) block telephone companies from enhancing their broadband coverage, but we believe that we can beat this risk at price point, and possibly embrace it through capture and wifi redistribution. We can be beneficial partners to telecom in that they need points of on boarding, sale and most of all customers with charged phones.
Delivery - While we have short-listed vendors for all our products and components, finalising the details are always a challenge, along with international shipping. This challenge becomes easier in the final negotiations, once we've secured funding. Likewise, with funding secured for the infrastructure, we will have more of our own matching funds available to dedicate to hiring some additional support staff.
Community expectations - We also face a rapid time crunch to meet community expectations on delivery. Our window of expectation is 2-3months. Likewise, we have demand for over 40 additional Connectivity Centers. We have been clear that we will only be able to discuss moving these forward once we have completed the test phase of our first location and secured larger funding.
The end of the day, 100% of the requested supporting funds are going towards capital investments. All items have been negotiated at wholesale or better costs, and far below what a local community could purchase them for on their own. There are no soft-costs being funded. The communities that we service need the services more than we can imagine. In the worst case scenario that we would be forced to abandon the large scale deployment of our project, we would sell the capital infrastructure (business) to a wealthy local or Commune in a contract-for-deed buyback program. Commune's have already inquired about this prospect, as it is a risk for them to bring the services and then not have those services remain available.Learn about accountability on Kickstarter
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