About VentureBuilder
An innovative model for African-owned solar companies
From 2019 to 2026, VentureBuilder combined patient capital with long-term enterprise development support to help African-owned and managed off-grid solar companies grow. It is no longer taking on new companies or partners.
The vision behind VentureBuilder
When VentureBuilder was set up, over 100 million African households lacked access to modern electricity services, typically spending considerable sums on stopgap lighting via kerosene, candles, and dry-cell batteries, and relying on costly and inconvenient charging services to power mobile phones.
VentureBuilder aimed to tackle this access gap, helping indigenous distributors grow into high-impact solar companies. Across the continent, local distributors often had years of experience serving thousands of local customers with a variety of products. However, they lacked the human and financial resources to pivot into the pay-as-you-go (PAYG) solar business model. VentureBuilder's combination of patient capital and technical support was designed to scale a new generation of local solar companies that would deliver modern, affordable, and reliable electricity to millions of Africans.
The market in 2019
At the time, even though the PAYG solar industry was flourishing, it served less than two percent of the total addressable market in Africa, with only a small number of companies operating at scale. Incumbent players had sometimes struggled when expanding out of their core markets, highlighting the complex and unique character of each market, particularly when it came to human capital, distribution strategies, and extending credit.
VentureBuilder's founders believed that the local market knowledge and customer bases held by established distributors, if combined with the right mix of PAYG expertise, talent development, capital investment, and product partnerships, were the keys to scaling the delivery of PAYG off-grid solar products in underserved markets in Africa.
How it worked
From premise to practice
How companies were selected
VentureBuilder's founders believed this approach was replicable in markets across Africa. Rather than pursuing start-ups, VentureBuilder sought out "best-in-class" established local distributors that had strong existing customer bases and could rapidly scale sales with the right investment of capital and expertise. It looked for the following in prospective partners:
Ownership & Management
The enterprise had to be locally owned and managed, with an excellent reputation and strong roots in the community
Target market
Rural off-grid customers had to be at the heart of its business strategy, particularly underserved low- and middle-income residential and SME customers
Business model
The enterprise had to own the customer relationship and distribution channels, and show an interest in scaling consumer financing capacity (i.e., pay-as-you-go offerings)
Traction
No prior solar experience was required, as long as the existing customer footprint was broad or customer relationships were strong and at the core of the current business model
After identifying high-potential prospective partners, VentureBuilder carried out in-depth due diligence, intended to ensure that only businesses which met a carefully designed, exhaustive set of criteria became preferred local distributors (OpCos).
What companies received
A key element of the VentureBuilder approach was to act not simply as an investor, but as a development company, taking long-term positions in local distributors and then working closely with them for years, with the aim of enabling them to scale sustainably.
This process started after due diligence, with VentureBuilder specialists providing investment-readiness support to OpCos, including an in-depth review of their strategy and operations and development of their comprehensive business plan and financial model. What followed was designed to be a long-term support package that provided VB OpCos with not just patient capital but several years of Enterprise Development Services (EDS).
The support package designed for each VB OpCo is detailed below.
Financial investment
- Patient capital, primarily through convertible debt and equity, aligned with VB's mission to support local distributors over the long term without sacrificing critical near-term OpCo cash flows.
- VB aimed to fund all of the OpCo's equity financing needs over a two-year period, so that entrepreneurs could focus on building the business rather than fundraising.
- VB also sought to partner with specialist working capital debt providers to help OpCos secure debt to cover inventory and consumer receivable financing needs.
Enterprise development services
- Tailored annual EDS programs were designed to be delivered by industry experts over two to three years.
- EDS was designed to build capacity in strategic, operational, and financial matters, centered on building OpCo systems and human capital to accelerate and sustain growth.
How it played out
VentureBuilder's final learning report looks at how each part of the model worked in practice.
Selecting established distributors
Lesson 3
A strong track record does not guarantee that a model fits its market
Read Lesson 3Long-term enterprise development
Lesson 4
Enterprise development creates value when capabilities stay in the business
Read Lesson 4Patient capital through a commercial vehicle
Lesson 6
The businesses needed patient support; a commercial vehicle was not necessarily the right way to finance it
Read Lesson 6