Kenyan pay-as-you-go clean cooking fuel provider PayGo Energy has raised a US$1.43m debt and equity financing round to fund its expansion.
PayGo Energy allows households to cook on clean burning Liquefied Petroleum Gas (LPG) and uses pay-as-you-go technology to allow customers to purchase the system over time via mobile money.
The funding round involves investors such as Novastar Ventures, Energy Access Ventures, Village Capital, Global Innovation Fund, and Global Partnerships/Eleos Social Venture Fund.
The investment will finance the expansion of PayGo Energy’s customer base in Nairobi, the development of its software platform and next generation smart meter, and the growth of its team.
Since launching its first technology pilot in 2016, Paygo Energy has developed a steady customer base in Nairobi, while the company currently has an international team committed to launching its hardware and software technology across the region.
“A billion households are forced to cook with dirty fuels everyday, which is not only a serious development challenge, but also a significant market opportunity. This financing will allow us to invest deeply in our technology, build a service that our customers love and prepare for commercial rollout,” said PayGo Energy chief executive officer (CEO) Nick Quintong.
The startup’s mission is to unlock clean energy for the next billion, by revolutionising the distribution of cooking gas. Urban households living at the base of the pyramid spend a relatively large amount of income – US$0.50 per day – on fuels like charcoal and kerosene, which expose households to health and safety risks.
These households are currently priced out of the cleaner LPG market, but PayGo Energy provides an improved service system and an innovative smart metering technology that eliminates upfront costs and enables customers to access clean burning LPG on a pay-as-you-go basis.