Quick Summary
From the early stages of your organization, Point Nine, a listed investor is ready to walk with you especially for potentially scalable businesses. AMMP, a solar software organization providing operational platform for decentralized renewable energy systems educate us on their funding journey together with their Point Nine experience. If you are an entrepreneur, this is just cut for you. This article will enlighten you on the following:
- AMMP Uniqueness
- Point Nine Investment
- AMMP Markets in Africa
- Point Nine Funding Plans
- Funds sourcing advice from the horses mouth (Point Nine)
Listen to podcast interview HERE.
Article
RiA: Good morning good afternoon everybody from wherever you joining us today. Today we have a very interesting company that we are receiving, that’s two companies that shows you how we are blessed. I won’t tell you what they are doing, there are two of them there, and they should be able to give you enough information. All I can also say is that there is an investor and an investee right! That’s all I can say at the moment. This is our podcast interview where we bring to you exciting people in the sector that are moving and shaping the sector for the continent of Africa. So, Stine good morning, good afternoon and how are you today?
SN: Good afternoon to you. Am doing well. Thanks.
RiA: Louis, hallo, how are you?
LS: Am well thank you tony.
RiA: Excellent. So, let me dive into the questions because I can see some people are salivating. Ladies first, Stine I am just going to start with you and have a brief introduction of yourself and your company. That would be great for us please.
SN: Thank you very much tony. I am Stine. I am one of the co-founders together with Svet here on call. I am the COO and Svet is our CEO. And shortly about the platform, it’s an operational platform for decentralized renewable energy systems, allowing operators to have a full portfolio view of the systems they are operating independent of the manufacturers they are using, their hardware or the technologies being used in these systems. We see AMMP as a tool to accelerate the shift in the electrification across Africa. Basically, going from using fossil fuels to more decent renewable energy. And we believe that the software is needed to facilitate this.
RiA: Excellent. Am sure you going to tell us more. So, let me now move to you luois. Would you mind introducing yourself and the company that our audience can get to know who you are please?
LS: My name is Louis. I work at a firm called Point Nine. That’s a primarily a remote fund actually, and we invest in a very early stage businesses around the world. So, we have been around for about 10 years now and we were the first investors of bed shelf like successful businesses some of them have become large ones today like there is a company called Xender which was a small company in Copenhagen at the time and type farm which is a company in Barcelona. We’ve done about 110 investments so far some of them are much bigger by now. And our co area of focus is in Git software but we sometime can articulate around different industries amp and vast investments in other sectors.
RiA: Excellent! That’s great to hear. We are talking about AMMP today, could you tell us what specifically has interested you and your firm on this company AMMP! What sets them apart? Could you tell us please?
LS: Our job as a listed investor is to identify teams and markets that we feel there are inflection points when it comes to penetration of technology and to try to meet investment needs since we believe they are the right ones to cause this change. And we’ve been following the energy markets and I actually was introduced to that I thing about two years ago by an investor in Amp and he mentioned that the company was very interesting and we started speaking and ta that time I think the company had just a handful of customers and I started learning more about the space and I have to admit I was fascinated by the change happening around countries that AMMP are prevailing like Nigeria at the time where we could see that renewables and especially highbred systems relying on TVs, batteries and generators where actually being used more and more, and we could see the pace at which the change was happening in Africa was unprecedented. So, it’s kind of spiked our interest of the market. At the time the company was a little bit too early site but we kept in touch and miles away I was receiving an update and I was seeing that the company was doing very well. So that’s like a reason why we were interested in this market and at the same time our willingness to work with the team because It felt like they were operating at the right pace. So that’s what got us excited. And I think in general we’ve been investing in lots of different markets and we’ve seen that sometimes interesting opportunities start in developing countries and end up being global there after and maybe one example that I can give you is that we invested in a company that was dealing software for microfinance companies in Bangladesh, 8 years ago, which was a small company at the time and now the company has grown to truly a global business. And it’s like a car banking infrastructure for most of the large banks like Revolut which you might know.
RiA: Excellent, that’s a very extensive feedback which is very good. So, if an investor is saying no to you at the start, keep going because they might come back later. And that’s what happened with you Svet. So, I wanted to know Svet what does that represent for you, this investment.
ST: Thanks, Tony, for your question and hallo to your listeners and viewers. It represents two main things for us and first of all it obviously gives us a good amount of financing to pursue this business forward and to pursue it bravely. To continue serving our existing customers but also go out and look for new customers, find new opportunities to add value the operations of our customers and our business and just find more ways to have an impact. The second thing it does is that it brings on board a sounding guidance and can give us really excellent advice about the kind of things to try and the kind of things that may lead to success in the future and the kind of things that may be most valuable for our business as we go forward. So in that respect, it also helps to have investors who understand the early stages of building software look like in something like a software is a service where in the start let’s say your revenues are not going to be that great but there are specific ways that you can focus yourself and your growth that are likely to both result in success for you and result in an impact that you going to have to your end customers. Having investors who can guide us through some of those valuable steps is really valuable and of course bring to the table the experience that we have in emerging markets, the experience that we have in energy in these fields where we’ve developed very compelling solutions and very comprehensive networks in these last few years where we have been in the last few years.
RiA: Thank you very much Svet. Louis, let me just come back to you. You are an early day’s investor, which means you are used in handling risks at the start of any business. So, at the time when investors see Africa as a risky place to do business, I was actually wondering what has excited you in the decentralized renewable energy market?
LS: I feel there are two components to your question. One is investing in Africa as a private venture capital fund the other one as centralized energy market. So, I’ll take this two. The first one I think we are a global fund; we have invested in twenty-eight different geographies so far. Out of the latest investment streams that we have done so far, one is in Romania and the other one is in Scotland. You know the beauty of software; you can build a global business form anywhere. So, at the end of the day we see this as what is the best thing to back from where they start from to build a global winner. Sometimes you end up finding it in Italy where I am right now, sometimes you end up finding it in Amsterdam or Nigeria. And as I told you before we are interested in this market because early stage investors, we can tell balanced risks by having an opportunity to tell outside outcomes and this is possible when you meet very fast paced growth and Africa is a place where we see very fast paced growth in the energy market. So to your question why Africa and why the energy markets specifically, and maybe last part is one of the reasons why Africa is so interesting is so interesting in terms of energy markets is that electrification of some of the areas is very low which makes distributed energy systems even more compelling because at the end of the day they have close to no competition one, and second on when we did some of our research we discovered that the price of electricity provided by the grid is 10x more expensive making renewable energy systems 10x more competitive. So, it felt right actually to invest in energy markets than invest in Europe and we were fortunate enough to meet Svet and Stine and we shared the ambition of building a truly global company starting from there.
RiA: Excellent! I love this belief. We need people informed like you. If I come back to you Stine, I think I’ve heard Nigeria is the main market in Africa, are there other markets that you are tapping into the continent and if not, are you planning to expand into Africa?
SN: Good question! We all know Nigeria is movie extremely fast but we are also active in other countries across western Africa in Sierra Leone, Ghana and in Chad and a more eastern southern side, we are active in Kenya, Tanzania and Zimbabwe and also looking at South Africa of course. There is a lot of different factors that are driving why we can be in these different countries as Louis said. Sometimes it’s about the distribution grid, unreliable power, black-outs that are driving the need for more decent energy that are driving the need. Mostly we are active both in rural areas, we see mini-grids deployed in villages but we are also active in urban areas where there is a huge need for back-up power and there is a drive for this back-up power to be supplied by renewable energy and not by pure diesel generation and that’s where we come in because we can facilitate that.
RiA: Okay! Excellent! Thank you. Louis, is Point Nine planning any other investment in the energy sector? AMMP was the first one but are you planning to do more in the sector?
LS: Yes, we are. At the same time, we are opportunistic in the way we look at investment is like we are software specialists. One is that we are very happy to look at investments that are software opportunities in the emerging markets.
RiA: Okay! That’s fine. Short and sweet! Am sure many people will be listening. So, let me go back to you Svet, I just wanted to know coz we talked about software company, so if there is one thing that we could see is that the digital economy is actually growing in fact fast-tracking and the event of covid has just accelerated the change. I wanted to know according to you how important are those digital solutions for the continent of Africa to move to full electrification by 2030 which is the SDG 7?
ST: Thank you so much for that question. It’s critical. I don’t really need to give you other examples of where it’s been very important like the prevalence of mobile phones and the impact it has been, the spread of mobile money that has allowed people in remote places with weak infrastructure, bad roads to communicate to exchange with each other and we see a very similar trend with energy, again as Stine made a the point and you yourself did also, there are so many places with poor infrastructure and people are not getting any power at all or they are getting unreliable power. The more we can enable energy developers and operators to actually deploy infrastructure to these locations, the more we can enable then run these infrastructure successfully to know what is happening with their systems no matter how remote they are especially in the times of covid to work with those systems from a distance as possible rather than to have to send people out on the field trips, all the risks involved in that: to be able to run renewable systems that don’t require any inputs verses running diesel generators that need to be refueled, maintained and repaired etcetera. We see such a huge role for digital solutions for all of these use cases and with things like mobile money which has become a very important enabler down the line.
RiA: Excellent! And I would definitely subscribe to this sentiment. So last question for you Louis, I think in that case we are regularly approached by multiple entrepreneurs in the continent and the common thing among them is that they are pretty much looking for funding or funders, so I wanted to know do you have any special message for this kind of people who are looking for money and what is the kind of attitude to have?
LS: The first one is that am very happy to exchange emails with all of them. So am going to share my email and I will be happy to answer. I think we are a very special source of capital and am not sure we are a venture fund. So, we invest in very risky businesses as we’ve said also ones that have the potential to become very large companies and at the same time, I think it’s right to think about what’s the right source of funding depending on the type of businesses that you are building. We invest in businesses where we feel there is potential to grow exponentially in markets that are growing very fast you have to have the ambition to do that and also be able to sustain that growth which is not easy and I think we are aware of that. And our job is not only to invest but also to partner with entrepreneurs to help them know what they don’t know and structure their businesses so that they can get on the trajectory. To make it short, I think it’s important to think about what is the right source of funding depending on the project but if indeed you want to build a very large scalable business, we are very happy to talk with anyone wants to walk that path.
RiA: I think you might end up being very much overwhelmed. But thank you for that. I have dealt with lots of investors and not many of them are actually approachable so having people like yourself that are happy to speak with people is the first step. Now, whether or not you are going to invest is another thing. At least having the opportunity to speak at least is great. So I want to move to a closer conversation with you Svet, please Stine, I want you to tip in if you can because that can also come in also as a personal advice the question I want to ask is for each of you, what would be the biggest advice that you would give to companies who like you are going through fund raising, so what is your take coz I heard AMMP approached Point Nine before and they said “No” and now they saying “Yes”, you must have done something right? Whats your biggest advice? And please Stine, tip in as well.
ST: First of all, I would echo what Louis said. You get the answer “No” very often for very wide range of reasons and that for an entrepreneur I think is just something that you can’t let get to you. You going to get the answer “No” not just from investors, you going to get it from prospective customers, you going to get it from employees, and others right. And I think you just have to come to grow a thick skin. For investors specifically I think you going to have to persevere, keep looking out there, keep looking for opportunities, keep on of course without being obnoxious you know. Following up with investors where you think there is a potential match. Keep sending them updates and maybe at some point they will respond. I think it’s very good to do two specific things, one of them is be quite clear eyed between the match you present to them and what they are looking for. Every investor is going to come in with some hypothesis of what they are looking for. Some investors as Louis said would say, “Look, all we want is to be able to see a trajectory and how this can be a great business and of course most investors in the early stage will be looking for what they say is a really solid team. Some investors would say that there is some particular area of impact that I am looking for. You know certainly in our space you know there are investors who would say, “I want you to demonstrate that you are going to electrify as many homes for example. There are investors who would say, I want to exit this company in a couple of years and I want to make sure I make a nice exit. There are many factors like that, that you should consider as you look for a potential fit as you look for different investors out there and make sure that there is an alignment between what you want to do between your business and what the investor is looking for. So, that’s definitely one point. The other point that is that make sure that you put out there the kinds of things that they will care about once you have identified who they are and showing understanding in terms of what they are looking for.
RiA: Excellent! That’s a great piece of advice. Would you want to add on to that Stine?
SN: One thing that I would like to add is that it’s of course about wanting an investor to want to invest in you.AS much as you are saying “Yes” to that investor, it’s also important to find someone who is the best match for you also at a personal level. From the beginning it’s been quite a very good match with Point Nine and with our other two investors Raba Partnership and Musha Ventures. They are bringing in exactly expertise we need from different areas. The second thing I want to point out as advice for other entrepreneurs is that make sure you have the right team with you. That’s going to be one of the main concerns to investors when they speak to you. I have been quite lucky with the co-founders and the rest of our team.
RiA: Excellent! Definitely. Like they say, team work makes the dream work. So, it was a pleasure for me to talk to all three of you today. Its afternoon, my time here, I am sure people will have fun time listening to what you’ve been saying, they will learn a lesson from your experience. So, Louis they will be over flowing your inbox, I can promise you. We are very happy at Renewables in Africa to learn about this partnership that you are performing and if there is anything that we can do we will make sure that we contribute and support as we support already by bringing up this interview to the people so that more can learn about what you are offering to the market and the industry. All that is left for me to say is that I had a very good time talking to all of you and have a blessed and fantastic day. Thank you very much.
LS: Thank you, Tony,
SN:Thank you. It’s been a pleasure
ST:Thank you.
Listen to podcast interview HERE.
