Founded by an ex-Amazon employee, Powerfull wants to help solar asset financiers mitigate risk

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September 12, 2023
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6 min read

Energy costs are some of the most significant for any business. But while many entrepreneurs globally primarily depend on a national grid, Nigerian entrepreneurs often use their national grid as a backup.

Such is the poor state of the country's electricity sector that the acronym of the National Electric Power Authority (NEPA), the now-defunct body responsible for coordinating electricity in the country, was renamed "Never Expect Power Always."

A 2022 report revealed that over 40% of Nigerian households own and use generators, spending $14 billion annually on petrol and diesel. Businesses are not left out either, with those in the manufacturing sector spending as much as ₦‎144 billion in 2022 to generate power.

Despite the unreliability of the national grid, many businesses can't turn to alternative sources of energy to keep their businesses running. Solar panels, for example, come with a high setup cost that often discourages potential users. Nigeria's low credit penetration also ensures businesses struggle to access loans to buy solar assets.  

Over the past few years, some organisations have attempted to solve some of these problems.

MTN provided solar financing options through a partnership with Lumos, while Access Bank provides up to ₦‎50 million for solar financing. Startups like SunFi, which recently raised $2.3 million in seed funding, also play in the space.

But there's a crucial part of the equation that often prevents financial institutions from providing finance — credit and risk assessment. How do you ensure timely loan repayment? Powerfull, a startup founded by former Amazon employee, Ifeanyi Ukwuoma, hopes to fix this problem.

Men lie, women lie, numbers don't 

Ifeanyi Ukwuoma pitching Powerfull at the Startupbootcamp
Ifeanyi Ukwuoma pitching Powerfull at Startupbootcamp

Despite graduating with good grades from the Federal University of Technology, Owerri (FUTO), with a Geology and Earth Science degree, Ukwuoma struggled to secure any jobs for a year.

Distraught, he focused his energy on getting a scholarship to study abroad, eventually landing an Erasmus Mundus scholarship.

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In his first year, he took courses in the Netherlands, the UK, Germany, Poland, and Hungary. For the second year, he opted to complete his studies at the University of Exeter and Delft University of Technology. After graduating, he took up a role as a supply chain coordinator at STX Engine before moving to Amazon two years later.

Back in Nigeria, Ukwuoma's mother, who ran a small cold room, was searching for a solution to the epileptic power supply. However, she couldn't afford to pay upfront for a solar panel, and none of the financial institutions she visited were willing to finance the purchase.

"I remember speaking with one of them, and he kept on saying, high risk, so I replied, 'When you say high risk, what do you mean?' and he gave me a list of things. 'She's not a registered business. She doesn't have a long operating history. She hasn't stayed in a particular place for a number of years. We don't know her cash flow and we don't know how much energy she's using.'"

Since he'd been helping her organise her business for a few months, he proffered an answer to those questions, but the financier quipped, "men lie, women lie, data doesn't."

Recognising that the lenders' reluctance stemmed partially from their inability to assess a borrower's potential, he teamed up with Mayowa Abiodun to start Powerfull.

Abiodun, who leads the startup's technology efforts, previously worked at Momas Electricity Meters Manufacturing Company Limited (MEMMCOL), and has experience building payment systems.  

Unlocking solar financing using Powerfull 

Mayowa Abiodun Co founder and CTO Powerfull

It's easy to assume that Powerfull provides solar financing to its customers, but Ukwuoma is quick to shut down that notion. He insists that it facilitates the distribution and collection of loans using a smart meter, smart wallet, and mobile app.

While the mobile app measures energy usage, the smart wallet monitors repayment compliance and can be triggered to disconnect a user from the energy source. This way, it acts as a payment platform for energy companies. An important metric is how effective they are at ensuring debts are paid.

Its primary business model targets businesses. For this vertical, a business in need of solar asset financing, purchases a smart meter from Powerfull, which is installed on the solar asset they wish to purchase.

The meter calculates how much energy they consume, providing lenders with data they can use to make a decision. The minimum duration for this is three months, but can be longer depending on a lender's requirements. By understanding how much a business spends on its energy needs, a lender can provide them with a commensurate lending period and interest rate. On the other hand, knowing their energy needs ensures businesses get the right solar assets.

There's also an energy-as-a-service option for businesses that want to use solar energy, but are unwilling to buy the solar assets. These users can buy electricity units just like users of the national grid, but their access can be cut off remotely once they run out of electricity units.

Currently, Powerfull works with credit partners who refer prospective borrowers to them. These borrowers are then educated on the need for Powerfull's meters before picking them up. Ukwuoma says the startup takes as much as two weeks to educate prospective customers to ensure they understand the implications of acquiring the meters.

There's an extra layer of security to prevent vandalism or customers increasing energy consumption. All meters installed by Powerfull are tamper-proof and are designed to turn off power supply immediately they are opened.

It also provides data that can be used to determine whether a customer is using more or less energy than they subscribed for. When this is detected, a team of trained personnel goes to the location for an assessment, as its setup prevents unqualified personnel from fixing any damages.

Powerfull charges users a 7.5% fee for processing loan repayments, while the smart meter starts retailing from ₦100,000. While some may baulk at the price, Ukwuoma says that it helps Powerfull and the lenders determine which businesses are committed to making the transition to solar energy.

Compared to the 1.5% most fintech startups charge, its 7.5% fee is significantly higher, but Ukwuoma explains that it helps the startup cover its cloud storage costs.

While the primary focus is on businesses, Ukwuoma explains that they have a B2C component. Here, customers can download the Powerfull app to purchase electricity units.

Given its strong B2B focus, Powerfull is big on partnerships with solar asset financiers or solar asset producers. So far, it has closed partnerships with Blue Camel and Neotropical Technology. It also uses Steamaco's API services for its smart meters.  

Funding and challenges 

Although Powerfull has been primarily self-funded since its launch, the startup has received some funding from Startupbootcamp. Additionally, it is preparing to raise a £350,000 pre-seed round in 2023.

"We want to be able to deploy around £48 million in terms of credit funding to solar asset financing. At the same time, get us to £75,000 monthly recurring revenue in 18 months."

He states that one of the biggest challenges they've encountered centres around educating people on the benefits of switching to solar power. With the initial cost significantly higher than installing a diesel generator, many businesses often opt to continue with what they're used to.

Acknowledging that more time would be needed to drive the massive adoption of alternative energy sources, Ukwuoma explains that it informs their decision to target large businesses and mini-grids as this allows them to make money while simultaneously driving awareness.

Another challenge has been energy management. Using the example of a prospective client who had an old refrigerator, he pointed out that many Nigerians use appliances that consume large amounts of electricity and are incompatible with solar solutions.

"If there's anything I've learned so far, [it's that] the poor people pay more for electricity in Nigeria. Our data shows it. They're using very energy inefficient stuff and our data shows that it accounts for 40% to 60% of the energy costs that people get." Currently operating in Lagos, Nigeria, Powerfull plans to expand to Abuja and Port Harcourt in the coming months, before moving outside Nigeria where it would compete with well-established companies like Sun King and Zola Electric.


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Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.

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