Clean Energy | April 12, 2018

BBOXX adds crowdfunding to its financing toolkit

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ImpactAlpha, April 12 – BBOXX, the UK-based pay-as-you-go solar company, has raised more than $60 million in debt and equity since launching in 2010 and is looking to raise $100 million more to reach its goal of delivering electricity to 20 million people by 2020.

A small part of that, the company hopes, will come from retail investors on a variety of crowdfunding platforms. Last month, the company quickly raised €1 million ($1.25 million) on TRINE, a Swedish crowdfunding platform. Now, BBOXX is seeking the £2.5 million ($3.6 million) in debt on Lendahand Ethex. UK aid will match 25% of the funds raised via Lendahand. The capital raised will be used to reach 2,500 households in Rwanda.

“We operate in a market where there’s more than one market failure, so we have to bridge many gaps,” BBOXX CEO Mansoor Hamayun told ImpactAlpha. “The ways BBOXX has to structure funding [to do that] requires equity for technology development, local equity, and debt.”

Worldwide, more than a billion people lack access to electricity. The crowdfunded capital is used to purchase solar systems, which BBOXX then sells on to its rural, off-grid customers—most of whom are in Africa—on a pay-as-you go basis. As customers repay BBOXX, it will repay its crowdfunded investors. The company expects to make 5% returns, and repay the Lendahand investors over three years.

“Crowdfunding [fills] a small proportion of our funding need, but it’s impactful because it attracts new demographics to the problem who otherwise wouldn’t know about it or know how to be part of the solution,” Hamayun said. BBOXX says it has installed 150,000 of its pay-as-you-go solar systems, serving more than 500,000 people.

All-of-the-above funding approach

BBOXX has taken an all-of-the-above approach to raising capital. Last October, it raised $5 million to support is Rwanda expansion plans. The company received an investment as part of Bamboo Capital Partners plan to raise $50 million for distributed energy services companies to catalyze additional debt and co-investments. BBOXX is partnering with Victron Energy and Orange in the Democratic Republic of Congo, and Orange is expanding its partnership with BBOXX in other African countries. In Togo, BBOXX is providing off-grid energy access as part of the government’s national electrification strategy.

Hamayun said crowdfunding allows BBOXX to educate people about opportunities to provide access to energy, and to attract a range of  investors, especially women. “One of the key goals is trying to make ourselves, as a business, as inclusive as possible,” he says.