Tokyo-based Digital Grid, developing a prepaid solar power delivery service to off-grid areas in rural Africa by networking kiosk vendors (or rather, perhaps better referred to as “jacks-of-all-trade”) named Wassha, last week announced that it has raised 300 million yen (about $2.89 million) in its s
eries B series A extension round from Japan International Cooperation Agency (JICA). Before that, the firm closed its A round of 800 million yen (about $7.71 million) with the participation of The University of Tokyo Edge Capital (UTEC), Development Bank of Japan (DBJ), Innovative Venture Fund (jointly run by NEC and Sumitomo Mitsui Banking Corp. group) and J-Power, and has secured 400 million yen (about $3.86 million) in its s eries B series A extension round while adding the funding this time, totaling at 1.2 billion yen (about $11.6 million) as a cumulative amount since its launch.
Updated on Nov. 8, 2019: Wassha told The Bridge that they positioned this as an series A extension round instead of a series B round. Some words were modified accordingly.
Started in 2013, Digital Grid spun off from a research on the power network innovation (digital grid) suggested by Professor Rikiya Abe at The University of Tokyo. It installs solar panels or battery chargers, then provides 30 LED lanterns, radios, tablets to kiosk operators; the kiosks rent these out to villagers and collect fees from them for charging power at the kiosks. The owners settle the electricity bills from smartphones and power charging boxes for the appliances, not to mention earning at each kiosk by charging money for use of mobile phones.
For JICA, leading Japan’s international cooperation efforts including Official Development Assistance (ODA) and Japan Overseas Cooperation Volunteers (JOCV), it is the first attempt to invest in projects targeting Sub-Sahara Africa (the region in Africa south of the Sahara) although it has invested in development funds in some cases for the Middle East or North Africa. The raised money was made from JICA’s Base of the Pyramid – Feasibility Study (BOP FS) scheme, and it is also the first investment case for the scheme in any business project (which is not limited to surveys).
According to Yuichiro Sano who is Chief Assistant of Public-Private Partnership Department of JICA and in charge of this investment, although JICA has to collect the fund in the end because it is not a grant but is funded by tax money, JICA decided to invest in Wassha as a growth capital because “provision of development efficacy” can be expected through business expansion in addition to its supports possibly reaching areas where yen loans / grants / conventional ODA cannot cover.
JICA has local offices in almost all of the 54 African countries and has been dispatching JOCV or senior overseas volunteer staffs there. Since it grasps the demand of local residents’ daily life, as well as building a strong network of governments and relevant ministries in the African countries, Digital Grid will be able to realize a smoother business scale by leveraging said network.
During the previous interview in June, Wassha was provided to 650 partner kiosks mainly in two cities including the largest city of Tanzania, Dar es Salaam; thereafter the number of partner kiosks increased to 820 as of late October. Currently Digital Grid develops the service in ten regions in Tanzania and covers three cities as bases for dispatching of technical staffs or the repairing item. Besides the power provision services, the firm plans to work with other startups in sales of their service or test marketing utilizing its partner kiosk network in the future.
JICA has an investment scheme targeting three sectors; infrastructure, Sustainable Development Goals (SDGs; development goals specified by United Nations), and climate change, so that it continues to consider active investments in social startups focusing on these growth-stage markets.
Translated by Taijiro Takeda
Edited by “Tex” Pomeroy