Over the last 10 years startups in Africa’s off-grid solar sector have attracted over $2.3 billion in funding. However, the largest share of the financing has gone to just seven pay-as-you-go (pay-go) Africa-based scaleups, leaving hundreds of others in the early-stage struggling to fundraise, according to the newly released biennial Gogla-World Bank report.
The seven most funded solar startups are Sun King, Zola Electric, M-Kopa, Bboxx, d.light, Engie Energy Access and Lumos which, according to the Gogla Investment database, have attracted 72% of the sector’s equity, debt and grant financing while over 150 startups in the seed and startup phases accounted for the rest of the amount.
In terms of equity funding, the scaleups received investments worth $600 million between 2015 and last year, as early-stage startups attracted $255 million VC funding over the same period.
Overall, access to debt has not been easy for most early-stage startups in Africa especially since the COVIID pandemic hit, yet the scaleups continue to unlock more debt funding amidst a similar operating environment.
The aforementioned scaleups operate pay-go models that offer asset-based financing (pay-to-own) for solar kits and lanterns, products that are hugely popular in Sub-Saharan Africa where millions are off-grid, as national power grids remain underdeveloped.
The lack of capital means that the early-stage startups are not able to acquire assets lik …
