The following article by Climate Circle (previously Africa Funded) CEO Saskia Reus-Makkink builds on knowledge gained in managing a seed funding program related to innovative business model around water (smart water for agri, ICT/PAYG, safe drinking water, sanitation circular economy models), convening collaboration and portfolio deep dive study of 5 leading funders of safe water enterprises, assessing sanitation circular economy partners for Unilever, Kimberly Clark and other multinationals.
We use the illustration to explain development of pionering business models. On the left side starts with designing and pivoting business model based on market feedback, after a solid business model is found. Companies might tap into grant funding for these early stage but are not yet ready to scale. We provide support in getting ready to scale in designing scaling strategies, securing recurring large scale contracts, expanding senior management team, improvement of processes, etc.
Based our work in supporting funds and companies around the topic water, we made the following observations related to the maturity and profitability of diverse water related business models:
Rain water (also 3R: Recharge, Retention, Reuse) models have solid technology solutions, but the commercial part is still in development
IT/Mobile solutions: High impact possible in improving performance of all water business models by using mobile / IT solutions. Limited deal flow now, as most solutions server short term donor project needs.
Circular business models: We screened 24 of the leading companies for a consortium of multinationals aiming at identifying partners for sustainable sourcing of materials. Models include fecal sludge to biogas, fertilizer, flying foods, etc business models. They provide opportunity to reduce costs in the value chain. Most models are in advanced pilot stage
Smart Water for Agri: Only 6% of agri land in africa is irrigated. High potential. Early market adopters. Diverse activities in this space to support market development. Very promising.
Safe Water Enterprises: In rural areas often require blended finance, in high dense urban (slums) area can be profitable. We convened collaboration of likeminded funders in this business model, publication of a deep dive study and sharing of lessons learned can be found here.
HWTS: Household water treatment services (eg filters). No complex business models, more a volume game in selling and replacing the solutions. Collaboration with donors needed for large scale contracts.
The analysis shows Smart Water for Agri and ICT/Mobile have most potential for commercial scaling activities. Again, the analysis is work in progress and can be completed with further deep dives in the market. We welcome you to connect with us on our work in assessing and supporting companies in early growth stages in Africa.
Saskia Reus, CEO Climate Circle
Analysis based on: Managing seed accelerator programs for water & sanitation in 2014-2019 (A4A, UNESCO VIA Water, Smart Water for Agriculture Kenya). Managing deep dive study into 14 Safe Water Enterprises, Assess opportunity to scale 24 sanitation businesses (2016), market assessment IT/Mobile (2017), Investment Committee roles, water & sanitation expert feedback
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