Since 2013 the Mobile for Development (M4D) Utilities team has been supporting entrepreneurs leveraging mobile to improve and increase access to basic utility services. Although investment in this sector, particularly in pay-as-you-go solar, has increased exponentially in recent years, we have seen time and again that investment continues to be a challenge. Identifying the ‘right’ funders is one of the first issues entrepreneurs face in their investment journey.

At the same time, investors say the primary challenge in deploying capital is identifying interesting and good quality deals. They also encounter increasingly more organisations using mobile technology, which can bring opportunities but also risks. To facilitate conversations between funders and entrepreneurs, the M4D Utilities team has curated an Investor Roundtable Webinar Series.

On 15 September 2016, our M4D Utilities team hosted our inaugural webinar focusing on Foundations.

Presenters included:

• Erin Crossett, Portfolio Manager, USAID Development Innovation Ventures (DIV)
• Charlotte Ward, Director, A.H. Lundin Foundation
• Josephine Ragni, Social Investment Manager, Netri Foundation

Funders outlined their models giving background on their sector focus, investment size and structure and examples of investees. Although all three investors are fairly unique in their models, when asked about the top criteria they look for in investees, there was significant emphasis on the importance of ensuring a high quality management team, who have experience in their operating markets. Josephine from Netri highlighted the importance of communicating transparently with your investors, explaining that as long as the communication flow is open, investors can be very understanding and work with management to deal with challenges.

For both DIV and Lundin Foundation, high on the list of reasons for deals not materialising is a lack of understanding of the addressable market and value proposition. Researching and proving the demand in the targeted market is crucial for an investee to be considered as a scalable and profitable company.

All three funders have invested in organisations where mobile technology has played a critical role in making their business models viable, not least in the pay-as-you-go solar space, where solar products have become affordable and young companies can get enough demand for products to produce them at scale, thus ensuring their financial viability. Although mobile technology can be a fantastic tool, too much emphasis on the technology side can pose a risk. Charlotte explained that a central component of any B2C model must be the customer-centric design. She advises companies to ensure that the mobile technology side does not outweigh the execution of the business operations – achieved by having quality logistical and operational experience in a company, as well as just the technology experts, to build the service that is required.

Here’s the full recording:

You can download the full slides from the webinar here.

To find out more valuable insights from investors, watch the second webinar on impact funds and watch the third webinar on funding platforms with Lendahand and Kiva in our blog series.