Unlocking Africa
Terser Adamu, who is an Africa Business Strategist, International Trade Adviser, and Director at ETK Group, hosts the award-nominated Unlocking Africa Podcast. During each episode he shares his thoughts on how to unlock Africa’s economic potential in the 21st century. This is delivered through engaging and thought-provoking discussions with innovators, entrepreneurs, investors, policymakers, and business leaders who are unlocking Africa’s economic potential. Whether you're a business leader, an aspiring entrepreneur, have a comfortable side hustle, or want to take your business to the next level, each episode is jam-packed with information and insight that will enable you to take immediate action and implement key strategies to successfully launch and grow your business in Africa.
Unlocking Africa
Using Smart Technology to Make Electricity Cheaper, Cleaner and More Reliable for African Homes with Kailas Nair and Jon Kornik
Episode 185 with Kailas Nair, Chief Growth Officer and Co-founder, and Jon Kornik, Chief Executive Officer and Co-founder of Plentify, an award winning clean tech AI company transforming home energy management in Africa and beyond.
Kailas Nair and Jon Kornik bring a wealth of experience from global leaders such as McKinsey, Google, Tesla, and Vitality to this conversation on how artificial intelligence and innovative hardware can make electricity more affordable, reliable, and clean for African households. In this episode, they share how Plentify’s solutions, including the HotBot and SolarBot, help households shift energy consumption to cheaper and cleaner times, stabilise strained grids, and maximise the value of solar energy.
They discuss how a demand side focus, combined with user-centric design, is unlocking new opportunities for African utilities, communities, and consumers. From securing multi-million dollar deals and international funding to being recognised in the Bloomberg 50 Startups to Watch and shortlisted for the Earthshot Prize, Kailas and Jon reflect on the challenges and opportunities of scaling a climate tech business from South Africa to global markets.
What We Discuss With Kailas and Jon
- The personal and professional journeys that led them from global careers at Google, McKinsey, and Vitality back to South Africa to tackle the energy crisis.
- How Plentify’s AI-powered HotBot and SolarBot help households shift energy use to cheaper, cleaner times while stabilising strained electricity grids.
- Why focusing on the demand side of the energy equation can unlock new solutions for Africa’s affordability, reliability, and sustainability challenges.
- Lessons learned from scaling a South African climate tech startup into global markets and tailoring solutions for diverse African energy contexts.
- Strategies for building credibility and securing investment in Africa’s clean energy sector.
Verto Corner
In this week’s Verto Corner, Cornelius Coetzee, Verto’s Country Director for South Africa, shares his perspective on how smarter cross border payment strategies can give importers and exporters a real advantage.
He outlines the hidden “icebergs” in international trade such as changing regulations, levies and tariffs that can quickly erode profitability if not managed well.
Cornelius explains how improving payment processes is not only about reducing costs but also about building resilience, improving cash flow and strengthening competitiveness in fast changing markets.
Discover how our Verto's solutions can help you accept payments, manage expenses, and scale effortlessly.
Did you miss my previous episode where I discus Building a Borderless Economy: How Itana is Creating Africa’s First Digital Special Economic Zone? Make sure to check it out!
Connect with Terser:
LinkedIn - Terser Adamu
Instagram - unlockingafrica
Twitter (X) - @TerserAdamu
Connect with Kailas and Jon:
LinkedIn - Kailas Nair and Jon Kornik
Twitter - @plentifyHQ
Do you want to do business in Africa? Explore the vast business opportunities in African markets and increase your success with ETK Group.
Connect with us at www.etkgroup.co.uk or reach out via email at info@etkgroup.co.uk
You're listening to the Unlocking Africa podcast.
SPEAKER_04:I've been doing this for about eight years now. We started the company back in January of 2017. But my background is all at the intersection of energy, technology and finance in Africa. I
SPEAKER_03:started out in management consulting for McKinsey for about six years, mostly helping multinational companies figure out how to grow across sub-Saharan Africa.
SPEAKER_04:The first product that we launched with was a product where we were helping South African homes to upgrade from electric to solar water These bots are not
SPEAKER_03:designed to deliver value to individual homes, certainly, but they can also be networked together to provide benefits upstream and electricity value chain.
SPEAKER_00:Stay tuned as we bring you inspiring people who are unlocking Africa's economic potential. You're listening to the Unlocking Africa podcast with your host, Tessa Adamu.
SPEAKER_02:Welcome to the Unlocking Africa podcast, where we find inspirational people who are doing inspirational things to unlock Africa's economic potential. Today, we have Kayla Sneer, who is co-founder and chief growth officer at Plentify Africa. and John Cornick, co-founder and CEO of Plentify. Plentify is a pioneering home energy management company based in South Africa and the United States, specializing in innovative technologies that connect home appliances to cheaper, cleaner energy. Welcome to the podcast, Kalis and John. How are you?
SPEAKER_03:We're great. It's nice to be here, Tessa. And thanks for having us. It's a great pleasure. Thank you, Tessa.
SPEAKER_02:Fantastic. It's a pleasure to have you on the podcast. As always, I like to get straight in. So I was hoping you could give us a brief introduction into who John and Kalis are. Cool.
SPEAKER_04:So I'm John Cornick. I'm the co-founder, along with Kalis, and the CEO of Plentify. I've been doing this for about eight years now. We started the company back in January of 2017. Actually, now that I calculate, it's closer to nine years. But my Background is all at the intersection of energy, technology and finance in Africa. Prior to Plantify, I worked for Google, running the African energy business, which involved building and financing big wind and solar farms and developing technologies to expand access to electricity across the continent. Before that, I worked in carbon finance, helping build a carbon finance firm across Africa. And before that, a variety of roles in the energy and sustainability space.
SPEAKER_03:Yeah, my name is Keyles. I'm the other half of the co-founder duo. I started out in management consulting for McKinsey for about six years based out of Janisville office, mostly helping multinational companies figure out how to grow across sub-Saharan Africa. After that, I moved over to Discovery, a financial services firm headquarters in Joburg, initially leading the international strategy and investor relations functions, and then subsequently moving over to the United States and heading up their vitality insurtech business based out of New York. And after that, I left to join John at Plentify. And I've been at this almost six years now. In a week's time, it'll be exactly six years.
SPEAKER_02:Brilliant. You've given us great insights into your professional background. But I was wondering, what was it specifically that inspired you both to return to South Africa and co-found Plentify, especially after very successful international careers at companies such as Google and Vitality? I think we've probably each got
SPEAKER_04:our own stories here. For me personally, I left South Africa in my mid-20s to go to the US, largely to go to grad school and study there. And it was always my intention, though, to use this opportunity to accrue skills in the US and come back and deploy them for the benefit of Africa. I was actually planning to always come back immediately after graduating, but I got an amazing opportunity to join Google's energy team and so spent about five and a half years doing that. And once I felt like I'd learned enough and was positioned to have an impact in Africa, I moved back to fulfill my life's plan.
SPEAKER_03:Yeah, as John mentioned, I think we both had different journeys to get to this point. Mine, I would say, was more of an accident of fate. So I was working for Discovery Vitality based out of the US and really just woke up one day wondering what the next 30 years of my life would look like if I stayed where I was. And although I was having... lot of fun and it felt like i was doing good work something told me that um i needed a change and a new challenge and i had a serendipitous coffee chat with with john who i had known at that point for almost 20 years and he described how he was starting a company from the ground up based out of cape town and um for reasons that are still unknown to me asked me to join him as a co-founder And it might have been the timing of that conversation, the fact that I was doing some soul searching at the time, that all of a sudden this seemed like the right next step. I was drawn to the idea of building a business from the ground up, from sort of first principles approach, doing some meaningful work, which Pentify is certainly doing, doing it with a person that I'd known for a long time and trusted deeply, which is important when you're leaping into the unknown. And also returning back to South Africa, which is a country that's given me a lot of of my lifetime and I felt like it was a good way to give back. And so after that serendipitous coffee chat, I found myself walking into my boss's office the very next day and tumbling in my resignation. And six months later, I was on a plane back from New York to Cape Town to start my Plentify journey.
SPEAKER_02:Amazing. So it's clear that you both had different journeys that have brought you to the same point. But what problem specifically were you trying to solve with Plentify? That's a
SPEAKER_04:great question. Personally, I've spent my career focused on trying to fight climate change. I've worked in consulting, I've worked in carbon finance, I've worked in renewable energy development, and I'm most recently at Plantify. It's always been... what's driven me it's been my passion that has got me out of bed in the morning and kept me excited about what I'm doing but I think it was my tenure at Google that really kind of crystallized the opportunity because what I found at Google focused on on energy in Africa was that most renewable energy activity on the continent was in one of two areas it was getting big renewable energy projects onto the grid and getting people who are not connected to the energy system access to tiny standalone systems to get them energy your access for the first time but very little was being done for the majority of Africa's population that was already connected to a grid system, but suffering the world's most expensive unreliable electricity. And it was really this problem that captured me. And it was, you know, the work we'd been doing at Google in terms of technology development and the partners we'd been working with in the market that had come up with really novel ways, novel business models of promoting distributed renewable energy made me believe that the same technology and business model lessons could be applied to this different segment. the grid-connected population in Africa. And that was kind of the genesis of Plentify, starting focusing on grid-connected households in South Africa and helping them to shift their consumption more towards renewables.
SPEAKER_02:Thank you for sharing that, John. So how did you know you had the right solution? Was there a specific point or did something happen where you kind of thought this is the eureka moment?
SPEAKER_04:That's a great question. I'd love to hear Keyless's response to this one as well. We pivoted a few times over our lifetime. When we started this business, the first product that we launched with was a product where we were helping South African homes to upgrade from electric to solar water heating and paying for the cost of that upgrade and taking a share of their savings in return in order to recover our investment. And we thought we had it back then, to be honest. We were converting 15% of customers with a single phone call. We had great partners through which we had strong distribution channels. And to this day, actually, seven, eight years later, We still haven't had a single default on that product. However, it was also around the time of day zero in Cape Town. This was the time where Cape Town came dangerously close to running out of water. And it really changed the behavior of people living in the city. What we found is that pretty much overnight, our users' hot water consumption dropped something like 60%. And with that, because we were essentially selling hot water as a service, our revenue dropped 60% as well. And so that was a pretty scary moment when we realized that this thing that we believed had legs and was going to be a viable future business clearly wasn't going to work in drought-afflicted environments. And if you think about climate change and the patterns of changing climate and the fact that we are a company that is explicitly going out there to try to tackle this, it seemed like a Thank you very much. to solar thermal, we realized that the bigger problem was timing when electricity was used to take advantage of clean, cheaper sources that were already there. Even that, it took several years before I think we gained the conviction to know that this was really the right answer. And that signal only really came to the market, I think, as it does with startups when we reached the point where our primary problem stopped being how do we sell enough to how do we fulfill all the sales that we've already made? And that was a really fun and kind of scary transition when it happened to our business, but one that definitely signaled the market will be building. Okay, Alice, would you like to add to that?
SPEAKER_03:Yeah, I had some perspectives. I'd say I looked at it through the lens of a more fundamental analysis, which was, if you think about what's going on in the energy sector, that you have historically tried to address the mismatch between supply and demand by focusing on the supply side. You try to build more power plants. We are trying to build fast ramping power plants to cater for peaks. And what we've seen happen is that, number one, this is expensive. Building power plants is costly. And number two, it takes a long time, which means you can't respond quickly to increased urbanization, increased electrification and other demands that populations and businesses are placing on the grid. And the combination of these factors mean that electricity, inevitably becomes more costly and more unreliable. And what I liked about the Plentify approach was that it didn't focus on the supply side and it focused on the demand side. And they asked more basic questions, which is, what if you could shift demand to when there's cleaner, cheaper energy available? And I thought that was a really unique and interesting concept. And if you could do it at scale, you could build more stable, cleaner energy cheaper energy systems, which is something that we all need and want. And I guess I was inspired partly by my experience at Vitality. Vitality tried to do something or is doing something similar in healthcare. So if you think about healthcare systems in South Africa, but also in other markets, you are faced with a number of problems. Number one, the disease burden is quite high in South Africa. It's four times higher than the U.S., due to the prevalence of chronic and non-communicable diseases. But also there's a massive doctor shortage. So it's really difficult to build a stable healthcare system because of these constraints. And what Vitality tried to do was focus on the demand side, make people healthier. So you could reduce the burden on the healthcare system and reduce healthcare claims. So really the parallels between these two very different industries and these two very different companies was the common thread here. And I thought that I like the idea of taking a very novel approach to solving a fundamental problem. And I was drawn to that from the outset. I'll say this, though, that I don't think we can ever rest on our laurels and say that we have found the right solution. Markets change. Our customer needs change. And we've seen this over time at Plentify. So we're constantly having to innovate and refine and adapt to ensure that our solution remains relevant as factors change around us.
SPEAKER_02:Thank you for sharing that. You touched on this in terms of Africa's energy issues are often seen as a supply issue, but Plentify focuses on the demand side and why this approach matters in the African context. But with load shedding still being a persistent issue in South Africa, how does Plentify's technology help everyday households navigate this unreliable electricity supply? Yeah, it's a great question. So I
SPEAKER_04:think there's two ways to look at this. The one is how we directly help households cope with this unreliable supply. And the second is how collectively all of our users together fight the unreliable supply in the first place and help make it more reliable. So on the first point of helping users cope with unreliable supply, our technology is smart enough to predict and adapt. So for example, if you've got our products on your solar system and on your water heater, it will automatically understand when the next outage is. It'll make sure your battery is charged in time. It'll make sure your water is heated in advance of that outage if you need hot water during the outage. And when there's no outages, it'll continue to optimize those assets to make sure that you charge in your battery and you heat in your water with the cheapest, cleanest power available so that you see meaningful reductions in your bill. And so as an end user, you get protected from the unreliable supply by having your home energy assets operate around it. And you see a meaningful reduction in your bill at the end of the month by consuming less electricity through efficiency and the electricity that you do consume, consuming it at cheaper, cleaner times. And so that's great, and it's the benefits that the households accrue directly. But really, I think the real magic in what Plantify does is how we network all of these different homes together to provide benefits to the system overall. And this comes down to the point of why focus on the demand side at all, as opposed to the supply side. I find what's quite useful to explain this is an analogy that many people can understand, which is the road network. If you think about driving to work in the morning, you're coming in on a highway at 8am in the morning or 7am in the morning, whatever time it is, and the highway is back to back and it's packed and it takes you much longer to get to work than it needs to. However, 1pm in the afternoon, that same highway is practically empty and the cars are flowing freely. And so if you look at that highway, on average, over the course of the day, the highway is big enough. But it is at certain times of the day, particularly during the peak times, where there's simply not enough capacity on the highway to allow cars to move smoothly. You could solve this on the supply side by building more lanes on that highway. And sure, you will solve that problem during peak times, but you're just again going to leave so much more latent capacity available at all other times of the day. So what happens if you could take a different approach and you could actually change demand? For example, what happens if you could get people to drive to work at different times so that you stagger the cars on that highway over the course of the day so that existing highway you've got is now sufficient to get everyone where they need to get to as quickly as possible? Obviously, with the road network, that's not completely feasible because people can't willy-nilly change the time that they start work. But in the electricity system, you can do that because you can change when your appliances use electricity such that you don't actually notice any change in service delivery, but its electricity consumption has been shifted to a time where there is more available without the need for additional supply. And so, I mean, another way we like to think about it at Plantify is we're hoping to usher in the age of abundance. There's All this latent capacity in our electricity systems, which if utilized correctly, can provide so many more services to people out there. And as a result, because you better utilize that network, those services will become incrementally cheaper and cheaper for everyone.
SPEAKER_02:You've broken down the timing problem of Africa's abundance of solar energy and the mismatched peak usage. But how is Plentify helping households without access to high-end solar systems or backup batteries to still benefit from this?
SPEAKER_03:So that's a great question. And obviously, given our base in Africa, we are cognizant of the fact that You know, what we're building needs to benefit everybody, not just a select few. And I think it touches on what John mentioned in that our technology is not just designed to help users, but also help utilities that are supplying electricity for everybody. So currently the problem that utilities face is that whoever can afford it will typically defect to solar. And typically the ones that can afford it are also the ones that consume the most energy. So utilities are losing their most valuable and highest consuming consumers to alternative sources of energy. This means they're left serving a smaller population. And the only way for them to adapt to this is by increasing prices, which then in turn causes more people to defect. And this results in something called the utility debt spiral. And we've seen this manifest in many markets, not just in Africa, but elsewhere as well. Planetify hopes to reverse that trend. Our technology is designed to balance the needs of both users and utilities. And so on the utility side, what we are hoping to do is shift energy demand at scale away from more expensive generation sources to cheaper energy sources, which means that utilities can then serve their customers more cheaply. They can defer expensive network upgrades. which take time and cost a lot of capital. And ultimately, hopefully through those mechanisms, they can continue to serve the vast millions of African consumers who are going to remain connected to this grid for a very long time.
SPEAKER_04:Well said, Gailis. I had a little bit of an anecdote there as well that's maybe a little bit provocative. In fact, I'll start with the provocative statement and go from there. The larger, wealthier consumers on electricity grids are inadvertently destroying the grid for everyone. And we can help them fix that and actually turn them from a problem for the grid into a great advantage for the grid. So let me give you an example that's very real in the South African context. We've been suffering from intermittent blackouts, which is known as load shedding down here. And this has been going on for several years. It's been better in the last year or so. But in 2023, in particular, it was very bad. And so a lot of people, at least those people who could afford it, invested in solar and battery systems for their homes in order to see themselves through these periods of outages. And that's all well and good and it was great. It took a load off the system when it mattered and these solar systems contributed energy back into the network as well, which obviously helped the energy security situation. However, the way that the majority of these batteries have been set up is that as soon as the power comes back on after an outage, they charge up. And the implication of this is that, say that there's a rolling blackout in your suburb, as soon as that blackout ends, everybody's batteries in that suburb start recharging simultaneously at the same time as the next suburb goes off. The impact of that is you have these gigantic spikes in demand, which are now new spikes created by recharging batteries that happens at the end of outages, which has two effects. Number one, it counteracts the benefit of load shedding the next suburb. And number two, those spikes are so big that they can damage infrastructure. And particularly in municipalities with weaker grids, like in the northern the country, this has led to transformers and substations breaking, which ultimately leads to a lack of reliability for everyone connected to that node of the network. And so one of the things that we do by targeting these households is we ensure that they not just recharge their batteries in a way that is not detrimental to the grid, but is in fact beneficial to the grid by charging it at the best possible times so the utility has the most capacity possible to serve everyone connected to the network. And I think that this is by far the way we can have the greatest impact. It's by managing the most load possible for the benefit of the households and the utility. But I do also hope that one day we can bring our technology to lower income households and help them particularly gain from the efficiency benefits that our technology brings.
SPEAKER_02:So with this in mind, I know you've just touched on this. Could you kind of walk us through how your bots and other innovations that you use work across multiple homes to stabilize the grid, not just for individuals, but also for the entire community? The
SPEAKER_03:key departure point here is that these bots are not designed to deliver value to individual homes, certainly, but they can also be networked together to provide benefits upstream in the electricity value chain. So for example, if you're living in an apartment building, we can connect all of these appliances together to provide value to the property developer or the solar developer on site. Taking that one step further, if you're in a neighborhood or a community or a municipality, similarly, we can harness all of the demand from these appliances to shape and shift the demand curve in a way that benefits the utility or the municipality. So I'll give you a few case examples. In South Africa, one of our largest partners is Baldwin. They're the largest residential property developer in the country. And they have upwards of 15 apartments and estates scattered around the country. And they're installing solar across all of these apartments and estates with the intention of providing their customers cheaper, cleaner energy. It's a noble cause, but it's one where Plentify plays a very meaningful role. So what we do for Baldwin, is that we install our hot pots on every single one of the electric eases on these estates. And we shift the energy demand away from expensive peak times to cheaper cleaner times because they're on something called time of use tariffs where they pay more for electricity during certain times of the day than others. We also coordinate these water heaters to bring down demand spikes. And these demand spikes can turn out to be quite punitive because the municipality charges penalties if the demand exceeds a certain threshold. And typically, water heaters are the primary driver of these demand spikes because they all tend to come on at the same time in the mornings and evenings when people are either going to work or coming back. But the biggest benefit ultimately is shifting energy consumption away from grid to ironwood solar. And we're making sure that the install on these sites is utilized to its maximum capacity. And so the combination of all of these factors mean that Poland can serve their residents cheaper cleaning energy. We've run a similar project in partnership with municipalities in South Africa. For example, a few years ago, we ran a pilot study with the city of Cape Town, which is one of the largest distributors of electricity in South Africa. And we demonstrated that our tech can shift energy demand away from peak times to off-peak and standard times, similar to The Baldwin case, the city of Cape Town purchases electricity and time of use tariffs from ESCOM, the national utility. We gave them an alternative to load shedding so they no longer had to shed load to the entire home when the grid was under strain, that they could shed load on specific appliances, specifically electric water heaters, thereby improving service delivery for their customers. And then also we set them up for a solar future as more and more municipalities consider purchasing directly from IPPs, independent power producers. It'll become important for them to align energy consumption of their constituents with when solar energy is going to become abundant. So we can improve the economics of a solar purchase for municipalities.
SPEAKER_02:Welcome to Verto Corner, powered by Verto. Today, we're looking at the hidden risks in cross-border trade and how better payment strategies can protect profit. Here's Cornelius Kutsia, South Africa Country Director at Virto, with a view from the front lines. Cornelius, it's over to you.
SPEAKER_01:Thank you so much for having me. I think we need to start off with the significant challenges the global markets are currently facing from an import and export perspective. Considering the most recent Trump administration's imposition of tariffs that came in, especially in developing markets such as South Africa, we really feel the knock on effect of these tariffs. And it's largely at fault for markets that are in a developing nature because we continuously try to focus on dealing with G3 currencies. I the European Union, United Kingdom and the US. For importers and exporters, especially in South Africa, many of the most significant costs and risks associated with payments are hidden beneath the surface, very much like an iceberg. And navigating this is critical to protecting our profitability. So usually what we tend to look at is the extreme volatility of FX, especially across the African continent. We do see that markets such as South Africa, Kenya, Nigeria, even Egypt, which is the top four economies in the African continent, have extremely volatile currency that's susceptible to social economic changes. So essentially that creates a high level of doubt and uncertainty in the market. And naturally that touches the volatility of the currency itself, making trade virtually impossible or extremely difficult to say the least. A focus around what these fees actually mean and what these tariffs that have been the talk of the town for the last few weeks is that all of a sudden businesses are now looking towards other cost factors that were previously seen as sound costs. So when we look at hidden fees like corresponding banking fees or SWIFT fees, businesses usually would have expected that to be a sunk cost and a known cost and really didn't pay much attention to it. And I've previously spoken to a very large exporter in South Africa in the agricultural industry. They essentially pay about a million dollars in SWIFT fees, which they've always built into their margins. But now with the tariffs coming in, especially on citrus exports, these type of costs needs to be accounted for in some way, shape or form. And dialogue with the banks are extremely difficult because even the banks need to start thinking about how are they going to secure flows, but at the same time also secure their ability to offer decent rates to their clients. And businesses are, especially in imports and exports, are looking at ways in which they can sort of find a more seamless and efficient way of covering unexpected costs, but at the same time also trying to see how they can reduce the standing hidden costs that's in the business and currently having a direct impact on their bottom line performance. That is where we're starting to see the markets moving into a direction where we need to focus on how do we create sustainable growth, protecting our GDP, but at the same time also making sure that there is a continuous flow of goods and services between markets that's going to benefit us in the long run.
SPEAKER_02:Thank you for that great insight. One question before you go. If you had to recommend just one strategic payment change for exporters, what would it be? Well, I think
SPEAKER_01:from a personal and from a voter perspective, I think we've often looked at trade being a, let's say from an essay context, again, South African ran to US dollar trade. We haven't really seen businesses in markets going above and beyond and looking for payment technology firms that can actually offer them a wide array of currencies to expand their ability to collect, hold, convert, and pay out funds back into South Africa. So let's think about a use case for a fruit and veg exporter who currently would have to collect funds in euros and bring those funds back into South Africa. They don't know what the rate is going to be. There can be delay in payment because of regulatory exchanges. But if they were to have exposed themselves to a payment technology firm such as Virto, we would have been able to offer them a locally domiciled euro account. And what that actually means is that you get paid like a local from your distributors in the European Union. Those funds do not attract any SWIFT fees, no additional costs. And you can at any point in time bring that funds back into South Africa, whether the delay on your end would be to wait for a more favorable exchange rate or just for ease of access to other markets. Having those markets available to us and having currency capability in those markets, it already opens you up to the entire East African bloc. The only thing you need to do is get your product there. We allow you to collect in local currency. We allow you to convert those currencies back into your said home currency and streamline your global payment. So I think the main call out for me would be for importers and exporters is to seek out companies that has got a very strong reputation and licensing capability across the African continent and on a global scale, especially companies like Virto, who has close to 30 banking partnership, who holds close to seven licenses and essentially be able to unlock your trade and growth barriers to really create a sustainable business model for you in the long run.
SPEAKER_02:Thanks to Cornelius Kutsia for those great pieces of insight. We'll be back next week on Virto. corner. And now back to our interview. Due to the success you've had so far, you've been able to expand from South Africa into international markets. What lessons would you say you've learned about scaling a African startup globally?
SPEAKER_03:So firstly, it's not for the faint-hearted. Scaling any sort of business in any market is challenging, especially if you're doing this from the ground up. But I think there are unique advantages to for having our base in Africa. And those are the ones that we like to lean into. So firstly, if you think about the energy system in South Africa, it is undergoing an incredible transformation. So firstly, we've obviously had the scourge of load shedding and blackouts, and that creates all these shocks on the supply side that businesses and individuals have had to respond to. There's tariffs have been increasing at double-digit rates for over 15 years and places pressure on both lives and livelihoods. And there's a massive energy transition underway. There's lots of renewable energy coming onto the grid, which is by and large a great thing, but because of the intermittent nature, it places strain on our already fragile grids. So you've got this unique laboratory where There's incredible forces being placed on this energy system and it sets us up to build a technology that can respond to these factors. And what we've noticed is we've built something quite unique and resilient and it becomes very, very relevant in other markets as well. Maybe not all the features that we've built are going to be applicable in every market, but almost every feature that we've built is relevant somewhere else. So, for example, in Australia, they are experiencing a solar boom, nearly one in One in three households have solar today, adding batteries. And we've got unique experience from South Africa that we can bring to that market. The scourge of blackouts is not unique to South Africa. We recently saw a massive outage that happened in Spain and Portugal. And I think our experience in South Africa will be incredibly relevant as we expand into that market. So I'd say this number one market conditions in Africa are and building a technology that caters for that. makes us uniquely relevant in other markets as well. Necessity being the mother of invention, as the saying goes.
SPEAKER_02:Yes.
SPEAKER_03:Secondly, in designing for an emerging market like South Africa, you have to design for cost. And our engineering team is particularly skilled in this area. For example, our hardware director built IoT products that have been deployed in tens of thousands of African homes. We built low-cost fire detection systems for informal settlements. And of course, when you're building technology like that, you have to build it at a very competitive price point. And he's brought all of that experience into Plentify and helped design our product against a very competitive price point. And what we've seen is on a like-for-like basis, our tech provides way more features at a far lower cost compared to our international competitors. It's often the most surprising thing that international customers find out about our product is how price competitive it is compared to the alternatives. And then lastly... I'd say this is some of our unexpected benefits, is that South Africa is quite uniquely situated for a remote-first working environment. I mean, it's obviously, geographically, it's quite far. It's at the tip of Africa. It'll take forever to fly from there to any of the markets that we're looking to serve. But in a remote-first environment, geographic distance doesn't matter as much. It's time zones. And it has... Incredible overlap with both the West and the East. So I remember during COVID, when we were all working from home in SA, we were able to secure meetings with folks in America and China because it was remote first and distances didn't matter as much, which we've never been able to do otherwise. So unexpected benefit there is just how much overlap we have across the world in terms of time zones.
SPEAKER_04:That's very well said, Kay. If I can maybe just add a couple of thoughts to that. I completely agree. There's this combination of a more powerful product that we've developed thanks to the opportunities that the market has presented us in South Africa, as well as a lower cost product. And Kay has touched on partly that's due to the fact that we've built a team that are experts in low cost design. But it's also due to the fact that this is where we've been strategically investing our R&D dollars to try to reduce cost further. As an example, there's a one cent Thank you very much. And we continue to do that. We'll be constantly replacing effectively hardware with software, which is much cheaper, but it is enabled by the billions of measurements that we've collected over the last several years. So that's definitely a big part of our cost advantage. And I'd say that one final part is the architecture of our solution as well. We believe that we've architected something that really is fit for purpose in the energy future, much more so than some of the competing products out there, such that compared to some of our competitors, we are literally more than 100 times cheaper and provide better performance given the architecture. So this really does set us up very well for success in international markets.
SPEAKER_02:You touched on your experience and the advantages that brings when innovating in the climate and energy sector internationally. Looking at Africa, how do you tailor your solutions for other African markets that may have different infrastructure challenges than those in South Africa?
SPEAKER_04:Cool. So, I mean, maybe just take it back to our mission for a second. Our mission is to enable your cities to deliver affordable, reliable and clean power and ultimately be doing this in order to not just try that social benefit, but also to try to tackle climate change. And we're very much focused on this. And so as we develop our internationalization strategy, the premise underlying this is we want to have the greatest impact possible on our mission. We want to have the greatest impact possible on mitigating climate change. That means that we need to focus on those markets where our technology is most scalable. Where our technology is most scalable is where number one, there are large or fast growing solar markets. Number two, there are a large base of heavy load appliances and homes, which we can shift. And number three, there are no solar subsidies or solar subsidies are going away because we hope solar stand on its own two feet. And while many African countries meet those criteria, particularly criterias number one and three, with fast growing solar markets and very little incentives to deploy it, very few African markets outside of South Africa meet the need for this large base of heavy load appliances that are shiftable. And so as As a result, most of our international expansion ambitions are focused on more advanced or more developed markets like the UK, like Portugal, like Australia, and even places like Brazil, where we believe that we can just move the needle more. That said, we're talking to a whole bunch of partners in various African countries, and there seems to, particularly from West Africa, be significant interest in what we're building, but with different use cases. In South Africa, the biggest load in the home is the water heater. It typically accounts for between 40% and 60% of your electricity bill. Whereas in West Africa, this is less relevant. And things like space cooling is much more relevant in terms of the load that needs to be shifted. And so as we enter these new markets, we're going to obviously have to think about our integration roadmaps and what we need to build in order to offer the most attractive services possible.
SPEAKER_02:In order to internationalize, it requires capital. I know you've raised significant funding and secured huge deals. What's your strategy for building credibility and also attracting investors in Africa's climate tech space?
SPEAKER_04:Yeah, so we've been at this for, as we mentioned earlier, over eight years now. And over the time, we've raised several rounds of capital. We've been fortunate to be backed both by African investors as well as global investors, about half our capitals from Africa and about half our capitals from Europe and North America. We've got Canadian investors in there as well. I think what's really attracted particularly the international investors towards us has been the strength of the team that we've built. It really is a world-class team that has proven itself through the quality of products that's delivered and the traction that we've achieved in the market. And it's that combination of great team on paper and a track record that actually backs it up that I think has drawn most of our international investors towards us. That said, it hasn't been easy. I mean, particularly in the early years, the combination of energy, hardware, and Africa were basically three dirty words for many investors. But fortunately, over the last eight years, the market has also evolved. I think there's been a growing realization that hardware is a necessary ingredient in the energy transition. And so more and more investors have become familiar and comfortable with hardware. Energy has become, also with the kind of rise of climate tech in popularity, has become a sector that more investors are becoming comfortable with. And Africa, I think that remains a little bit of an open question. But fortunately, there have been several investors whose mandates have either focused on Africa or expanded to include Africa. And we've taken advantage of that. That said, I think it's the combination of both local and international investors that is critically important as well. The local investors to... provide the credibility that people who deeply understand the market back this solution, and international for people who understand the global opportunity to validate that this is actually a business which has the potential to scale internationally.
SPEAKER_02:You highlighted that the strength of your team is key. So what advice would you give to African entrepreneurs looking to work in the clean energy sector?
SPEAKER_04:lean into the strengths that the market provides, for one. I think to Kaelas' earlier point about how the market environment in South Africa, from the outset, might look chaotic and disruptive, but actually it's been one of the best things for us because the plethora of problems in the energy system and the speed of the energy transition has created immense amounts of opportunity for us, not just in kind of driving business development, but also just in learning what is likely to happen in other places in the world. So I think that's definitely one lesson that's It's taken us some time to learn that this is actually an advantage rather than a disadvantage. One of our advantages on the cost side is that we've built this world-class engineering team But because the cost of living in South Africa is so much cheaper than places like Silicon Valley, our engineering bill is a fraction of that of our Silicon Valley competitors. And as a result, with a similar amount of funding, we can hire more people and move much faster. And I think that's another kind of structural advantage that other African entrepreneurs should be aware of. But it takes a lot of effort to build this high-performing team, but it's totally worth it once you pull it off. Kay, anything
SPEAKER_03:else from you? A healthy degree of optimism is critical. There's a story, I don't know if it's true or not, but it's definitely one that comes to mind. There's a story of a shoe company that was looking to expand into Africa. And they sent two scouts to do some research into the market potential for shoes in Africa. The first scout went to Africa and visited a bunch of countries and wrote back, said, there's no market here, no one wears shoes. This was obviously many years ago. The second person wrote back and they said, oh my God, there's massive potential here. No one wears shoes. And I think that's the way I would encourage entrepreneurs to look at this, is that there's incredible opportunity that exists. And I believe the solutions that are going to be built for the African context will become globally relevant. A good analogy there is cell phones. So if you think back to the fixed line telephone era, this infrastructure, this technology had obviously penetrated Western and more developed markets and Africa was relatively under-penetrated. But because of that under-penetration, that cell phone technology became so prevalent. In fact, I think I read somewhere that mobile penetration in Africa exceeds 100%, which is clearly a function of the fact that this technology was incredibly relevant and it leapfrogged the need for fixed line telephony. And I think there's similar examples exist in fintech. There's a reason why there are so many fintech businesses that are formed in Africa and then go on to become global unicorns. And I hope one day that we'll see many more innovations come out of Africa that claim their rightful place on the global stage.
SPEAKER_04:It's well said, Keir. Maybe if I can add one more point to that as well. Looking at Plentify's experience, despite the fact that we've got the strong team, it was three years before we raised our first commercial capital. I think that the bar... particularly for international capital is much higher for African entrepreneurs than it is for others. But fortunately, that's not all doom and gloom because there is also a vibrant ecosystem of grants that can support high potential entrepreneurs in the early years. And it's these types of grants that have really, that really helped us to get to where we are. Organizations in our case, like Echoing Green, like the Tamer Fund for Social Ventures, like the African Entrepreneurship Awards, these competitions and these fellowships provided us with the capital we need to build enough of a proof of concept in order to attract that commercial capital. And I guess I'd encourage other African entrepreneurs to be aware of these opportunities. There's tons of newsletters out there. It's worth doing the research to build a pipeline of these grant opportunities. And then not only does it give you the potential to potentially get some non-dilutive funding, but it's actually... amazing practice at telling your story because each of these grant applications require you to answer a number of questions, each in a slightly different way, and it challenges you to really hone what it is that you're trying to sell, be that to funders or to the market. And that's definitely something I would do again if we started over. I
SPEAKER_02:like what you mentioned about focusing on the untapped opportunity. So do you see opportunity for Plentify's technology to be applied in... informal settlements, schools, or small businesses across the continent?
SPEAKER_04:Fundamentally, what we're doing is solving this mismatch between electricity supply and electricity demand. This is a problem that exists in every segment of every country. Within residential, absolutely, it occurs in formal housing and informal housing. It happens in businesses. It happens in industry. And so the fundamental technology we're developing absolutely has applicability in those areas. The questions for us as Plentify are whether it's the right segment for us. So business, for example, businesses typically use very different appliances. They have different loads to homes. And so in order for us to serve businesses and homes effectively, we'd have to integrate a whole different set of appliances and really understand a different segment very differently in order to serve them effectively. So that's partly why we've shied away from business. And we want us to keep our focus on residential and really deeply understand that segment of the market and the appliances connected. Within informal housing, I think there's a clear opportunity for a company like Plantify because as particularly as solar and batteries get cheaper and become more viable in these environments, it's going to be critically important to manage these systems effectively in order for people to not rely on the grid. And in fact, to help these informal settlements transform from consumers to prosumers of electricity. And I think this is something that could be really exciting that These informal homes that have a latent asset, they have space on their rooftops, and that space is probably bigger than their own household demand. It means that if we can get systems into these homes, we can not only bring their electricity down to effectively free, but hopefully create an additional revenue stream from them if that energy is managed effectively.
SPEAKER_02:So if we move from current opportunities and look to the future now, Where do you see Plantify in five to 10 years time? What's your vision for the company?
SPEAKER_03:So five to 10 years is a long time in startup land, but we certainly do take our heads out of the day to day and dream about what the future could look like. I think for us at Plantify, ultimately it's the pursuit of our mission. We want to enable clean and cheap energy for millions of people. So what that means practically is we'd like to connect up to a million appliances in five years time. And that involves not just increasing the number of water heaters and batteries that we connect, but also expanding our product to control other loads as well. Secondly, we see major opportunity in South Africa, our home market. The potential there is immense. And given the factors that I've touched on before, increased amount of renewables, the adoption of rooftop solar, The continued pressure on electricity tariffs, I think, will make our technology even more relevant into the future. But I think the cornerstone of our five-year ambition is expanding into international markets. And this isn't just a commercial cause. It's really because we believe that what we're building here is relevant, it's necessary, and it's a critical piece of the energy transition. And we hope to turn that into a reality in the next year or two.
SPEAKER_02:So if we zoom out and look at the wider space ecosystem, where do you see Africa's clean energy space in five to 10 years time? That's an interesting question. So I
SPEAKER_04:think that Africa has some distinct advantages in the clean energy space. And this is actually something we used to speak about often at Google, that wouldn't it be awesome if you could go somewhere and build the perfect electricity system from the bottom up? Instead of trying to work with an existing infrastructure and change it to something that is more future-proof. And I think that the weakness of many African grids creates an opportunity to leapfrog to what the future setup will be. And so I expect in the next five to 10 years, a lot of the pieces to kind of be moving into place. And that will involve a rise in distributed energy. I expect that particularly the private sector will probably drive further acceleration of growth in rooftop solar in particular, as well as captive solar systems connected to industrial facilities. And so you'll have a situation where much less of the power will come from central power plants and much more from the edge of the network. I think that as that happens and as more of these assets get deployed at the edge of the network and there's more and more latent capacity at the edge of the network where those consumers cannot consume that power on its own, it'll become more and more critical to start to network these distributed assets together for the benefit of the system. And so I think the second kind of evolution I expect is the rise of virtual power plants or VPPs or aggregators effectively who take the initiative to connect all these distributed assets together using software, combine them into effectively a single service and sell that service onto the utility. So I'd say that's probably the second big push. And then I'd say the third big push and something that we've seen in South Africa already is the liberalization of the energy markets in general, and particularly the invitation for the private sector to start participating on the generation side and potentially on the retail or distribution side. It's clear that in the future energy system, the utility is not going to survive if they try to build it all themselves. And they can secure their future if they choose those parts of the electricity stack for which they actually have competitive advantage to deliver. And that's things like the transmission network. This is a large, expensive, low-yielding asset where it's a natural monopoly. It makes sense for there only to be one transmission network across the country and not multiple. And so I'd expect that there'll still be public sector involvement in elements of the electricity system, but a significant liberalization. All of that together, I hope, will lead to ultimately cheaper, cleaner, more reliable power for Africans everywhere, through their own rooftop, through selling services to their neighbours and back to the electricity system and coordinating this all through technology.
SPEAKER_02:As people, we often have quotes, mantras, proverbs or affirmations that keep us going when times are challenging or when times are good. Do you have one that you can share with us today? There's one
SPEAKER_03:that comes to mind, it's come up often, and it's an African proverb that it takes a village to raise a child. And as a father of a two-year-old son, I can certainly attest to that, that often your hands are full and it's quite difficult. And if I think about Plentify as this child, I'm often reminded that it's not just John and I that are raising it. We've got an incredible team of people at Plentify who are involved. very committed to our mission. Each of them is personally invested in Plentify's success. Our customers, each one that decides to take a leap of faith and partner with us, they too are contributing to our growth and our ability to service them. And then our investors that have backed us along our journey. Some of them multiple times have shown great faith and conviction even when times are tough. And then the broader ecosystem of grant funders, accelerators, and just folks within the community who either because of an alignment with our mission or just because they're kind people, have all sort of contributed in sort of helping us at Plantify raise this, helping John and I raise this child that we call Plantify. And I think that's important for other African entrepreneurs to remember is that you're not in this alone. is um you'll find your tribe ultimately and um that tribe will grow and operate to a point where it will sustain itself long after we both depart the scene
SPEAKER_02:thank you for that that was beautifully well said john
SPEAKER_04:yeah i mean there's always one quote that i i go back to it's from sun tzu it's opportunities multiply as they are seized. And it's a quote that has resonated deeply with me for a long time. And that's part of the reason why I love being an entrepreneur is it's always exciting. As you make the next step, you see three new doors open in front of you. And it's always a challenge to try to figure out which is the best door to walk through. But when you walk through that door, more opportunities will arise. And so it's a constant, a constant challenge and a constant excitement to build a business like this.
SPEAKER_02:Thank you both. Kailash, John, it's been a pleasure. Thank you for such an insightful conversation. I think after today, it's clear that Plentify isn't just building smart energy products, but also kind of changing how we think about clean, affordable and resilient power supply on the continent. It's been a great conversation. So thank you for your time. Thank you very much, Tessa. It's been a great pleasure speaking with you. Thank you. Thanks, Tessa. Cheers. Thank you to everyone who has listened and stayed tuned to the podcast. If you've enjoyed this episode, please subscribe, share or tell a friend about it. You can also rate, review us in Apple Podcasts or wherever you download your podcast. Thank you and see you next week for the Unlocking Africa podcast.
