We have been picking up speed in the last few months, so we’ll change the rhythm of our updates from quarterly to once every two months. Today you will read about our funding breakthrough that allows us to digitise our model, new additions to the team that strengthen our tech capacities, and new ventures on the horizon that see us “go West”.
Funding breakthrough from German government
Last year ended with a big bang when BMZ (the German development ministry) confirmed funding of half a million Euros to create a digital scale-up platform for our ventures. This had been a long time in the making, and finally went through just before Christmas. There is a familiar concept in the start-up world: the valley of death. It’s where most young companies fail – unless they find an angel investor. Well, we have crossed the valley of death and we came through: thanks to BMZ and their executing partner, GIZ. They shared our vision that green jobs create opportunities, that local small and medium enterprises are great job engines, and that they need intuitive, locally adapted technical solutions to help them grow and replicate more effectively and faster. Think “one-stop shop” for budding franchisees of our franchise businesses who get provided everything they need to build a franchise from scratch. With the help of BMZ, we can now staff a team and get to work to create a working version of such a scale-up platform this year. Thank you, German government, for putting faith in our young organisation. It means a lot, not only financially but also psychologically.
The team is getting stronger and stronger
Regular readers will recall how we welcomed first Anne Lawi from Nairobi and then Stephanie Naumann from Hamburg to our team. Now we are lucky to welcome Martin Stadler from Berlin as Chief Technology Officer. Martin was Lead Engineer at Boston Consulting Group Digital Ventures, the corporate venture builder. An engineer in media technology, he has co-founded tech companies, and been a front-end programmer and web designer. He organized and ran Hackathons in Africa and is co-founder and coach at OpenTechSchool, the free tech education community. He came across Impacc when we applied for BCG DV’s social venture program and decided to join us before we even got selected. Clearly, he likes taking risks. We are fortunate to have him, and he is currently busy building a tech team in Africa and helping us all become more agile in how we operate.
New ventures on the horizon
2021 is the year to add new ventures to our portfolio. We are especially excited about WashKing, the maker of biodigester toilets for slums in Ghana. You may recall that Jochen joined their supervisory board last summer to find out more about their business model and its potential. We are now convinced that WashKing is the right fit for our portfolio. Driven by a passionate entrepreneur, Dieudonné Kwame Agudah, they address a real problem with an ingeniously simple solution: many slum dwellings don’t have toilets, there is no canalisation, and people defer to open defecation which is undignified and risky and leads to disease. Pit toilets need to be emptied every year or else they overflow, especially in the rainy season (and they often do). WashKing’s solution: simple pit toilets that come with an enzyme mix that eats faeces, thereby reducing volume and thus the need to empty to once every ten years. Because people can’t afford the one-off payment, WashKing has developed an innovative pay-per-use model that works with access cards that we know from some hotels to open rooms. Single use is affordable to poor households at a few cents, but the sum pays off the toilet over a couple of years. WashKing is strong in Accra but, with our help, wants to grow further in Ghana and expand to Sierra Leone where we have a good network. We will seek to raise funding of about 200k€ over the next year or so and then join Dieudonné and WashKing and jointly make it big in West Africa.
We are busy building a training centre for our clay gasifiers in Ethiopia and hope to be able to share first impressions in the next newsletter. We are also building our team in Africa and are looking to hire technical and business experts in Ethiopia and Uganda - details in our vacancies. Stay tuned to get to know the growing team.
Until then, stay safe! Till
Welcome everyone to our latest newsletter. Since August we have made great progress in creating green jobs for poor people in fragile states. For a start, Mirembe Nnaassuna, MakaPads CEO, has found an ingenious approach to increasing demand and building distribution for their biodegradable sanitary pads. Back in Germany, we have managed to grow our team of impatient optimists and secured major pro bono support in building our social investment platform. Enjoy the read - we are curious to know any thoughts, ideas or suggestions you may have for us.
MakaPads entering new markets
Recall MakaPads from Uganda - the biodegradable sanitary pads made of papyrus that enable girls to go to school throughoutfor the entire month? It’s exciting to see the progress we are making in entering previously underserved markets. Our CEO Mirembe Nnaassuna and her team have launched two test markets, one in the slums of Kampala and one in Masaka, a rural area halfway between Kampala and the Tanzanian border. We always knew that the unserved market for sanitary pads was huge at 70% of the total market, which left mainly poor women in rural areas without access. What we are beginning to learn is MakaPads seems to be the right product to meet their needs. The MakaPads team haves created a marketing and sales approach that always starts with training sessions around menstrual hygiene, sometimes in cooperation with local health centers, sometimes in the context of village churches. They complement this with product demonstrations and free sampling and then ask attendees where they shop for daily necessities. These shops are then approached and asked to list MakaPads. Our experience so far: great enthusiasm about our natural pads, great openness to stock our products, and a sound business model for all involved. The pads sell for 2,500 Ugandan Shillings for a pack of ten (about half a Euro). This is half of what international and non-biodegradable products cost, and it’s affordable for poor people. The shop owners buy from us for 2,200 Shillings, and the sales margin is enough to support our product. We, in turn, produce for less than 2,000 Shillings, which makes our approach sustainable financially. A win-win for all parties involved, and a great test case for our model. I am particularly thrilled by the entrepreneurial spirit of Mirembe and her team. While we have spare production capacity in our factory in Kampala, we were lacking sales teams to build up distribution. So Mirembe retrained the production staff as sales reps – who can talk knowledgeably and convincingly about the product they have already been producing, while saving money by using people we already had on the payroll. And by seeing the enthusiastic reactions of rural women to our product, they return to production more energized and more motivated. It’s a joy to see this team in action!
Building our digital platform with BCG DV
Back in the summer, we got our first break with financial support from Siemens Foundation, Hans-Neumann-Foundation and Deutsche Stiftung Weltbevölkerung for our ventures in Africa. We have now had another major breakthrough by winning a highly competitive call with Boston Consulting Group Digital Ventures (BCG DV). Every year, BCG DV donates 2% of their resources to building digital platforms that create social impact. This year, they chose Impacc. In the previous months, we had established proof of concept for Impacc with an "analogue" business model: we scout for business ideas in our network, secure funding through individual fundraising, and build businesses through close mentoring and co-management. The next step for us is to digitize our model in order to make it scalable. In a nutshell, we want to build a digital platform that i) attracts a new group of donors who want to make a social investment for which they expect a return and ii) standardize and automate business processes to allow ventures to go from prototype to scale quickly, and to on-board multiple franchisees. BCG DV will field a team of experts and build a first version of that platform with us in early 2021. We can’t wait to work with them!
The team is growing
Welcome Stephanie Naumann as our new head of marketing! Stephanie shares our passion of using the tools of business to drive social change. In her case, that’s the whole toolbox of marketing - from branding to communications to digital marketing and social media. Stephanie studied business administration in Berlin, Paris and Oxford. After a stint in management consulting she learnt the trade at Montblanc and has held leadership positions in various European companies and retailers. She is a keen sourdough baker and an even keener volunteer, having consulted various NGOs and charities, and having volunteered in integration programs for refugees. She has hit the ground running and already established a digital presence on LinkedIn and Facebook for you to follow and share the good news. We are glad to have her on board.
We are ready to officially register our Makapads Joint Venture in Uganda. Money is in the banks and waiting to be transferred to Uganda to get the business there off the ground. In Ethiopia, we are vetting candidates to build the first two production workshops for our gasifier stoves, and we expect to run first training sessions at the end of the year. In Addis and Hamburg, we are continuing to build our team and will share news (and new faces) in the next Newsletter.
All the best and stay safe, Till
Impacc is an international social business NGO that creates green jobs for poor people in fragile states. We build and scale businesses where markets don’t yet work for the poorest. We find innovative business models that have the potential to create local, green jobs, often with a franchise approach. These businesses wouldn’t be able to compete on the open market because of market barriers such as lack of skills, social norms, conflict, etc. That’ s why we combine aid with revenue generation where markets fail to meet basic human needs. We link social investors with innovative social businesses to help them scale and have social impact. By this, we empower poor people and their communities to abolish poverty once and for all.
The team is growing
In the last Newsletter, I wrote about MakaPads from Uganda - the biodegradable sanitary pads made of papyrus that enable girls to go to school for the entire month. In the meantime, we have further ramped up operations on the ground. We have hired Deborah Muhuruzi as Sales Manager. Deborah comes from Coca-Cola where she has been Key Account Manager in Uganda since 2015, and she has convinced us with her passion to use the tools of business to drive social change. We believe she is the perfect candidate to reinvent the MakaPads business model from an NGO-donation model to a direct sales model in rural areas. We have also hired Mirembe Nnassuuna as interim CEO. A civil engineer with decades of experience, Mirembe had already been engaged in optimising production of the pads, and has now accepted the challenge to prepare the Joint Venture for registration until the end of the year while we do an extensive search for a long-term CEO to lead MakaPads into the future.
Recall that SIEMENS Foundation had agreed to finance the setting up of the MakaPads Joint Venture in Uganda. We are please that the Hans Neumann Foundation and DSW (Deutsche Stiftung Weltbevölkerung) have joined the consortium of financers with 50,000€, which will enable us to build two additional production franchises in Uganda, which in turn will create green jobs among youth club members in rural areas. Also on the financing side, we have been selected by PFAN (a UN-sponsored body that matches social enterprises with financing) to become part of their portfolio, and they will do fundraising for us. Our clay gasifier business in Ethiopia (ovens that allow poor people to earn money while cooking by producing charcoal during the cooking process) has moved on to the final stage of funding with Innovation Against Poverty, which would secure $150,000 and which would enable us to register our Joint Venture in Ethiopia.
New ventures on the horizon
We don't want to do too much, too fast - which is why we will only start two joint ventures this year so that we can devote enough attention to them to make them grow. We are, however, already in the process of broadening our portfolio for the future. To this end, Jochen has accepted a seat on the advisory board of WashKing Ghana, a maker of eco-friendly biodigester toilets for slums and urban areas. We believe that this ingeniously simple idea might have the potential to scale beyond Ghana, and we will use our advisory board connection to learn more about the business and its potential.
New fundraising tools
We finance our investments by blending different funding sources. The first step of the journey was the registration of Impacc as a charitable enterprise which allows us to accept donations and issue tax-exemption certificates. The next step of the journey is to shift the discourse from donations to investments. With great help from our legal partners, Freshfields, we have now found a way to accept private loans for which we can offer current market interest rates (albeit with the high risk that comes from investing in areas like ours, where markets by definition don't yet work). We hope that this will become an attractive "product" for those donors who want to do good but who want to keep control of their money, while perhaps even getting a small return. We will spend the next few months turning this good news into concrete loan proposals.
We are now getting serious about building our start-ups in Africa. Jochen has finally moved to Addis Abeba to be close to our ventures and further build our network amongst the African start-up community. As travel is still heavily restricted, we have moved to weekly virtual coaching of the MakaPads team to help them redefine their business model and do market testing. The focus for our clay gasifiers in Ethiopia is on registering a patent in Germany and Ethiopia, and on further negotiations with potential partners like SOS Children's Villages, who are interested to offer job opportunities to those young people who leave their villages. And we are moving ahead on developing the technical specifications for our digital platform with the pro bono help of Allianz Consultants. Watch this space for more in the next Newsletter.
All the best and stay safe, Till
First two ventures ready to go
My co-founder Jochen and I went to Kenya, Ethiopia and Uganda right before the lockdown and negotiated Letters of Intent for the creation of Impacc Stoves Ltd. in Ethiopia and MakaPads impacc in Uganda. In Ethiopia, practical testing for the “Noah stoves” has been completed by inventor Marius Bierig and his team, and it confirms both the technical readiness of the product and an astonishing 90% willingness to buy among the target group. In Uganda, Paul Kimera, the manager of the company his late father set up that produces MakaPads, has agreed to establish a joint venture with us in order to sell MakaPads on the open market – as opposed to the old model of selling to charities who would then distribute them for free. Corona has slowed us down – we were meant to travel to Uganda this month to develop a marketing and sales plan for MakaPads, and to select a General Manager for our stove business in Ethiopia. But at least we made great progress in developing plans for our first two joint ventures which are now ready to be executed as soon as we can travel to the region again.
Anne Lawi joins the team
We are thrilled that we could win Anne Lawi to join our team. A Kenyan national, Anne has extensive experience in Business and Startup Development, having supported more than 300 startups and SMEs across Africa. She has designed and implemented more than 50 Pan African acceleration, incubation and innovation programs. On top of that, we could win Oli Brown as Strategic Adviser. Oli has been a long-time policy officer with UNEP in Kenya with a focus on the environment in fragile contexts. He brings environmental expertise to the team to make sure that the jobs we create are part of a green economy. Gianni Sommer is a businessman from Hamburg, and he has agreed to support us in the areas of project management and finance. He will co-host Impacc in his new office space in Hamburg and share some admin resources.
Money from SIEMENS
We are happy to report that SIEMENS Foundation has decided to support the start-up of our sanitary pads venture in Uganda. Together with our private donation fundraising, this will allow us to register our joint venture in Kampala as soon as the situation on the ground is more relaxed again. On top of that, we have been lucky to win the pro bono support of many firms that believe in our approach. Freshfields and White&Case are doing all the legal work for us. Dr. Röh & Partner and Berthold Gertler are doing our taxes and keeping our books, respectively. Award-winning design agency kw43 in Düsseldorf has developed a logo and visual identity for us. Naturally, they are all feeling the heat of the lockdown, and while this has meant we had to slow down our pace somewhat I am grateful that they are still with us. Thank you!
Located right in the heart of Hamburg‘s alternative and quirky “Schanzenviertel”, it is the new home to Impacc Germany. We did the renovations ourselves and got all our office furniture donated. Good deal!
Our logo (see above in the header) was developed by design agency, KW43. The idea: currencies have been invented to serve the people. We create a new currency that puts people back at the center - the Impacc. The logo symbolises our approach: use the tools of business for social change. You like it?
We spent the last few months setting up impacc as a charitable company in Germany and finding the right venture ideas in East Africa. With that done, our focus now is on institutional fundraising with proposals being written to organisations like GIZ, German Development Cooperation. We have put private donation fundraising on hold for the moment as we felt people had other things to worry about. But now that we seem to be getting back to a new kind of normal, we will ramp up fundraising efforts again from June/July onwards. But most importantly, we are looking forward to getting back in the field to help make our stoves in Ethiopia and our pads in Uganda a success.
All the best and stay safe, Till