Upya Notes from the Last Mile:
2021 — The Year of Resiliency
To objectively evaluate 2021 we will need to wait a few more weeks before seeing industry data from the likes of GOGLA, the Clean Cooking Alliance or the ARE; hopefully confirming earlier signs that 2021 has shown improvements in sales of SHS, appliances, clean cooking, water filters and others; and more importantly numbers that confirm a greater reach and impact for Last Mile customers in Africa and Asia.
However, with certainty, we can say that the past year came with its fair share of challenges and also amazing opportunities to build sustainable and impactful businesses.
The challenges: Covid and Supply
Throughout 2021 it felt that we could never really say: “now that covid is behind us”. In many countries, our partners were impacted by the difficulty of reaching last mile customers due to mobility restrictions; it remains to be confirmed to what extent, yet partial lock-downs had an impact on the purchasing power of last mile customers and simple administrative procedures sometimes seemed to be taking forever: “because of Covid”. Yet it felt different than 2020, restrictions of course were in many countries loosened, but more importantly businesses were better prepared and knew what to expect and how to operate their operations with Covid.
What nobody really saw coming, and surely the greatest challenge of 2021, has been the huge supply chain shortages (not all due to Covid). Even the New York times was surprised: “Confession: We didn’t even have a logistics beat before the pandemic. Now we do. Here’s what we’ve learned about the global supply chain disruption” [Link to full article]
Lead times became unmanageable and shipping costs sky rocketed; forcing many Last Mile Distributors to scramble for products, purchase surplus stock from their counter parts, source locally or simply change their offering to stay afloat.
The opportunities: financing and spotlight
Before celebrating the fact that financing to African start-ups has hit record numbers this year, we need to be cognizant that many early stage start-ups in our sector still scrabble to get the right financing to properly scale, that in some countries it is easier than others to get financing and that women led start-ups struggle to be properly funded. This topic is extensively covered in the latest GOGLA Invest in the Sun Podcast.
And yet, it is worth celebrating that “In November, 110 (!!) startups in Africa have closed funding rounds (above $100K), reaching a total of over $800M, making November 2021, the second biggest month in terms of startups fundraising in the continent, behind… September 2021 ($818M). And the second month in terms of amount of deals closed (110 deals) behind the month of… October 2021 (119 deals)” [Extract from November 2021 Update: Africa: The Big Deal].
A portion of that financing has gone to green businesses and the trend is bound to grow. A recent survey by the European Investment Bank showed that 54% of surveyed African banks were already viewing climate as a strategic issue, and just over 40% have staff working on climate-related opportunities. Other financial institutions, including microfinance, private capital and insurers, are also filling market gaps in green finance. [Link to full article]
In the year of the COP26, for months much of the headlines were around climate change and how to mitigate it. As Koen Peters (GOGLA Executive Director) writes in this COP26 note: “At this COP, energy access has been positioned for the first time as an important part of the climate agenda.”
In its report on the COP26, carbon credit organization Verra celebrated that “Almost 200 countries reached agreement on Article 6 of the Paris Agreement, which sets out the rules for global trade in greenhouse gas emissions reductions — a move that strengthens the market for voluntary carbon credits”
Note: We will cover Carbon Credits extensively in 2022 — stay tuned.
2021 — The year of Resiliency
Hence, the best word to summarize 2021 might just be “resiliency.” With resiliency always comes the idea of surpassing challenges with a conviction that it is worth the effort, that the road will be long but rewarding.
We have seen from our partners, and even talking to prospects, amazing resiliency as they faced continuous challenges, those mentioned above and others. Making tough decisions, repeatedly innovating, increasing supplier options, leveraging new schemes such as carbon credits (even in SHS and WASH solutions); diversifying their offering such as minigrid providers vertically selling appliances, changing payment schemes from PAYGO to Membership based schemes and the list goes on.
For Upya, it has also meant being regularly challenged on our key value proposition, which is to be the most flexible CRM solution in the market, from a product and team stand-point. We ourselves had to become even more resilient, creative and adaptable to accompany our partners and support their ever changing sales operations. The reward has undoubtedly been the existing partnerships that have become stronger with 2 million plus payments recorded on Upya and the new partnerships built this year with clients from across Africa and Asia and from a variety of sectors.
It is because of our clients with whom we have brainstormed, exchanged and cemented true partnerships throughout 2021, that we go into 2022 feeling stronger than ever and convinced that we can continue to help them manage and scale sustainable and impactful businesses.
