Startup’s goal is power for 5 million in Africa
In spring 2015, two determined University of Wisconsin-Madison students, Aaron Olson and Mehrdad Arjmand, set a lofty goal: bring electricity to off-grid rural communities in sub-Saharan Africa.
Three years later, they have powered up 74 households across six villages in the Democratic Republic of the Congo, and on Tuesday they took home first prize in the annual Wisconsin Governor’s Business Plan Contest.
Their company, NovoMoto, was selected from among 12 finalists to win the top prize, giving it first pick on a prize package that includes cash, office space and business services.
Thirty judges evaluated the finalists, who delivered their pitches at the Wisconsin Entrepreneur’s Conference at the UW.
The contest win will give NovoMoto some much-needed visibility as well as the resources to scale up, said Arjmand, who recently completed a PhD in engineering mechanics at UW. Olson is earning his PhD in the same field and expects to complete his degree in the next month.
The idea for NovoMoto, a for-profit social enterprise, was born out of an entrepreneurship class Olson and Arjmand took together at UW in fall 2014. The pair, working with a few other classmates, identified a huge pain point for villagers in sub-Saharan Africa: an over-reliance on diesel and kerosene as energy sources, creating a costly, inefficient system.
Olson, who left the Congo at 2 years old and has since lived in Wisconsin, returned to his country for the first time in January 2015. There, he observed firsthand what he had discussed with his classmates — inadequate access to energy — and saw an opportunity for innovation. After returning to the States, Olson formally launched the company with Arjmand in November 2015.
The two started working on the solution that spring and dubbed their company NovoMoto: Novo, a Portuguese word for “new” and Moto, a word meaning “fire” from a Congolese regional dialect.
Since then, the pair has hired a team of seven — a few of whom are Olson’s family members — to operate in one of the villages. They have also pivoted from their initial idea to solar kits, which are home energy systems consisting of a solar panel, a battery and a controller.
When a household signs up for the service, a NovoMoto tech installs the solar panel on top of the family’s roof and wires it up to a battery. This battery enables customers to light their homes at night, charge mobile phones and power up other small devices.
If households cannot afford to pay for the kit upfront, they can pay for it in installments of $2.15 a week. The battery does not become activated until customers have made their weekly payments, at which point they receive a code to unlock the system.
“We are getting a lot of good feedback from customers,” Arjmand said. “What they are getting is much better than the kerosene experience.”
In fact, Arjmand said, NovoMoto does not have enough funding to satisfy the demand for installations. That’s why competitions like the Governor’s Business Plan Contest are so crucial to the company’s continued growth.
Most of the funding that enabled NovoMoto to begin operations came from similar competitions, in addition to a few grants from the U.S. Department of Energy in 2016. The company also has an angel investor, Arjmand said, who gave the team a loan a few months ago.
But Tuesday’s win will hopefully bring in more investors, Arjmand said, adding that the company aims to close its seed round soon.
But the company’s ultimate goal? “To reach 5 million people by 2026,” Arjmand said. “First, by expanding to the rest of the Congo, and eventually, to other countries in Africa. Five million people. That’s our future.”