Highlights from another significant year for GIF can be found in our latest impact report.

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Investments

Isizwe

  • LocationSouth Africa
  • SectorConnectivity
  • Type of investmentEquity and debt
  • Project stagePilot

Isizwe offers unlimited WiFi access in townships and informal settlements on a low-cost, pay-per-use basis. Users pay R5 (~$0.33) for 24-hours of internet access compared to the average cost in South Africa of R100 ($6.63) per gigabyte.

To deliver the service, Isizwe builds WiFi Zones with hardware that connects to Internet Service Providers (ISPs). This enables Isizwe to provide internet access in low-income locations without having to invest in building expensive backhaul infrastructure. The result is WiFi Zones within walking distance of every home, with one WiFi Zone covering approximately 100 homes.

 

Isizwe

The development problem

As increasing numbers of public and private services move online, digital connectivity is now considered a basic human necessity. The COVID-19 pandemic has made this even more critical with the Internet being used to provide vital information and to connect communities. Many studies have shown that broadband/fast connectivity fosters economic growth through improvements in productivity and efficiency. Research also demonstrates that information access has positive effects on welfare and subjective well-being.

In South Africa, because of the high prices of data, the internet is underutilized. Despite relatively high internet coverage and access to digital devices, most South Africans cannot afford to go online due to high data costs and lack of digital literacy, which are linked with poverty. Heavy bandwidth activities such as watching a video or a lecture online are out of reach for the average consumer.

The innovation

Isizwe is a for-profit company that offers uncapped WiFi access in South African townships and informal settlements on a low-cost pay-per-use basis. The company serves populations that either lack access to fixed or mobile internet access, or cannot afford to connect at current prices. The business model is subscriber-based where users pay R5 (~$0.33) for 24-hour uncapped internet access through their personal device. This is game changing given data costs otherwise R100 ($6.63) per gigabyte in South Africa.

To deliver such services, Isizwe builds WiFi Zones in low-income communities or townships, with a WiFi hardware that connects to Internet Service Providers (ISPs). By partnering with ISPs, Isizwe can provide internet access to target low-income locations without having to invest in building expensive backhaul infrastructure. This means Isizwe can enter dozens of communities and install only the very last mile – creating WiFi Zones within walking distance of every home.

In terms of sales, Isizwe operates a collaborative model with local communities, employing sales agents – which it calls “WiFi entrepreneurs” – to engage with the community and generate direct sales. Isizwe also signs offtake agreements with corporate partners to sponsor WiFi access for target beneficiaries (e.g. students, employees, etc.)

GIF's investment

The use of GIF’s funds by Isizwe will be focused on further testing core assumptions around operational, social, and financial viability. This will include further testing and finetuning the direct community sales model and documenting social outcomes.


Why we invested

By operating its WiFi Zones in underserved communities, Isizwe reaches GIF’s target beneficiaries in South Africa and empowers them by providing access to income-enhancing information, health information and an expanded social network. Isizwe fits with GIF’s overall proposition as an investor to provide early-stage capital for social ventures where there is a limited amount of commercial capital. The public provision of WiFi, as a viable, scalable business model serving BoP customers remains unproven. GIF’s funding at this early stage will help validate and de-risk the business model and crowd in commercial capital in subsequent investment rounds.

Theory of Change

Isizwe reaches the most marginalized populations in South Africa and empowers them through the following impact channels:

• Providing access to income-enhancing information – Internet provides access to information that can improve productivity, employment opportunities, and other income-enhancing opportunities.
• Providing access to health information – Internet provides access to information on basic health care that can improve health and reduce the incidence of disease.
• Improved learning outcomes – Internet provides access to information and facilitates connections to educational resources and virtual labs.
• Improved social inclusion – Internet allows individuals to connect to friends and family all over the world, which promotes social cohesion by reducing feelings of isolation and improving relationships.
• Savings on data costs – WiFi Zones are located in underserved communities and offer substantial data cost savings compared to the alternative of using mobile data.

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