PayGo Energy — Impact Brief

Introduction

PayGo Energy (PayGo) is a Nairobi-based technology company on a mission to Unlock Clean Cooking for the Next Billion. PayGo’s technology alleviates key cost constraints that cause reliance on dirty fuels amongst low-income households in the developing world. PayGo’s core innovation is a smart meter that attaches to a LPG cylinder, together with a business model that is adjusted to the needs of low-income consumers. PayGo’s patented Cylinder Smart Meter measures gas by the gram and integrates with mobile money, enabling customers to pay for LPG in any amount.

Use of GIF Funds

GIF’s debt and equity investment of up to $816,000 in PayGo Energy has been used for hardware and software development, hardware manufacturing, marketing, sales, operations and working capital.

Objectives

Expansion into priority markets in Sub-Saharan Africa and Asia; hardware value engineering; global partnerships and meter deployment.

Impact to Date

Since GIF’s initial investment, PayGo has proven key hypotheses fundamental to its business model:

• The domestic mass market consumes gas predictably when given the opportunity to pay incrementally. PayGo customers reliably consume over 4.5kg of gas per month, and rarely supplement LPG with dirty fuels.
• By selling gas in small amounts, PayGo is able to acquire and retain customers in a highly commoditized market, in addition to driving demand. Over 80% of PayGo customers are first time users of LPG, and customer retention is over 90%.
• Through asset tracking and demand data PayGo is able to serve more customers with less cylinders. PayGo averages 1.4 cylinders per pay-as-you-go customer, less than half than the industry average of 3:1.
• LPG smart metering technology can be safe, reliable and affordable. PayGo’s Cylinder Smart Meter is ATEX Zone II Certified, and the first of its kind.