Portfolio Learning

How has VentureBuilder grown its investment pipeline during Covid-19?

VentureBuilder has produced two learning papers outlining how they have continued to build an investment pipeline of locally owned and managed African off-grid operators, by refining its sourcing model and build operator resilience by adapting its business support offerings.

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Shell Foundation has supported VentureBuilder (VB) since 2019 with co-funding from USAID and PowerAfrica, to partner with local entrepreneurs in Africa, providing early-stage equity financing and enterprise development services to help launch and scale businesses that will provide millions of people with affordable, reliable, and modern electricity services.

In the first report, Lessons in building a pipeline of locally-owned and -managed off-grid solar companies, VB outlines how its top down sourcing model launched in 2017 provided a number of lessons around hit rates, 

transaction costs, managing expectations and use of team time, and ultimately led to a pivot in 2019 to a bottom-up model that has allowed it to to develop a pipeline of referrals in more than 25 additional countries in Sub-Saharan Africa, some of which generated recommendations for over 10 different local distributors. This extensive pipeline sourcing was achieved without the need for extensive desk research or in-country visits, and has yielded the identification of 113 prospective VB partners.

 

In 2020, with Covid-19 restrictions the pipeline vetting process had to be adapted to undertake all activities remotely. This remote engagement has proven to be time and cost efficient, and has yielded positive outcomes.

VB now enjoys a geographically diverse portfolio of businesses in its pipeline. This enables VB to focus on identifying the most promising commercial prospects that, with VB’s combination of early equity and bespoke business development support, can deliver impact and value for VB’s investors.

Download the report

 

In the second report, VB looks specifically at the resilience needed for African off-grid solar companies in the context of Covid-19.

As the impact of Covid-19 became increasingly clear in mid-March, VB worked with its Board of Directors to examine how it might best engage its resources in such a period of uncertainty. The guidance received was instrumental in shaping the way VB pivoted its operations to respond to the emerging crisis centered on three core tenets:

  • “Leaning in”to customers to understand the challenges faced by the African-owned and -managed businesses in VB’s pipeline.
  • Leveraging scarce resources of finance and business support that have proven extremely elusive for VB’s target companies, yet are crucial for maintaining business continuity
  • Adapting its approaches to quickly and efficiently support local distributors and protect impact

Download the report