Co-Founder & CEO-
SparkMeter is a provider of energy grid management services, hardware, and software across 25 countries in Africa, Asia, and the Americas. Based in Washington, DC, with offices in Kenya and Nigeria, SparkMeter recently raised a USD12m Series A from Clean Energy Ventures, Breakthrough Energy Ventures (co-founded by Bill Gates), and Goodwell Investments, in partnership with Alitheia Capital and Total Energy Ventures.
EMPEA spoke with SparkMeter CEO Dan Schnitzer, one of six founders of SparkMeter, which started as a spin-off of Earthspark, a non-profit Schnitzer founded in 2008 to expand energy access in Haiti.
Dan Schnitzer: We saw potential for micro-grids to accelerate energy access and developed a policy framework for private sector micro-grid development in Haiti. We realized we would need smart metering so that we could do pay-as-you-go [pricing], as well as remote monitoring and demand management; smart metering does all three.
For Haiti, we saw that the smart metering tech, called AMI, or advanced metering infrastructure, was designed for the world’s largest and richest utilities. We wanted to develop something that would be easier to use, plug and play, scalable, and that did not require an IT department to operate. I think AMI is fundamentally an exclusionary technology. We talk about how great the smart grid is, and the cornerstone of any strategy is smart metering, but only the world’s largest and wealthiest can do smart metering, because it’s all built on AMI.
Our prototype was in Haiti, and our first customers after that were [off-grid energy providers] PowerGen Renewable Energy in Tanzania, Husk Power Systems in India, and another partner in Nepal. As for the business model, we earn a margin on every meter we sell, plus the SaaS on top of that. We also offer a higher software tier.
EMPEA: How has SparkMeter managed to build out clean energy hardware and software infrastructure, and scale to 25 countries, with so little funding? Prior to this recent round, you had only raised about USD2m in capital.
Schnitzer: We had no other choice. Capital is hard to come by for these kinds of applications. When we first went out to fundraise in 2013, I had a list of about one hundred investors and donors, and I got rejected by 99% of them. The only investor who expressed interest was Shell Foundation, which provides grants to companies working on energy and mobility in emerging markets, but they said we were too early stage and too technical. So they referred us to Factor[e], which they helped launch, and we were one of Factor[e]’s first investments.
Was the investor pushback more because you were developing a hardware/software hybrid, or because SparkMeter is targeting a relatively lower income target base?
Schnitzer: The pushback was because we are in emerging markets. We got a lot of, “we don’t look at that,” or, “we don’t really understand the tech.”
How do you measure your impact?
Schnitzer: We are looking at new connections, as well as the reliability of existing connections, because SparkMeter is going after two markets: mini-grid connections as they get built, and existing connections that are currently served by unreliable utilities.
If it’s a mini-grid customer, every meter we sell is another household or business that has electricity for the first time; we’ve sold over 100,000 meters to date. For existing utilities, the impact question is a little more subtle, because technically there is already a connection, but probably an unreliable one, so we focus on providing reliability metrics.