Daily lives in Africa transformed by crowdfunded innovations

Just after sunrise in Nairobi, Amos, a motorcycle taxi driver, grabs his fully charged dual battery and heads out to start his day. With a quick click, he connects it to his electric motorcycle, confident it'll power him for hours as he navigates the congested city streets, delivering goods – and sometimes people. His first stop, the local market, where he loads up on crates of onions destined for a downtown restaurant. A year into using an electric motorcycle, Amos knows it can handle the load. 

Later, as dusk settles on Kigali hundreds of miles to the west, Julienne, a busy working mother, gets her kids settled with their homework, then heads to the kitchen area to boil cassava. She scoops biomass pellets into the central chamber of her new cookstove. After a flick of a match, she’s soon greeted by a steady flame – no more billowing charcoal smoke that made everyone cough no matter if she kept the windows open. Dinner prep is now a lot easier.

Both the electric motorcycle and the biomass pellets were introduced to market by pioneering companies dedicated to making sustainable solutions accessible to a greater number of African consumers. Despite their differences in scale, operations, and financing, e-mobility company Roam and pellet producer Biomassters share a common challenge: establishing a foothold in comparatively high-risk markets with nascent business models targeting low-income customers. Amid these market conditions, securing commercial capital at favourable interest rates proved difficult, which led both companies to turn to debt crowdfunding for flexible bridge financing – a short-term option intended to cover gaps as the company transitions from seed funding to later stages of investment. Their campaigns on crowdfunding platforms successfully raised the necessary funds, allowing the companies to scale operations and reach more customers. Their products are well-suited to the economic and technological needs of their users. By supporting the growth of these companies, crowdfunding is paving the way for a more sustainable future.

Empowering local drivers with affordable e-mobility

Roam, an e-mobility leader based in Kenya, designs and develops electric vehicles for emerging markets. Roam – formerly known as Opibus – was founded in 2017 and initially made its mark by electrifying existing buses. Following five years of research, Roam launched their electric motorcycles in 2022. “While Roam has an asset-light approach to hardware, we needed working capital to scale,” says Hans van Toor from Roam. “There is a mismatch between scaling up hardware solutions in East Africa and the financing options that are available. Which is why we decided to run a series of five campaigns on Lendahand starting October 2022 which collectively raised USD $839k”. This loan enabled them to purchase parts, ship, and assemble 347 motorcycles for ‘boda boda’ drivers, the local term for motorcycle taxis in Kenya. The company has continued to gain momentum: Roam raised $24m in a Series A round in 2023 which includes $10m debt from the U.S. International Development Finance Corporation (IDFC). The company has also maintained its crowdfunding efforts with a recent campaign on the Energise Africa platform, demonstrating that crowdfunding can effectively complement other financing avenues. 

In bustling African cities like Nairobi, motorcycles rule the roads, as a means of transport and employment. But for most boda boda drivers, that means relying on loud, petrol-guzzling internal combustion engine (ICE) motorcycles that demand frequent repairs. With the skyrocketing cost of petrol eating into their already slim profits, it is no wonder that boda boda drivers like Amos are increasingly turning to e-mobility for its lower operating costs. With his Roam Air, he covers 100 km for just $0.77 in electricity – way less than the $3.47 he used to spend on petrol. Gone are the long waits in fuel lines and the stress of petrol shortages: now Amos charges each battery at home in less than four hours using a standard socket. 

With no filters, spark plugs, or valves to clean or fix, Amos says he regards e-mobility as “the future”. Thanks to M-KOPA’s asset financing, he will fully own the motorcycle outright within two years, while saving enough on fuel and maintenance to set aside an extra $2.50 daily for his family’s needs (from an average daily take of $10-15). He’s not alone –Roam’s surveys show electric motorcycles cut maintenance costs by 80% and fuel costs by 60%, leading to a 50% increase in riders’ net earnings. What’s more, the e-mobility revolution will significantly reduce reliance on fossil fuels, helping to curb air pollution and combat climate change.

Crowdfunding: a catalyst for local innovations

Delivering pioneering solutions in challenging markets requires companies to secure investment in a tough financing environment. Crowdfunding has emerged as a valuable complement or alternative to traditional funding methods, filling a critical gap. In 2023 alone, 269 energy-access campaigns were launched, with 55% raising between $100,000 and $500,000. This increasingly vibrant crowdfunding ecosystem has been bolstered by the Energy 4 Impact programme, Crowd Power, funded by UK aid through the Transforming Energy Access platform, which supports crowdfunding initiatives. Crowd Power aims to tackle systemic and operational challenges commonly faced by crowdfunding platforms, including high operating costs, pipeline development and investor base expansion. It has played a key role in crafting innovative funding structures and de-risking mechanisms – such as first-loss facility and equity-like upside – that enable platforms to take on more borrowers and foster successful campaigns. It has also spurred investment through targeted incentives: in a recent Roam campaign, for instance, €50 vouchers for first-time investors attracted 67 new backers.

Cleaner cooking fuels for healthier households

In contrast to Roam, Biomassters was a small early-stage start-up when it turned to crowdfunding. The company sells Rwandan-made pellet fuel using biomass waste materials, alongside gasification cookstoves that meet stringent efficiency and emissions standards. After two years of operation since its founding in 2020, Biomassters reached a crunch point in their capital raising journey and turned to the crowdfunding platform Charm Impact, known for its focus on making funding accessible to smaller companies. BioMassters raised $515k through three campaigns between 2022 and 2023 to finance the purchase of cookstove stock. “As a result, we were able to increase our customer base from 300 to 4,500 households in Kigali,” says Claudia Muench from Biomassters, “and that really allowed us to prove traction”. Since then, the company has secured a mix of grant, equity and debt funding totaling nearly $1.7m. In addition, they pre-sold carbon credits worth $315k, which enabled them to reduce the purchase price of their cookstoves, putting them in a better position to establish pellet cooking in the mass market. 

In Rwanda, as in many parts of Africa, charcoal cookstoves are ubiquitous. The rising cost of charcoal is a major drain on household budgets, and these cookstoves are inefficient at generating enough heat for quick meal preparation. On the health front, the noxious smoke from burning charcoal poses serious respiratory risks, especially for women and children who spend more time at home, and hardly helps the environment either, releasing CO2 that speeds up climate change. 

For Julienne, switching to biomass pellets, which produce more heat with less fuel, was a no-brainer. Enough pellets for a month of family meals now cost Julienne $18.57, a sharp reduction from the $31.21 she used to spend. Like Amos, she is diverting those financial savings towards meeting the health and educational needs of her family. Lighting a charcoal stove, and keeping it lit, used to be a laborious task, but the ease and efficiency of using pellets has allowed Julienne to become “more punctual for work commitments and spend more quality time with my family”. Cooking with pellets is also good for the planet: made from waste from forest management, reforestation and furniture production, they not only reduce reliance on raw biomass and charcoal but also have emission levels comparable to those of LPG.

An evolving landscape

The crowdfunding success stories of Roam and Biomassters – two trailblazing companies at vastly different stages of growth—highlight just how dynamic and versatile crowdfunding has become as a financing tool. Their journeys reflect a broader shift in the crowdfunding landscape, towards an increasingly diverse pool of borrowers, as highlighted in Crowd Power’s State of the Market Report 2023-2024.

According to Thomas Petex, Programme Manager at Crowd Power, platforms are rapidly evolving in response to shifting market dynamics. “We’re witnessing them move away from over-reliance on PAYGo solar home system borrowers and adopt new selection criteria and investment strategies. Many are also branching into new sectors, which we can see in the rising importance of C&I, or expanding their geographical focus, increasingly towards Asia and Latin America. This opens doors for a wider range of promising companies, at all stages of development, to find the right platform willing to take them on.” 

Despite this progress, the sector still has untapped potential. For the crowdfunding market to reach its full maturity, stakeholders need to collaborate on building a stronger pipeline of investable companies, innovate to boost platforms’ risk tolerance, and draw in more investors with compelling, well-crafted campaigns.