Kingo

Kingo: Turning Lives ON via a prepaid solar energy service that is cheaper than candles

Guatemala City, GuatemalaPeten, Alta Verapaz, and Izabal departments in Guatemala, Guatemala
Year Founded:
2013
Organization type: 
for profit
Project Stage:
Established
Budget: 
$500,000 - $1 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Kingo turns lives ON in communities off the grid through an affordable prepaid solar energy service that is cheaper than the substitute. About 20% of the world’s population lacks electricity, which results in low human development indicators. Kingo is on the path to turn ON 530,000 homes by 2020.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if the quality of life of children and families could be enhanced by access to several hours of bright, clean, light each day?
About Project

Problem: What problem is this project trying to address?

The problem that Kingo seeks to solve is the lack of access to safe, sustainable, and efficient energy. Having access to electricity in the home becomes a huge factor that is linked to people’s ability to be productive, have a better quality of life, have access to education, be healthy, and keep in touch with their social circles. This disproportionately impacts poor people living in rural communities.

Solution: What is the proposed solution? Please be specific!

Kingo has mitigated the lack of access to electricity among the poor families living in rural areas, through its prepaid solar energy service. Our solar systems are called Kingos and they offer our customers the flexibility to choose the amount of energy they need and can afford, with the option to buy credit by the hour, day, week, or month, without paying any fee for installation or maintenance. Payment flexibility, accompanied by the ability to purchase locally have been crucial to our business operating without friction. In particular, Kingo operates very similarly to a telecommunications company, where the understanding of the market from the commercial angle is crucial to develop a model for a scalable and sustainable business.

Awards

Citi 2015 Award, MIT 2014 TOP Innovators under 35 in Central America, 2013 Guatemalan Young Manager of the Year by AGG, Unreasonable Institute Fellow, Agora Partnership Fellow
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

For children and young people in rural communities without access to electricity, studying is difficult for many reasons. Fernando, Julia, Pablo and Norma are four such children. They spend their mornings at school and their afternoons doing household chores. Once these are done, the sun has almost fully set, so they do their homework by candlelight. Studying by candlelight not only hurts their eyes, it limits their ability to finish their homework in time. However, as the children’s father Julio tells us, studying has become much easier since he signed-up for Kingo’s service. Now, Julio’s children study for longer and more easily. In addition, their school teacher believes that their performance has increased as a result of this change.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

An impact study based on information from 157 families in communities in Petén, Guatemala, revealed important details about the impact our service has on many homes. Kingo impact measurements focus on the following indicators: financial savings, education, health and security, connectivity, and happiness. Some important findings are the following: 92% confirm they have saved money each month; 81% of parents confirm that their child's grades have improved, and now study 350% more time; we have lowered the incidence of accidents or fires to 0%, while 56% confirmed that they had accidents before; and 96% confirm that their productivity has increased. Additionally, our services have offset over 2,100 metric tons of CO2, based on a 3 candle per day usage by our customers. Our vision is global and our future impact can be significantly greater as we expand into other countries and regions.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

Our vision is global. In the short-term, we are focused on Latin America and the Caribbean, specifically, the countries of Guatemala, Honduras, Nicaragua, and Haiti, home to about 2.2 million households without access to a reliable electricity network. Currently, Kingo provides service to more than 8,000 households, a total of 40,000 people. With 1,600 new home installations per month, and growing, Kingo is creating the capacity to reach 45,000 households by the end of 2016. Our goal by 2020 is to electrify 530,000 households, 16% of the total market in the region, in these four countries.
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

As we expand, one of our key performance indicators and part of our short-term plan, both our net revenue and CapEx will increase, although net revenue at a faster rate. Nevertheless, Kingo's forecasted capital needs will require outside funding up to Year 5. After Year 5, Kingo is expected to be able to fund on-going new market expansion. Kingo will reach profitability at the end of 2016 and is projected to deliver benchmark IRR’s to investors.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Our most successful competitors are in Africa. They differ from us in several ways: limited warranty; reliance on cell coverage; and transfer of ownership to customers. We maintain ownership of our systems and offer our customers a perpetual warranty, reducing their financial burden and risks, for example, costs of repair and maintenance. Additionally, our software, ability to function without cell coverage, local expertise, vast knowledge in mass consumer products, first-mover advantage in the region, and logistical capabilities have given us a competitive advantage.
Team

Founding Story

Kingo is the result of various entrepreneurs trying to align their values with their daily activities. Coming from consumer goods, internet, and banking backgrounds, Kingo’s founders had the experience and vision to create a solution that could scale massively. Specifically back in 2012, Juan, the CEO, had an “Aha!” moment while diving around Lake Atitlan in Guatemala, where he was participating in a lake cleanup, hosted by his then employer. Interestingly enough, about 50% of the trash that he picked up was packages of products from his employer that was hosting the event! This solidified his passion to begin the type of corporation that is a vehicle for change and improvement in the world.

Team

Our executive staff are located at our headquarters in Guatemala City, Guatemala. They include our CEO, CTO/CFO, Communications Director, and COO, with a team under each role. The CEO is in charge of leading the company’s overall strategy and funding efforts. Our CTO/CFO oversees the software developers and hardware engineers, as well as our administrative and accounting teams. Under the COO is the branch managers who oversee the sales agents supervisors, service agents supervisors, validators, sales agents, service agents, technicians, and call centers. The governance of Kingo is the responsibility of our board of directors with support of our executive team. In total, Kingo currently employs around 90 full-time people, and is looking to quickly ramp-up its efforts to reach its target of electrifying 530,000 homes by 2020.
Background
Please confirm how you heard about the Unilever Awards:

Through a search online.

Please confirm your role in the initiative (eg Founder/co-Founder) and your organisational title:

Co-Founder and CEO

Which of the 8 UN Global Goals (Sustainable Development Goals) pre-selected for this competition does your solution relate most closely to? [select all that apply]

Affordable and Clean Energy.

Leadership and the Unilever Awards
Please provide examples of any previous entrepreneurial initiatives you have pioneered.

Juan founded Quetsol in 2011, a retail solar energy company that offered customers a pay-to-own product and which was able to electrify 4,000 homes in 2 years. Also, in 2007, he founded and managed a publicity agency called Spinhouse Agency.

Beyond your existing team, who else are you working with to achieve your objectives, eg partners, advisors, mentors?

Integral to the success of our short-term strategy of expanding within the Central American and the Caribbean market is establishing and maintaining strategic partnerships in the region that would enable us to replicate our business model with greater ease. We have a partnership with one of our investors, Grupo OEG, who has logistical expertise throughout Latin America. Our partnership with them allows us the capability of rapid deployment into new markets in the region. Having on-the-ground staff with local knowledge of the geography and the languages helps expedite our penetration and reach more customers. We also partner with two national banks (BanRural and G&T) and one of the largest telecommunications company in Latin America, Tigo. These three partnerships serve to transfer payment of our systems from the local shopkeepers, who sell credit to our customers, to our bank account, as well as selling credit to our shopkeepers in order for them to then sell to our customers. Both our shopkeepers, the Banks, and Tigo have software that we developed to streamline the process of credit sales and money transfer.