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Rural Spark team 7
Rural Spark 's-Hertogenbosch, NL

Rural Spark: Access to energy

Rural Spark offers access to renewable energy to emerging markets with an off-grid solar powered solution. Join us to build the energy ecosystem of tomorrow!

$572.894 INVESTED
246%
$232.884 0
Minimum target amount Days left
€800.000 6,00%
Maximum target amount Interest rate
Small_thumb_harmen_van_heist_b_w_copy Rural Spark: Access to energy
INNER CIRCLE
Product

INNOVATIVE ACCESS TO RENEWABLE ENERGY FOR A HUGE MARKET

Access to energy is a universal right! Still, over a billion (!) people lack access to energy. They have to rely on polluting and dangerous kerosene or their lives come to a stop after sunset. 

Rural Spark is changing that with their off-grid solar powered solutions, providing people with a solar panel, energy storage and low power appliances. It enables people to prosper, develop and participate in the global economy. 

We invite you to help us grow and share in our success! We are on the verge of a solid growth path and we believe this is the best moment to join.


Our approach is threefold: we have developed the Rural Spark Energy Kit, we offer our partners the Rural Spark Service Platform and – unique in our market – we offer Access to Finance to our partners. This is the Rural Spark Ecosystem.


The Rural Spark Energy Kit

Rural Spark’s solution powers any device through solar power. Upon joining Rural Spark, A household or business gets the Rural Spark Energy Kit, containing our Energy Router, a solar panel, some Smart Cubes and some energy efficient devices (for example lights, radio, fan and even a TV).

Surplus energy is automatically stored in portable Smart Cubes during the day, so it can be used later after sunset  or as an independent power source. With the Rural Spark kit, you have energy 24/7.


Modular and scalable

The modularity of our solution allows for an affordable entry with a basic kit. To accommodate growing energy demand, more solar panels and Smart Cubes can be added, as well as any USB-powered or 12V appliances. 


Pay-as-you-go

Rural Spark sells directly to local distribution partners, reliable and well established companies that know their local markets very well. End users pay for it in instalments using the built-in prepaid mechanism. They use local mobile payment platforms linked to the Rural Spark Service Platform.


Energy sharing

The Rural Spark Energy Kit looks and functions like a Solar Home System, yet it is also designed to share energy. Surpluses can be exchanged with other users allowing to not just power households, but also entire villages. This is our first step in building smart grids and develop the sustainable energy networks of the future.


Service platform

Our Rural Spark Service Platform offers our partners a sales tool for selling kits on Pay-Go basis, it is well integrated with local payment methods (mobile money), gives real time insights in sales and quality of loans and it offers after sales support.


Access to finance

Rural Spark sells in bulk to local distribution partners. Those partners are relying on regional financing at high interest rates. We offer access to capital through export programs from the Dutch government. This is a unique proposition in the sector, allowing our partners to order larger volumes at lower costs, with Rural Spark having the guarantee of being paid.


Where are we heading?

Rural Spark is active in seven countries (Benin, Congo DRC, Nigeria, Senegal, Uganda, Zambia and Zimbabwe). We are growing fast and expecting to sell 9.500 energy kits in 2019 and 35.000 kits in 2020. The off grid solar sector is fast growing and huge market with lots of opportunities.

Your investment helps us making a revolutionary change in the lives of more than 200.000 people, all in a sustainable and scalable for-profit way, offering healthy revenues to Rural Spark and its investors. Rural Spark is on the eve of growing big. We invite you to come aboard while is 


Join us to build the energy ecosystem of tomorrow!



Motivation

Technologies and bright ideas to address 'the energy problem’ are plenty, it is time to take action and solve this problem. Uncertified parts of the world, populating more than 2 billion people, are the perfect place to start building future proof energy networks that can become an inspiration and blue print to globally solve the world's energy problem.

Rural Spark's vision is to develop products that enable people to generate and trade energy from locally available, renewable resources such as sun, wind and water. These products will spark bottom-up, community owned ‘smart-grids’, linking supply and demand intelligently to supply clean, save and sustainable energy. Innovative business models will ensure profits for the whole chain and create sustainable, inclusive economies.


Summary of the issuance

Potential investors should read this summary as an introduction to the information memorandum. Every decision to invest should be based on studying the full information memorandum, including the attachments.

  • Issuing entity: Rural Spark B.V.
  • Website issuing entity: http://www.ruralspark.com
  • Type of issuance: Convertible bond
  • Issuance amount: € 200.000 Minimum - € 800.000 Maximum
  • Minimal nominal value per participation: € 20,-
  • Issue price: € 20,-
  • Conversion option: Under certain circumstances the bond can convert to shares of issuing entity
  • Conversion discount: 15%
  • Use of funds: Growth, fulfilment of orders, further business development, software development and continuous interesting product updates
  • Risk profile: High (grower existing longer than 3 years, find out more about our risk profiles)
  • Interest: 6% (single)
  • Collateral: None
  • Repayment: After 5 years, but issuing entity has option for extension of another 2 years
  • Early repayment option: No
  • Symbid costs issuing entity: 4-7% success fee (Excl. VAT)
  • Symbid costs investor: 1% administration fee (Excl. VAT)
  • Target group issuance: Retail investors
  • Expected return: Not fixed, depends on performance issuing entity

The issuing entity is offering two convertible notes: 

  • Convertible A for investors investing a minimum amount of € 100.000 who at conversion will participate directly in the share capital of the issuing entity;
  • Convertible B for investors investing an amount below €100.000 who at conversion will be issued depository receipts through a STAK. 

The issuing entity has a commitment from RVO for a recurring working capital facility of €175.000 which will be used for the purchase of inventory. Next to that, one current shareholders has committed to provide €100.000 in a loan, which funds will be part of the use of funds as described in the offering documentation. All these amounts have been included in the target amount realised, as a result whereof each additional investment within this offering is above the minimum target amount.


Unique Selling Points

  • Market size of 2.1 billion people with no or very unreliable access to energy, of which 580 million people in Sub-Saharan Africa.
  • Modular high quality solar solutions to provide energy from homes up to entire villages.
  • Customisable configurations to fit a wide range of markets and after sales.
  • Scalable product allowing users to climb the energy ladders by increasing capacity and number of appliances over time.
  • General access to energy that can power any appliance desired instead of temporary stand alone solutions like a solar lanterns.
  • Rural Spark Service platform as PayGo operator and direct service
  • Inclusion of people at Base of the Pyramid by energy access through neighbours who use the Rural Spark kit.
  • Allows for the exchange of energy surpluses between users, making the network reliable and future proof. Designed with a long term vision in mind, inspired by the potentials of modern Smart Grids.

Revenue model

Rural Spark generates revenue by selling their solar home systems to established distribution partners in large batches, with a margin of 15% in 2019 and growing to approx. 32% in coming years.


Achieved so far

  • Rural Spark has done more than 5 years of deep market and field research, including multiple extensive pilots.
  • Industrialisation of product, ahead of industry standards.
  • Professional team with over 10 years of experience in respective fields.
  • 
Initial commercial sales in Africa of € 190.000.
  • Pipeline for over 30.000 kits, worth € 6.000.000 in revenues.

Required investment and purpose

With the minimum target amount of € 200.000, we will be after paying the success fee to Symbid able to invest in the following:

  • € 66.000 to Sales & Marketing (Business development and partnerships to close deals);
  • € 30.000 to Software development (Services and local Payment integration for distribution partners);
  • € 50.000 to Improved manufacturing (Improve production setup, to reduce lead time & cost price);
  • € 40.000 to HR (Local logistic and support staff in Africa for order fulfilment);

With the maximum target amount of € 800.000, we will be after paying the success fee to Symbid able to invest in the following:

  • € 115.000 to Sales & Marketing (Increased business development and partnerships to really boost sales, and increasing focus on financial institutions and visibility);
  • € 50.000 to Software development (Services and local Payment integration for distribution partners, Credit Score Cards as an instrument for customer financing partners, and clear impact and result based management tools);
  • € 80.000 to Improved manufacturing (Improve production setup, to reduce lead time & cost price);
  • € 147.500 to HR (Local logistic and support staff in Africa for order fulfilment, + business developers to increase sales and production manager for even better procurement and planning, increasing gross margin);
  • €60.000 to Product updates (Provide additional capacity, services and connectivity)
  • €300.000 to Increase manufacturing volumes (Increase production to facilitate larger sales & offer better lead times from stock)

For the investor 

The return will be single interest of 6% on the convertible bond. Next to that in case of conversion to certificates of shares there may be dividends and/or increase in value in case of selling these certificates of shares.

Rural Spark has large ambitions with an enormous market to serve, still on a shorter term, there are several exit scenarios for future shareholders.

  • Exit through new investment: Depending on the rate of our growth, in 2021 or 2022 we foresee another large scale-up phase where we replicate our sales and marketing efforts in more structured ways in multiple markets. A series B or C investment will be required where it is very likely that we can offer our early-stage shareholders to sell their shares to the new investor. Off-grid energy companies gain a lot of attention from huge international funds (e.g. € 80 million capital raised in 2017 by M-KOPA, € 60 million capital raised by Greenlight Planet, etc).

  • Exit through strategic partnership: October 2017, the acquiring of Fenix by Engie (multinational energy company, minor shareholder Rural Spark through "ENGIE Rassembleurs d’Energies”) was one of the first series strategical partnerships by a multinational in the off-grid energy market in the emerging markets Rural Spark operates in. In the recent years more acquisitions happened (Mobisol acquiring Lumeter, Engie acquiring controlling stake in Simpa Engery India).

  • Selling shares to Rural Spark: Rural Spark will make healthy profits end of 2020 and it might be beneficial for Rural Spark to purchase shares from early-stage shareholders back into the company which can be used for staff option pools or to maintain a large controlling stake when new larger investors join in a series A round.

Risks

General risks associated with SME investing 

  • Risk of competition in markets where the issuing entity is active.

  • Negative impact through changes in rules and regulations by political decisions. 

  • Changes in macroeconomic conditions.

  • Performance of issuing entity is dependent upon functioning of board members.

  • There is a risk the issuing entity may go bankrupt.

  • Tax risks through changes in regulations, new regulations or political decisions.

Company specific risks

  • Long lead times: Manufacturing electro-solutions, certain components used in our solution can have long lead times.
  • Untapped Markets: The big opportunity in untapped markets comes with a slightly less developed infrastructure and less know distribution partners.
  • Alternative solutions: Distribution partners can switch to other solutions (if present in that market).
  • Government: Many of the governments of focus countries realise they don’t have political power and/or capability to realise the required infrastructure.
  • Delays in closing: Some of the prospects in the order portfolio are ready to buy and implement the kits, but are dealing with local financial institutions for product financing for the end users. This process can be time consuming, delaying the order realisation.

Product specific risks associated with investing through convertible bonds

  • The lender agrees that its claims against the borrower under the convertible bond agreement used on the Symbid platform rank below all other, non-subordinated, claims against the Lender as referred to in Section 3:277.2 Dutch Civil Code (‘BW’).

  • Borrower issues a (subordinated) convertible bond, which the lender can convert at a later stage to depository receipts to become a shareholder of the company. Lender expects an (exponential) growth of value of the company with the possibility to sell the depository receipts with a capital gain. However, in most situations, such capital gains do take more than an additional five years after conversion to be realized. In exchange for the possibility of a high return in case of a scenario of exponential growth of the value of the company, there is a risk the investment will be lost in case the company is not doing well. 

  • Order of payment: Payment of returns will happen after payments to creditors and redemptions have been done. There is a risk that the issuing entity has inadequate liquid assets to pay the returns. This means that (a part of) your return can't be paid, if this occurs. In case of a bankruptcy, the following payments have priority over the payments of the returns of this convertible bond: Outstanding creditors and existing loans. This means that in case of a bankruptcy the return on the convertible bond cannot be paid.

  • There is no formal secondary market for the convertible bonds, hence options for trading these convertible bonds are limited. It may be that there is no buyer in case you wish to sell your convertible bond(s). This means there is a risk you can't get your money on the desired moment and have to hold on to your investment or sell the convertible bond for a lower price.

  • Repayment in cash of the convertible bond can only be on the initiative of the borrower, taking in consideration the subordinated status applicable to the convertible bond. Also the lender agrees conversion can take place early in certain circumstances resulting in lower or no conversion discounts.

  • A conversion discount will not be applicable for lender in all conversion scenario's, this might have a negative impact on the financial return.

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Harmen van Heist
Founder, Business

Harmen is experiencde in international business, having worked with Volvo in Brasil and the Dutch Ministry of Foreign affairs. For the last 5 years, Harmen is actively involved in Base of the Pyramid business models. Has a background in organisations studies and business engineering.

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Marcel van Heist
Founder, Software & Design

Serial entrepreneur with several technical product companies and successfully running an innovative system design and software agency ‘Afdeling Buitengewone Zaken’. Marcel created the ‘Hidden Design’ method to design the Rural Spark solutions, nominated for the prestigious Rotterdam Design Price.

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Evan Mertens
Founder, Technology

The technological brain behind Rural Spark, publishing author of the vision of Rural Spark and how to make that happen with a step-by-step approach. A serial entrepreneur with several technical product companies, and consultant for Octalix, IKB group in which he was involved in implementing a smart, agent-based, comfort- and energy-management system.

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Shagun Jain
VP Partnerships

Entrepreneur with 11 years of experience in B2B business development. Former Managing Director of Vulcan Core Industries focussing on large industries (like defence and oil & gas)

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Bart Driessen
Director Operations & Branding

Business owner with 19+ years of successfully running an interactive design agency (Zinnebeeld) with focus on business strategy and operations. Also chairman of Not a Factory, focussing on refugees in Greece to become self supporting.

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Rural Spark B.V.. is a Besloten Vennootschap (BV) incorporated on 21-02-2013 and located in Tilburg. Chamber of Commerce: 57292795. The office address of Rural Spark BV is Professor de Moorplein 521, 5037 DP Tilburg.


The company website: www.ruralspark.com.

Contact person: Harmen van Heist (harmen@ruralspark.com), Marcel van Heist (marcel@ruralspark.com)

The issuing entity is managed by Harmen van Heist, Marcel van Heist & Jeroen Kromme.


Legal structure:



Rural Spark has 2 daughter organisations, one in India and one in Uganda. These are fully owned, governed and managed by The Netherlands BV and serve simply as operational entities to allow for commercial activities like manufacturing and warehousing.


The product

The Rural Spark Energy Kit

At the heart of the Rural Spark kit, it is the Rural Spark Router and Rural Spark Cubes. Connect up to 2 solar panels to the Router and it smartly manages your energy needs. It allows to power any 5V or 12V device, and automatically stores surplus energy in the Rural Spark Smart Cubes. Use them as a power station, or let the router use this stored energy automatically as soon as the sun sets. The capacity is easily increased over time, by simply adding additional solar panels or Smart Cubes.


With the router as a power station, you can power any device you want. Rural Spark provides a whole bucket of tested and approved solutions, ranging from lamps and fans, to hair clippers and Full HD TVs.


The Rural Spark energy kit looks and functions like a solar home system but is also designed to share energy. Surpluses can be exchanged with other users allowing us to not just power a household, but entire villages.

Providing rural villagers with the Rural Spark kit primarily provides them with a reliable access to clean, safe and sustainable energy. However, Rural Spark provides a bigger picture by connecting users, creating a network of entrepreneurs generating energy. Initially these links will be established through the exchange of Rural Spark cubes, over time evolving into wired connected Local Energy Suppliers. Together we will develop the smartly distributed energy solution of tomorrow.



Pay as you Go

Although Rural Spark sells directly to local distribution partners who pay for the complete kit at once, end-users can be pay for it in instalments using the inbuilt prepaid mechanism. Upon making a payment, the user receives a 16 digit code to activate the router. When the token expires, the router can't be used, triggering the next payment.


Rural Spark Service Platform

The Rural Spark kit comes with an account in the Rural Spark Service Platform in which the payment from end-user to distribution partner is managed. The platform is a modern cloud based platform to track salesforce, customer payments and analytic reports. It also allows Rural Spark to reach out to end-users of the kit directly, and have customer information of each end-user.


Best of both worlds

The Rural Spark solution provides the best of both worlds, as it is perceived as a personally owned Solar Home System, though connected, it generates the same capacity as a micro grid.

  • People own the system like with solar home systems, increasing responsibility;
  • Multiple Local Energy Suppliers generate the same capacity as a Micro Grid, in a more reliable and flexible way.
  • Low instalment costs as compared to micro grid;
  • Flexible solution, modular, and able to increase in capacity and applications.
  • Instead of having one central building with solar panels, Rural Spark offers a decentralised solution in which individual Local Energy Suppliers generate an equal amount of energy. Providing it to their fellow villagers, feeling ownership, earning income, creating livelihood and reaching even the poorest in a village without extra effort from Rural Spark and its partners. Decentralised and easy to increase village capacity while presenting itself - in size, price and ownership - as a solar home system.

Unique Selling Points

  • A modular system
: Start with an affordable entry with a basic kit, after which the modular setup of the system allows to easily increase capacity & power any device demanded.

  • Customer finance: 
The system has an inbuilt secure prepaid (PayGo) mechanism, allowing payment in instalments and loan security to financial institutions providing it.
  • Realtime sales overview
: The kit comes with modern cloud based service platform to track salesforce, customer payments and analytic reports.
  • Flexibility
: Both our products and software solutions are developed in house, creating flexibility for tailor made solutions, and an incomparable soft- and hardware synergy.
  • Power everything
: Have a special requirement the need powered? We have a team of energy experts helps our partners to provide custom power solutions.

  • Innovation: 
Being actively involved in various (externally funded) research projects to ensure next products and services fit and accelerate the upcoming global energy transition.


Revenue model

Average sales price: €190,-

Average cost-price for Rural Spark: €160,-


Rural Spark generates revenue by selling their solar home systems to established and experienced distribution partner that know their market, in large batches. A typical Rural Spark energy kit sells for €190,- and currently costs Rural Spark about €160,- to manufacture depending on batch sizes, resulting in a margin of 15% in 2019 and growing to approx 32% (cogs €135, sales price €190) in coming years.


Rural Spark provides customers with the Rural Spark service platform, an ecosystems through which Rural Spark supports it's partners in PayGo, live sales overiview, activation, after sales, etc.

These after sales, through which users can increase the capacity and functions of their kit ('Climbing the energy ladder' by adding more products to their kit) are an additional revenue stream to Rural Spark, by selling additional products.

Scalability

With an unique scalable and affordable solution that is sold to larger distribution partners directly, leveraging their operations, Rural Spark is able to scale its business rapidly. Instead of setting up (expensive) own distribution networks, Rural Spark leverages existing, established distribution networks.
This allows Rural Spark to enter new markets instead of being too invested in a specific region to rapidly enter new and an additional markets.


  • The Market approach of Rural Spark includes focussing on geographies with many non-electrified regions and little competition. 
  • Rural Spark has set up a production line at a very professional contract manufacturer that is able to scale up rapidly, and manufacture multiples of 10.000 kits per year.
  • All transactions from end-user to our partners happen over our cloud based platform, creating an ecosystem to rapidly grow operations and after-sales.
  • Rural Spark has a local team on the ground and is actively engaged in the sector meeting the right people.

Current status

In december 2018 and the beginning of 2019, the first commercial orders of €190.000 have been realised in Nigeria, DRC, Uganda and Senegal.
The current business development pipeline exceeds 30.000 kits, of which we expect to sell 11.000 in 2019, worth €2.1 million.


Rural Spark has:

  • A proven solution that has been extensively tested in the field;
  • Proven logistics with multiple successful shipments to partners in Africa;
  • Proven business (€190.000 turnover December'18 - march''19)
  • Proven customer satisfaction with access to energy

Key Milestones reached:

  • 2013: First prototypes;
  • 2013 - 2014: In debt system design & field research;
  • 2014: Successful pilots with multiple iterations & prototypes (MVPs);
  • 2015: Reliable and viable system successfully operational for over a year on small scale;
  • 2015 - 2016: Larger long term pilot with local partner, 500+ households;
  • 2016: Proof of concepts from commercial pilot;
  • 2016: Industrialisation of product, ahead of industry standards;
  • 2016: Service Platform operational;
  • 2017 - 2018: Designated production line at contracted manufacturer, able to produce large numbers;
  • 2018: Commercial revenues;
  • 2019: Agreements with 4 partners in Africa;
  • 2019: Growing pipeline of interesting business prospects worth  over 6 million.

Planned developments

  • 2019: Sales of 11.000 kits, revenue of €2.1 million;
  • 2020: Break-Even, realising profitability;
  • 2020: Cumulative sales of over 50.000 kits, revenue of over €10 million;
  • 2021: Next Generation solution (capacity, smart, data, connectivity);
  • 2021: Increased services & productivity tools;
  • 2022: Connect users smartly (blockchain);
  • 2023: Plug & Play smartly distributed networks.

Target group

Rural Spark focusses on households and micro-entrepreneurs in Sub-Saharan Africa, where 580 million people live without access to electricity.


For these people, life comes to stop after sunset. They rely on dangerous en polluting kerosine and firewood for their energy demands, resulting in a 9x more unhealthy and unsafe environment. They are excluded from formal economy and market access and sometimes spend a staggering 40% of their income on energy.


Be it for jobs, security, food production or increasing income, access to energy for all is essential.


Market size

2.1 Billion people live without access to electricity, while another billion have only very unreliable access to energy.

The demand for basic electrical services will increase rapidly (to compare, energy demand is expected to increase with +160% in Sub Saharan Africa by 2040, and +6% only in Europa by 20140) and cannot be (affordably) provided by the centralised grids. Due to population growth in off-grid areas, the number of households for who life comes to a stop after sunset, is still increasing, resulting in an enormous increase in energy demand to be fulfilled. 

So two main forces are at work here, growing the market size still. First general energy demand is increasing while at the same time the population growth is increasing, especially in underserved geographies.

Market size:

  • 2.1 billion people with very unreliable access to electricity;
  • Growth of 80% - 90% 
in the solar home segment;
  • 6 - 7 billion USD market size
in annual revenues;
  • 20 - 25 million units, 
annual sales by 2020.

Focus market:

  • 580 million people with very unreliable access to electricity;
  • 160% increase
in energy demand in 2040;
  • 3 billion USD market size in kerosine spendings alone;

Market approach:

  • Rural Spark primarily targets the large number of underserved countries
 currently barely served;
  • Largest population growth in untapped markets, and growth is mainly happening in unnelectrified areas;
  • Huge markets, with for example only 1% of the people being connected in DRC, with 60 million people and only 500.000 connections.

Source: Gogla Off-Grid Solar Market Trends Report 2018

Source: World Energy Outlook

Competition

Typical solutions offered today consist of Solar Home Systems and MicroGrids. The solution of Rural Spark presents itself as a Solar Home System (affordable, personal ownership, low maintenance, plug&play) but can offer the same features as a micro grid (shared resources, energy as utility and able to increase capacity). Next to that, the Rural Spark solution is modular, allowing users to climb the energy ladder. It also supports the usage of new devices.




On the market, there are only 7 other players that sell Solar Home Systems that are Lighting Global Certified and Rural Spark is about to become the 8th. Of these 7 players, no solution is as modular as the solution of Rural Spark. Next to that, Rural Spark sets itself apart by being an integrated business partner, offering a complete solution to distribution partners. Our team helps our partners to supply their local communities exactly the product that the market asks for. If needed our technical people help sourcing the right appliances and adept them to fit our energy kits. This is a unique service Rural Spark is offering local distribution partners.

Some of the important competitors with their own product solutions are Bboxx and Azuri. Having their own distribution networks, they are highly invested in certain geographies in which they have larger market shares. Rural Spark, leveraging the capacity of existing distribution partners is ably to quickly enter new promising markets and focuses on these. Other competitors like Mobisol and Angaza focus more on their platform and use a relatively 'simple' product. Here Rural Spark sets itself apart by offering a solution that really fits the market of the distribution parters we work with.

None of the players in the competitive landscape works on the vision of linking supply and demand, key in developing the smartly distributed energy networks of tomorrow.

Customer feedback

Nigeria

In Nigeria we work with a company backed by seasoned entrepreneurs, industry experts, financial services and technical professionals and known businessmen of the country. They are eradicating darkness and lightening up Nigeria through the provision of distributing solar kits to the largest African country that has been living in abject darkness for several decades without any assurance of constant electricity.

Their commitment is to take renewable energy to the group least served and mostly in need of power through the provision of convenient and flexible options. As an organization that is people-driven, they are poised to make a lasting statement in the energy sector. Renewable energy industry is the way to go in Nigeria and our partner aims to lighten up a minimum of one million homes and small businesses in Nigeria by the year 2024 using solar energy kits.


Democratic Republic Congo (DRC)

Our DRC partner enables its customers to replace dirty, expensive, unreliable sources of energy with clean, affordable, reliable energy solutions, leading to significant improvements in their income, health, education and environment. They are DRC’s largest and most reliable network for the distribution of solar products. Have successfully sold more than 120,000 solar products and affected more than 500,000+ lives. They plan to install more than 150,000 solar kits on PayGo in the next three years.


Uganda

The mission of our Uganda partner is to provide solutions to people who don’t have access to power. Their business model is to serve both low-end and high-end consumer. They operate like a supermarket. They want people to walk into the shops and choose the solar products they want, being present in 50 major towns of Uganda. For a start, the company will have five dealerships/shops in Kampala and thirteen other cities. They are on an accelerator program with Power Africa, USAID. They are also deeply involved in electrifying schools across Uganda. They have tie-ups with various local banks and MFI's to provide consumer financing loan to the end consumer. They are looking for working capital for rotating the capital to purchase our SHS kits and selling in the local market. They have plans to install 30,000 kits in the next 18 months.


Senegal

Our Senegal partner is a full-service provider of electrical consulting and engineering. It's main strangest lie in its knowledge of planning and knowing the energy market, and their infrastructure in these markets.

Customer feedback

Some of our clients, distribution partners, mentioned:

“The model and customer segment you are targeting contributes to our product portfolio,
reaching a larger customer segment with a innovative model that allows for rental.” - Anoop Kaul, director at Basix Group

and

"Your product is able to reach the lowest segment of the base of the pyramid,
 I have not yet seen a product do that. It’s incredible." - Ashwin Kurian, Product Development Leader - Customer Experience and Insights, Engineering, R&D and Quality
Simpa Networks


The real impact of our solution, however, is best visible in the village itself, where people have access to energy for the first time in their lives. Life doesn't stop at sunset anymore. Some women working with the kit, indicated being proud of the village being lit by their lamps. Other families indicated the importance of connectivity through phone and TV, allowing them to understand the best market prices and local politics. Some of the remembering anecdotes include: One women decided to rent out the additional rooms in her house to students to study after sunset. Lit by the Rural Spark lights, she facilitated studying. Another micro-entrepreneur shared with us how he lights up the local cricket match every evening, powered by the Rural Spark kit. And in Nigeria, several barbers now power their hair clippers using the Rural Spark kit. You can now get your solar powered haircut in Nigeria.

Moreover, feedback goes beyond practical impact. Socially, people using the Rural Spark solution mention the role they play in the village, providing fellow villagers with electricity: "Villagers come together at the house of this entrepreneur daily. When a wedding is planned, a person used to drive on his bike through the village to announce this wedding. Now, this all happens at the house of this entrepreneur where villagers come to get their products like phones and lamps charged".


New customers

2019 Prospects:

  • Nigeria: 6.900 kits
  • DRC: 1.300 kits
  • Uganda: 2.200 kits

  • Senegal: 4.700 kits
  • Ivory Coast: 4.000 kits
  • Benin: 1.000 kits
  • Kenya: 3.500 kits
  • 
Burundi: 1.550 kits
  • Rwanda, Ghana, Sierra Leone, Togo, Senegal, Liberia: 7.000 kits (in total) 

Sales pitch

For people in Sub-Saharan Africa who have no access to electricity it is a continuous struggle to continue life after sunset, increase their productivity or have access to the market. Every day they go live, work, study, sleep, entertain themselves, and keep themselves save without electricity to live and create a livelihood. This is primarily true for people without access to electricity who ho do have some money to spare, have the aspiration for increasing livelihood, productivity or status.


The main problem they experience is the lack of access to reliable energy sources and/or financial infrastructure and ecosystem to obtain and maintain them while often spending up to 40% of their income on polluting alternatives, which leads to remaining without access to electricity, which is so essential for any type of development. Currently, their best option is to rely on polluting resources like kerosine and firewood, often obtained on the black market or through corrupt networks.Other alternatives are Chinese products that offer a temporary solution, or waiting for NGO programs to provide philanthropic solutions. However, most of these alternative solutions are of poor quality, and do not allow them to charge their phone, power a fan in hot summers or climb the energy ladder to power a wide range of devices.


If there would be a reliable access to clean, safe and sustainable energy that is affordable and is able to provide in the growing energy demand to live, work, study, sleep, entertain themselves, and keep themselves save, then for customers to have access to electricity leads to life continuing after dark, increase of productivity and environmental health, and a world of opportunities opens up.

With 580 million people in Sub-Saharan Africa alone, of which Rural Spark aims to reach over 50.000 in 2019 and 1 million in the next 5 years, there is a large opportunity to realise valuable impact for a huge number of people. And, with Rural Spark, basic access to electricity is just the start. Let’s grow the energy networks of tomorrow.


They key pitch includes:

  • Modular high quality solar solutions to provide energy from homes up to entire villages.
  • Customisable configurations;
  • Scalable product allowing users to climb the energy ladders by increasing capacity and number of appliances over time;
  • General access to energy instead that can power any appliance desired instead of temporary stand alone solutions like a solar lanterns.
  • Rural Spark Service platform as PayGo operator and direct service;
  • Inclusion of people at Base of the Pyramid by energy access through neighbours;
  • Allows for the exchange of energy surpluses between users, making the network reliable and future proof, based ont he concept of Smart Grids.

Our product brochure can be found at our website: Rural Spark Product Brochure.


What has been done before

In december 2018 and the beginning of 2019, the first commercial orders of €190.000 have been realised in Nigeria, DRC, Uganda and Senegal.
The current business development pipeline exceeds 30.000 kits, of which we expect to sell 11.000 in 2019, worth €2.1 million.

Marketing & sales channels

Distribution companies
Instead of setting up (expensive) own distribution networks, Rural Spark leverages existing, established distribution networks.
This allows Rural Spark to enter new markets instead of being too invested in a specific region to rapidly enter other markets.


Banks, financial institutions and electrification funds

Rural Spark also focusses on financial institutions (like Micro Finance) that are expanding their portfolio and look for products they can sell to provide a loan with.


NGOs and Governments

NGOs present in rural areas for development programs, expanding their portfolio with electrification solutions are also on the radar of Rural Spark, as are governments. These channels are often slower, and thus have not the priority of Rural Spark.


Market approach.

Be Present and get found

Rural Spark has a local team on the ground that is actively engaged in the sector, meeting the right players. Being able to move rapidly allows to answer to financial programs of local funds, banks and development programs for electrification together with local partners.

Being tied up with global implementation partners and branche organisations (e.g. Gogla) and leveraging local PR of our local distribution Partners, Rural Spark increases visibility.


Focus on high potentials

With a focus on markets with many non electrified regions and little competition, Rural Spark taps into a huge untapped market. We also focus on our unique proposition, by adding our solution to the product portfolio of existing distribution companies but also promising upcoming players with innovative approaches, fitting our proposition.


Deal makers

Some of the deal makers of Rural Spark include:

  • Custom made solutions: sourcing & improving the best appliances to specific market demands is a huge plus for distribution partners serving their markets;
  • Samples: Seeing is believing
  • No competition: as we don't do last mile distribution, we are not a competition to distributors, as compared to most other product companies who also distribute themselves;
  • Co-branding: glowing partners to build their brand as well;
  • Globally integrated software platform: custom software integrations to fit operations and regional payment platforms, while providing financial management and easy after sales. We offer this for free, creating a strong partnership within our own ecosystem.


Marketing objective

Rural Spark is a company that has a broader vision than simply access to electricity, as we believe we can - with the same effort - build the right energy networks that gives users access to reliable and sustainable energy.


Rural Spark leads the way towards this new utility-market. Rural Spark sets out to create new models together with partners. From one-way distribution to a peer-to-peer network. From a sales model to a service model. From a temporary solution to a future proof solution that can develop along with the development of the context. From commodity to utility.


Uncertified parts of the world, populating more than 2 billion people, are the perfect place to start building future proof energy networks that can become an inspiration and blue print to globally solve the world's energy problem. Rural Spark works on that, while providing people with a viable, strong solution that provides them in todays needs already.


Partnerships

Key Partners:

  • SGS Tekniks (contracted manufacturer)
  • Gogla (branche organisation);
  • Engie Rassembleurs d'Energies, DOEN Foundation, ElectriFI (European Union), Village Capital
  • Network of Dutch Embassies and Entrepreneurs Center (RvO)
  • SNV
  • PRE Power Developers
  • Brabantse Ontwikkel Maatschappij
  • Netherlands Organisation for Scientific Research


Turnover so far

The issuing entity is active since 2013. The following financial information is the most recent information available.

P&L

The following information applies to the financial year 2018 and is the most recent available information:

  • Revenues: €8.728
  • Direct cost: €86.763
  • Indirect cost: €23.261
  • Amortisation of intangible fixed assets: €44.345
  • Amortisation of financial fixed assets: €153.272
  • Interest receivable and similar income: €10.539
  • Net loss from ordinary activities: -€288.374
  • Share in the results participating companies: -€150.000
  • Result after tax: -€438.374

Balance sheet

The balance sheet date of this information is 31 December 2018:

Total equity equals -€402.720 and consists of:

  • Issued capital: €168
  • Share premium account: €600.662
  • Legal reserves: €463.235
  • Other reserves: -€1.466.785

Total liabilities equals €1.031.139 and consists of:

  • Non-current liabilities: €809.168

  • Current liabilities group companies: €111.252

  • Current liabilities: €110.719

Working capital equals -€92.264 and consists of:

  • Trade and other receivables: €17.787
  • Cash: €668
  • Current liabilities: -€110.719

Re-structuring of non-current liabilities in April 2019

In April 2019 a restructuring of the non-current liabilities was concluded, which was also included in the annual accounts 2018 and explained as follows:



Situation after issuance convertible bond

The following information is about the situation after issuance of the securities offered in this investment round. The equity/debt ratio is 0/100. After the issuance of convertible bond with the minimum target of €200.000 this ratio equals 0/100. After the issuance of the convertible bond with the maximum amount of €800.000 this ratio will be 0/100.

Working capital equals €107.736 (assuming minimum target amount of €200.000) or €707.736 (assuming maximum target amount of €800.000) and consists of:

  • Trade and other receivables: €17.787
  • Cash: €200.668 or €800.668
  • Current liabilities: -€110.719
In addition to the working capital described above there will be additional working capital through a recurring working capital facility with RvO of €175.000.


Securities

The issuing entity has provided no securities to the investors in the convertible bond. However securities have been provided to other current creditors.


Projected turnover

In the base case scenario we project the following revenues:

  • 2019: €2.100.000 (11.000 kits)
  • 2020: €7.800.000 (40.000 kits)
  • 2021: €14.500.000 (75.000 kits)
  • 2022: €28.000.000 (145.000 kits)

Assumptions

  • With a business development pipeline of over 30.000 kits (worth over €6.000.000) we expect to sell approximately 11.000 (worth approximately €2.100.000 turnover) in 2019. From 2020 onwards we expect growth to increase slightly per month, with increasing repeat orders and additional partnerships coming in, to 40.000 kits in 2020. With a sector growth towards 20 - 25 million kits sold in 2020 and Rural Spark becoming the 8th certified player, this should be absolutely feasible.
  • With continues effort in improving our production planning, procurement and economy of scale, Rural Spark has reasons to believe costs of goods sol can go down from €160 / kit in 2019, to €143 / kit in 2021
  • With our contract manufacturer, payment conditions of 30% advance upon order placement, 70% balance upon delivery, have been agreed on.
  • With all partners, Rural Spark agrees to payment conditions of 30% advance upon order placement, 70% balance before shipment.

Invested so far

  • €902.000 in equity;
  • €310.000 in convertible loans;
  • €720.000 in grants;
  • €100.000 project financing.

Investment requirement

Rural Spark is seeking capital of €200.000 to €800.000 to scale business and fulfill the growing sales-order portfolio. This allows Rural Spark to generate significant revenues (> €2.000.000) to further grow the business and reach break-even, after which significant growth is expected.


To finance a growing stock, Rural Spark is also attracting €475.000 for asset financing (loan), of which €175.000 is already provided by RvO at a 0% interest rate.

Purpose of investment

With the minimum target amount of €200.000, we will be after paying the success fee to Symbid able to invest in the following:




  • €66.000 to Sales & Marketing (Business development and partnerships to close deals);

  • €30.000 to Software development (Services and local Payment integration for distribution partners);


  • €50.000 to Improved manufacturing (Improve production setup, to reduce lead time & cost price);


  • €40.000 to HR (Local logistic and support staff in Africa for order fulfilment);


With the maximum target amount of €800.000, we will be after paying the success fee to Symbid able to invest in the following:





  • €115.000 to Sales & Marketing (Increased business development and partnerships to really boost sales, and increasing focus on financial institutions and visibility);

  • €50.000 to Software development (Services and local Payment integration for distribution partners, Credit Score Cards as an instrument for customer financing partners, and clear impact and result based management tools);


  • €80.000 to Improved manufacturing (Improve production setup, to reduce lead time & cost price);


  • €147.500 HR (Local logistic and support staff in Africa for order fullfilment, + business developers to increase sales and production manager for even better procurement and planning, increasing gross margin);


  • €60.000 to Product updates (Provide additional capacity, services and connectivity)


  • €300.000 Increase manufacturing volumes (Increase production to facilitate larger sales & offer better lead times from stock)

Return

Interest

The return will be single interest of 6% on the convertible bond. Next to that in case of conversion to shares (Borrowers-A) or certificates of shares (Borrowers-B) there may be dividends and/ or increase in value in case of selling these shares or certificates of shares.

Conversion

Each investor can convert his/ her full investment to shares or certificates of shares via a STAK (Stichting Administratie Kantoor) of the issuing entity in all situations in which:

  1. The convertible bond becomes payable.

  2. The issuing entity issues equity to one or more third parties for a total consideration of at least €600.000.

  3. A transaction is executed as a result of which one or more third parties will become a shareholder for more than half of the outstanding shares in the issuing entity.

  4. The initial or extended duration of the agreement will expire within a month.

Conversion discount

As a borrower-A in the convertible bond, you will receive shares in the issuing entity and as a Borrower-B you will receive certificates of shares in the issuing entity on the same terms as a follow-up investor, but with a discount. This is to reward investors for the fact that you have invested already at an earlier stage. The discount applied in case of a conversion will be 15% flat. 

A valuation cap of €6.000.000 will apply in case the next qualifying financing round takes place at a higher valuation than this valuation cap. 

The lender will receive single interest for the duration of the convertible bond over the initial loan amount. This amount will not be paid but is accumulated to the initial invested amount and paid out when the loan will be repaid or converted to shares or certificates of shares.

Redemption of the convertible bond can take place at the initiative of the issuing entity, at the end of the duration, and only of the issuing entity is capable of doing so.

The return will not be paid from the investments of other investors.

Next to the investors there are no other persons who receive income (other than "costs") from this investment.


Exit scenarios

Rural Spark has large ambitions with an enormous market to serve, still on a shorter term, there are several exit scenarios for future shareholders.

  • Exit through new investment: Depending on the rate of our growth, in 2021 or 2022 we foresee another large scale-up phase where we replicate our sales and marketing efforts in more structured ways in multiple markets. A series B or C investment will be required where it is very likely that we can offer our early-stage shareholders to sell their shares to the new investor. Off-grid energy companies gain a lot of attention from huge international funds (e.g. €80 million capital raised in 2017 by M-KOPA, €60 million capital raised by Greenlight Planet, etc).

  • Exit through strategic partnership: October 2017, the acquiring of Fenix by Engie (multinational energy company, minor shareholder Rural Spark through "ENGIE Rassembleurs d’Energies”) was one of the first series strategical partnerships by a multinational in the off-grid energy market in the emerging markets Rural Spark operates in. In the recent years more acquisitions happened (Mobisol acquiring Lumeter, Engie acquiring controlling stake in Simpa Engery India).

  • Selling shares to Rural Spark: Rural Spark will make healthy profits end of 2020 and it might be beneficial for Rural Spark to purchase shares from early-stage shareholders back into the company which can be used for staff option pools or to maintain a large controlling stake when new larger investors join in a series A round.

Risks

For an extensive explanation of the risks please have a look at the Risk section under "summary" at the top of this page


Declaration issuing entity

No significant changes

Since the most recently published Financial Statements of the issuing entity, no significant negative changes have occurred in the issuing entity’s prospects.


Trends

There is no information about known trends, uncertainties, requirements, obligations or events that can reasonably be assumed to have material consequences for the prospects of the issuing entity, for the current financial year.


No significant alteration in the financial or trading position

Since the most recently compiled and published Financial Statements of the issuing entity, there has been no alteration of tenor in the financial or trading position of the issuing entity and the group to which the issuing entity belongs.


Corporate Governance Code

As the Dutch Corporate Governance Code only applies to companies with registered offices in the Netherlands, whose shares or certificates of shares are admitted to the official listing of a government-approved regulated market (securities exchange), the issuing entity (unlisted) does not apply this code.


Potential conflicting interests

There are no (potential) conflicts of interests between the obligations of the executive board members of the issuing entity on the one hand, and their own interests and / or other obligations on the other.


Procedures

There are no government interventions, court cases, or arbitrations, including such procedures that are pending or may be initiated, to the best of knowledge of the issuing entity, over a period of at least the previous 12 months that may have a significant impact, or have recently had, on the financial position or profitability of the issuing entity or the group to which the issuer belongs.


Figures

All figures in this information memorandum are not audited, unless explicitly stated otherwise.


Symbid and the platform

Some Background Information on Symbid

Symbid's operations largely consist of the acceptance and disclosure of orders for retail, wealthy, and professional investors. Through its activities, Symbid supports the interaction between affected investors and progressive start-ups and growing companies in the SME in the Netherlands. This involves the financing of various types of projects that realize a positive impact the society with the help of an affected group of investors or ambassadors. Our platform provides a non-personalized, online recommendation to a broad audience, by allowing organizations to profile their project in a transparent and financially sound manner, and to professionally build and maintain the relationship with its financiers / investors.

Tied agent

Symbid Cooperation UA is a tied agent of the Limited company (Besloten Vennootschap), Ilfa Tools & Services B.V. as defined in the Dutch Act on Financial Supervision (Wet op het financieel toezicht (Wft)). Ilfa is an investment firm as defined in the Wft and has a license  as defined in article 2:96 Wft. As a result hereof Symbid and Ilfa are both under supervision of the AFM.


Other parties involved with issuance

During the issuance, the following legal entities play an important role:

  • Symbid Crowdfunding, a trade name of Symbid B.V, a limited liability entity, registered in Rotterdam, office at Marconistraat 16, Rotterdam, and registered in the commercial register of the Chamber of Commerce under number 52466825;

  • Rural Spark B.V.: a limited liability entity which is the issuing entity;

  • Intersolve EGI B.V: Symbid has a partnership with Intersolve - First European E-money Trust - a Dutch financial institution that specializes in providing services in the field of settlement of payment transactions and electronic money. In order to be able to offer its financial services in accordance with the applicable financial legislation and regulations, Intersolve has a license as Electronic Money Institution and Intersolve is supervised by De Nederlandsche Bank (DNB) plus the Netherlands Authority for the Financial Markets (AFM).