PayGo Energy is a venture-backed technology company based in Nairobi, Kenya. The company is an early innovator in Pay-as-you-go (PAYGO) smart meters for liquified petroleum gas (LPG) and supply chain software. After initially piloting a business-to-consumer (B2C) model, PayGo Energy pivoted to a business-to-business (B2B) model, supplying hardware and software to LPG distributors. Recently, the company formed strategic partnerships with Saisan, a Japanese conglomerate, and BBOXX, an off-grid energy company based in sub-Saharan Africa.
PayGo Energy CEO, Nick Quintong, recently spoke with Shrikant Avi, CCA’s Venture Catalyst Senior Manager, about what these partnerships mean for the future of the company and their contribution to scaling up clean cooking solutions.
This interview is part of a series of conversations CCA is having with business leaders from markets around the world and across the clean cooking sector.
Shrikant Avi (Avi): Can you describe PayGo Energy’s products and services and what benefits they bring to customers?
Nick Quintong (Quintong): We build hardware and software solutions for downstream LPG distributors, with a focus on developing markets. We think our technology can solve two inter-related problems: (i) making clean cooking affordable and accessible for low-income households; and (ii) making the supply chain more efficient and expansive.
We have two core products. The Cylinder Smart Meter (CSM) is an Internet-of-Things device that attaches to most LPG cylinders, and accurately measures gas flow as customers use it for cooking. The CSM enables customers to purchase gas in any amount, using mobile money, and automatically shuts off when a customer’s credit reaches zero. By breaking down the cost of an LPG cylinder into smaller payments, we’re matching the way gas is sold to the way consumers in developing markets typically earn and spend their incomes.
Our other product is Tag & Trace, a software platform that digitizes LPG distribution and retail data. The platform is fully customizable, with a range of features including cylinder tracking, inventory management, customer relationship management, and payments. We see significant scope to eliminate waste in the LPG supply chain through digital applications, and it is our hope that, ultimately, those savings will be passed on to the consumer.
Avi: PayGo Energy recently partnered with the Japanese conglomerate Saisan. How did this come about?
Quintong: After initial discussions with Saisan’s leadership team, it was clear we had a shared vision for how we could work together to crack key challenges in expanding the addressable market for LPG. Also, the timing was right: we had been assessing a couple of key markets in Asia from a distance but had not yet found the right partner on the ground. Saisan’s LPG brand, Gas One, has operations throughout Asia and is an ideal downstream partner, so it all made a lot of sense.
Avi: What makes PayGo Energy attractive to a company like Saisan?
Quintong: LPG is a hyper-competitive industry. Companies like Saisan are constantly looking for opportunities to strengthen their position within operating markets and to expand into new geographies. PayGo’s technology is attractive because it creates opportunities to do both – Saisan can deploy our technology through existing operations to provide a better, more efficient service, and they can also use it as a tool to enter new markets.
In addition, while companies like Saisan have a broad footprint, they don’t currently have a lot of data about their customers or even their own supply chain. We have information flowing from the distributor, to the retailer, down to the household, which we’re piecing together to create a complete view of their business, or “virtual pipeline.” Long term, we believe this increased flow of information will unlock a whole range of new opportunities, from efficiency gains, to new business models and product offerings. We’ve just skimmed the surface of what’s possible.
Avi: How will Saisan’s investment and broader partnership support PayGo Energy’s growth strategy?
Quintong: This was our first deal in Asia, and almost overnight we acquired a strong pipeline of potential partners in high-impact markets. Saisan is the perfect springboard for us in the region. They have deep institutional knowledge of the sector, established LPG distribution and retail infrastructure across multiple markets, and a willingness to test – and, if successful, to scale – new and innovative technologies.
We’ve kicked off two pilots and we’re already seeing the benefit of the relationship. Without strong, local implementing partners, our model doesn’t work.
Avi: PayGo Energy also recently entered into a strategic partnership with BBOXX, a next-generation utility. Why is this significant?
Quintong: BBOXX originally focused on manufacturing and distributing in-home solar systems and is now looking to leverage its retail network to add PAYGO LPG to their product line. Their ambitious plans to grow LPG in underdeveloped markets and to strengthen connections with households align well with the PayGo ethos.
The partnership with BBOXX is initially focused on the Democratic Republic of the Congo (DRC). We believe the DRC is a high-potential market for PAYGO, with significant need (just four percent of the population has access to clean cooking facilities); high population density (six urban areas have populations of over 1 million people); and growing investment in the LPG supply chain (including from leading commodity trader Trafigura, which also has a partnership with BBOXX).
Avi: How critical is the pivot to a B2B partnership model to PayGo Energy’s future strategy?
Quintong: It is absolutely critical. If we can’t reach sufficient scale, the economics won’t work, and we won’t achieve the impact we’re chasing. But we’re also a startup, meaning we need to be efficient in how we achieve that scale.
By partnering with companies that have an established operational footprint in our priority markets, we can rapidly deploy smart meters without investing in LPG distribution and retail infrastructure. It also means we can build a global footprint while still maintaining a lean, centralized team. That doesn’t mean we hand over our hardware and say “see you later” – effective partner onboarding and support is super important – but it does enable us to focus on the technology and leave the rest to our partners.
We’re not interested in scaling a traditional LPG business. We initially tried going down that path, but it was too operationally intensive and there are other folks out there who execute that model with a lower cost base. Our current business model enables us to focus on building great hardware and software and supporting our partners to execute to a really high level. So, for us, other LPG companies are potential partners, not competitors.