SPOUTS of Water: Overview & Path Forward
The Problem: Unclean drinking water has major negative health, economic, and social ramifications for Uganda Over 50% of Uganda’s 44M population drinks untreated water and another 44% boil water daily in order to sanitize it, creating numerous issues: Health: #2 killer of children 1 under 5 in Uganda (exceeds Malaria and AIDS) Productivity: $170M USD loss 2 in annual productivity Livelihood: 85% of time treating 3 water spent by women & children 4 Environment: 360M tons CO 2 from boiling water annually These trends can only be reversed through widespread behavior change and adoption of a sustainable water treatment option. 1
The Solution: SPOUTS produces the Purifaaya filter line – the only locally made water filters in Uganda Purifaaya Household Purifaaya XL 20 liter capacity (serves 10) 65 liter capacity (serves 50) Retail price of 90,000 UGX (~$25) Retail price of 300,000 UGX (~$83) 2
The Solution: The Purifaaya is an effective and locally produced solution …and is produced in our factory right The Purifaaya ceramic water filter effectively eliminates 99.9% of bacteria… outside of Kampala SPOUTS factory in Nakawuka, Uganda Anatomy of the Purifaaya One of 15 factory workers helping produce the ceramic water filters 3
The Solution: By locally manufacturing ceramic filters, SPOUTS provides a sustainable solution to Uganda’s needs Effective Convenient Cost-efficient Sustainable Designed with the “consumer -in- Proven 99.9% effective by the Only filter produced in Uganda from Integrated into local economy to mind” to ensure low maintenance Uganda Ministry of Water and locally sourced materials to create staying power Environment and enjoyable taste guarantee affordability Ceramic filter before firing Family enjoying Purifaaya water Local production worker making ceramic filters Customer tasting Purifaaya at Vine Pharmacy • Microscopic holes in the • Filter lasts for 2-5 years • 99% of raw materials are • 80% of commercial sales filter remove bacteria and requires low sourced from Uganda sold through our from water maintenance (simple innovative Direct-to- cleaning every ~2 weeks) Consumer (D2C) Sales • Local production limits model • Silver nitrate coating transportation costs and • ~90% of our staff are • Semi-translucent bucket ensures water stays pure stimulates the economy allows easy monitoring of Ugandan, and this percentage is growing water level and prevents recontamination 4
History: SPOUTS has built the foundation for a strong business over time • 2012 – Original factory is opened to pilot production of filters • 2014 – Kathy and John finalize design for ceramic filter • 2015 – First commercial sales are made “Drinking” water collected by a child in Western Uganda Purifaaya on sale at a D2C presentation Inception Pilot Fundamentals (2010 – 2014) (2016 – 2018+) (2015) • New factory opened, with an annual capacity of ~100K filters • 2010 – Kathy Ku interns in Uganda • New D2C Sales program offers an and is struck by the lack of access innovative financing program to safe water making the product even more • 2011 – Kathy teams up with fellow affordable Harvard student John Kye to start • Manufacturing process SPOUTS of Water streamlined to reduce costs and enable 40-50% gross margin Original factory 5
Our impact to date: Below is our impact to date, with significant growth in 2018 32,000 15,000 17,000 180,000 110,000 tons 78 filters sold commercial sales aid installations impacted CO 2 reduction total staff +15% +25% +17% +75% Int’l 10% Equivalent to the 3.0k 11.6k 3.5k 175k 90% 9.4k 7.5k 100k exhaust from 6.5k Local 90,000 vehicles 2017 2018 2017 2018 2017 2018 2017 2018 driven for one year SPOUTS is SPOUTS projects to sell over 13,000 SPOUTS is 40% of on-the-ground projecting to sell filters and 10,000 filters through its projecting to reach leadership roles filled over 23,000 filters commercial and aid channels, over 300,000 end- by local staff in 2019! respectively, in 2019! users by the end of 2019 Source: Internal Sales Data as of June 30, 2017, Ignosi Purifaaya impact assessment, WHO Image Source: The Noun Project 6
What’s Next: SPOUTS’ goal is to provide clean water to over 5 million East Africans in our first decade Targeted # people using the Purifaaya (cumulative) 10M 10M 5M 5 500k 0 Scale (by 2020) Expand (by 2025) Lead (2026+) Scale Expand Lead (2020 – 2025) (2019-2020) (2026+) • Expand into greater East Africa • Expand into WASH advocacy • Develop sustainable business - - - Open additional factory, distribution Partner with other WASH-focused NGOs Increase production efficiency centers, and offices in strategic locations and social enterprises to develop and - Expand sales & marketing efforts in East Africa implement education and awareness - Diversify commercial sales channels - programs worldwide Scale D2C and other sales channels in - Establish distribution points the new locations • Become a worldwide resource • Demonstrate increased impact • Adjust business model to reflect for best practices on effective - Secure Carbon financing accreditation needs of new footprint and scale water usage - Invest in software to better track impact - Become a platform for researching, • Consider alternative products to - Establish full-time customer service disseminating, and adopting WASH best expand footprint in water / health department to track customer satisfaction practices including filter development, • Drive innovation in water space care space (e.g., filter water bottles, education programs, etc. industrial sized filtration) - Develop new water filtration products - Diversity product offering 7
Investment Plan: SPOUTS has identified a series of 8 projects across 3 major areas to achieve profitable scale H2 2018 2019 2020 2021 Increase production efficiency Streamline PV data collection & sharing Realize and enhance value Build sustainable business Streamline PV data collection & sharing Realize and enhance value operations Develop sustainable business Enhance awareness and understanding among users Improve distribution network and demand levels Secure additional Streamline PV data collection & sharing accreditation, including Adapt and improve Demonstrate carbon credits increased impact Expand capabilities of impact assessment Streamline PV data collection & sharing Drive Begin building foundation to become leader in Diversify product and sales channels offering Streamline PV data collection & sharing innovation innovation for water in East Africa over next decade Target profitability by 2019 8
Our team: Over 75 local and international staff work on the ground in Uganda across our factory and headquarters Founders Leadership Team Kathy Ku Daniel Yin Michael Nimoh Cofounder & Executive Director Chief Executive Officer Sales Director Kathy holds a B.S. in Cellular and Molecular Biology Has led SPOUTS for the past almost two Michael has over 5.5 years experience and an M.S. in Engineering Science from Harvard years. Prior to joining, Daniel spent 2.5 working in Strategy and Sales in India and University. She worked at BCG and McKinsey years at Deloitte and another 2.5 years Tanzania prior to joining SPOUTS. before heading production at SPOUTS. working in Finance. John Kye Moses Okeny Dominic Lyando Dan Gee Cofounder & Executive Director Accounting & Finance Manager Production Manager After-sales Manager Before joining SPOUTS, Dominic worked for Wheatco. Dan has over 5 years Moses worked for Platinum Industries Limited before working in the UK, focusing Credit Limited joining SPOUTS. on logistics and NGO John studied Economics at Harvard University operations before moving to Uganda in 2014 to head the Sales & Marketing Team. 9
Thank you for your interest in SPOUTS of Water! 10
Appendix 11
Path forward - Sustainability: Investments to focus on production efficiency, sales capacity, and work environment Targeted focus areas across 4 workstreams... ...lead to future vision Transition from gas to Reduce failure rate and Increase Upgrade critical electric equipment to carbon footprint to bring production equipment to reduce carbon down financial and reduce failure rate efficiency contribution of factory environmental costs ... Build Restructure Grow local Implement Hire experienced, local sustainable compensation staff base, best-in-class staff in long-term to attract especially in systems (e.g., office contracts and upgrade best talent leadership HR, Payroll) SPOUTS systems environment Shift from low market Conduct Roll out demos Scale up Enhance wide-scale and education sales team for awareness to top of mind awareness & media campaign in nationwide brand recognition in understanding campaign priority districts coverage water purification space Improve Grow Scale Expand Expand distribution distribution salesforce for number of existing network to reach all nationwide distribution network & partnerships Ugandans coverage points demand levels Funded Partially funded 12
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