180 Degrees Consulting Natfort Energy Bridges for Enterprise Final Presentation
The 180 Team Allison Arena Kat Lu Client Lead Engagement Lead Economic Consulting and Finance and Business Public Policy Analytics Cole Tamondong Grayson Faircloth Consultant Consultant Economic Consulting and Finance and Computer Business Analytics Science Matt Begley Rachel Stuto Consultant Consultant Economic Consulting and Finance and Accounting Public Policy
PRESENTATION INTRODUCTION AGENDA PAYGO PARTNERSHIP FINANCING REVENUE PROJECTIONS CONCLUSION
Recap of Mid-Semester Review Project Scope and Deliverables Expand Zimbabwe PAYGO Partnerships Customer Base Competitor Partnership Criteria o o Benchmark Pricing Partner o Bundling Recommendation o 01 Develop PAYGO Comparable Case Pitch Book o o Studies Explaining Natfort’s Pricing Structure Increasing Customer Value-Add o Lifetime Value Financing 02 Legal Advice on Forming Financing Criteria Partnerships o Financing Recommendation o Advice For Securing Funding o
Major Events Various developments modified our strategic trajectory. ECONET DEAL NETONE MEETING AMPED INNOVATION EcoNet, Zimbabwe’s largest Meeting with the NetOne Head of Innovation called for Amped Innovation expresses mobile telecommunications the creation of documents containing a brief introduction to interest in partnering, leading to corporation invests $250 million PAYGO, partnership structure, Natfort’s value-add, and a joint pilot product line. in solar power systems. market sizing. REQUEST FOR FINANCIALS EEP – NEW ROUND OF FUNDING Financials centering on potential Energy and Environment Partnership Trust Fund revenue through PAYGO to “[provides] early stage grant and catalytic enrich Natfort’s proposal to financing to innovative clean energy projects, NetOne. technologies, and business models” which is a great fit for Natfort.
Final Deliverables 01 02 03 04 PAY-AS- OUTSIDE REVENUE PARTNERSHIPS YOU-GO FINANCING PROJECTIONS
Recommendation Entering PAYGO will afford Natfort access to beneficial partnerships and financing opportunities. Rural Zimbabweans don't have the capital for the high up-front cost solar installations require, but with the introduction of PAYGO, we can tap into a new market and improve overall QofL. Micro-Utility Telecom & Product Energy & PAYGO Model Partnership Environment Fund EEP provides early-stage Launching PAYGO using a Partnering with NetOne not grant and catalytical micro-utility and micro-grid only allow Natfort to collect model is the best way for mobile payments and track financing to companies that Natfort to take advantage energy usage, but also allow are similar to Natfort in of the demand for power of Natfort to access NetOne’s mission. low-income, rural existing customer base. households. Installations will lead to word-of-mouth Partnering with Amped information transfer. Innovation to develop high- tech solar products is essential to improving product quality.
PAYGO – Micro-Utility Option Natfort installs equipment on a household scale, retaining ownership indefinitely. How it Works Benefits / Drawbacks Natfort installs individual units. Client pays incrementally throughout use. Must track all client Indefinite payment payments indefinitely collection Incur costs of equipment Ability to remove Natfort retains ownership of equipment. removal equipment Client default risk Longer payment timelines for low-income clients Natfort removes installation if client ceases payment.
PAYGO – Lease-to-Own Natfort installs equipment on a household scale, ceding ownership upon client repayment How it Works Benefits / Drawbacks Natfort installs individual units. Client pays incrementally throughout use. No need to track client Client default risk after repayment Client owns equipment following full Tighter timelines may Encourage clients to payment. discourage lowest-income upgrade equipment households Client upgrades with a new installation and set of payments or the relationship ends.
PAYGO – Micro-Grid Community-scale installations are accessed by individual customers in the area. How it Works Benefits / Drawbacks Natfort installs a base station to support an entire community. Households and businesses can pay for access to the base station. Must utilize smart meter Word-of-mouth system demand increase Clients purchase different amounts of Direct control over Risk of low demand in energy based on need. energy provision community Highest upfront costs Single equipment Natfort controls energy flow via smart installation serves meter software system. many individuals
PAYGO – Our Recommendation A micro-utility model has several benefits that make it the most implementable and attractive method for Natfort. Payment Timeline Client Relationships Ownership Natfort reaches the lowest- Long-term installations lead Natfort retains its income customers with to customers returning and equipment. It can remove extended / indefinite upgrading to higher-priced and reuse it if a customer payment schedules. bundles. stops paying for the energy. Client
Pricing and Product Bundling Strategic pricing structures and product bundling should encourage customers to move up the value chain. When implementing PAYGO, product packages incentivize customers to buy-in. Natfort should implement bundling “levels” and encourage customers to move up the value chain.
Pricing and Product Bundling Strategic pricing structures and product bundling should encourage customers to move up the value chain. Inexpensive bundles are the most effective way to reach new customers. Lowest-level bundles are Inexpensive Bundles inexpensive, but still improve QofL. Includes: Light Bulbs, Phone Chargers Down Payment: 5-8% of Total Price Markup (Above Cost): 5-15%
Pricing and Product Bundling Strategic pricing structures and product bundling should encourage customers to move up the value chain. Customers see increases in QoL and are more willing to purchase better bundles. Standard Bundles Natfort’s revenue increases Inexpensive Bundles when clients purchase better bundles. Includes: Inexpensive Bundle + Radio, Box Fan, Television and Receiver Includes: Down Payment: Light Bulbs, Phone Chargers 8-12% of Total Price Down Payment: Markup (Above Cost): 5-8% of Total Price 10-25% Markup (Above Cost): 5-15%
Pricing and Product Bundling Strategic pricing structures and product bundling should encourage customers to move up the value chain. Expensive Bundles Customers see increases in QoL and are more willing to purchase better bundles. Standard Bundles Includes: Reaching the top of the Standard Bundle PLUS value chain, Natfort should Inexpensive Bundles Microwave, Hot Plate, move its markup even Refrigerator, Freezer, Water higher, reaching up to 40 Includes: Heater percent. Down Payment: Inexpensive Bundle + Radio, 12-20% of Total Price Box Fan, Television and Receiver Markup (Above Cost): Includes: Down Payment: 15-40+% Light Bulbs, Phone Chargers 8-12% of Total Price Down Payment: Markup (Above Cost): 5-8% of Total Price 10-25% Markup (Above Cost): 5-15%
NetOne Partnership A Natfort and NetOne partnership is lucrative for both parties. Benefits to Natfort Benefits to NetOne NetOne provides the capital and NetOne enters into a new market infrastructure for Natfort to expand its without being required to develop operations extensive technical expertise to install and maintain the equipment Natfort can tap into NetOne’s existing Natfort understands the Greater base of consumers that have Harare market, giving NetOne a demonstrated their ability to pay competitive advantage over other outside companies
Natfort’s Value-Add Natfort is a critical piece to partnerships. 2 1 3 4 Human Capital Knowledge Natfort knows the skills and qualifications required for potential hires
Natfort’s Value-Add Natfort is a critical piece to partnerships. 2 Reputation Natfort has a strong and positive reputation with customers, suppliers, and 1 3 the government 4 Human Capital Knowledge Natfort knows the skills and qualifications required for potential hires
Natfort’s Value-Add Natfort is a critical piece to partnerships. 2 Reputation Natfort has a strong and Market positive reputation with customers, suppliers, and 1 3 Knowledge the government Natfort understands how to price a successful PAYGO Model 4 Human Capital Knowledge Natfort knows the skills and qualifications required for potential hires
Natfort’s Value-Add Natfort is a critical piece to partnerships. 2 Reputation Natfort has a strong and Market positive reputation with customers, suppliers, and 1 3 Knowledge the government Natfort understands how to price a successful PAYGO Model 4 Human Capital Knowledge Social Enterprise Natfort knows the skills Status and qualifications required for potential Natfort contributes to the hires community, making it ideal for grants and outside financing
Software Options Natfort has different options based on its market plan. Suited For Micro-Utility Suited For Micro-Grids Components Solar Panel, Power Components Solar Panels and Controller, and Accessories Meters Controlled Remotely Controlled Remotely Payment Pre- and Post-Pay Payment Pre- and Post-Pay
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