Smart Digital Network for the BOP

My name is Henri Nyakarundi and I have been in business for over 20 years. My journey working in tech for social good started in 2013. I grew up as a refugee in Burundi, was lucky enough to pursue my education at Georgia State University in Atlanta and graduated with a Computer Science degree in 2003. I started my entrepreneurial journey in 1999, and built my first successful business in 2006. But after the crash of 2009, I decided it was time to move back to East Africa and bring my expertise to the continent. I was amazed by the growth of cell phones on the African continent, but also saw the digital divide that existed on the ground  and decided that was a problem I would tackle. I truly believe that to experience a fulfilled life, you need to bring a positive impact to those with less opportunities. 

Around 50%  of the world's population does not have access to the internet or digital services, and in Africa this number is around 60% to 70%. There is a correlation between the digital divide, and economic opportunities and growth in communities. Digital access can solve the educational issue, minimize health pandemics and create economic opportunities. In refugee camps for example, lack of economic opportunities and lack of education increase the prevalence of crime and despair in those communities. ARED operates in Arua refugee camps in Uganda, and with our offline platform technology, we bring digital literacy and educational opportunities packaged with a micro business solution that has changed the dynamic of the communities. Our focus has been around women and people with disabilities. Our project will facilitate access to digital services and applications without the user needing internet access on their phones. It will revolutionize digital networks. 

In rural areas and refugee camps across Africa, most people cannot afford access to the internet, and the poor availability of telecom networks in those communities does not help the situation. Less than 10% of the population in those communities uses the internet yet more than 35% of the population have a smartphone. The number of individuals with access to smartphones will double in the next 5 years. 80% of the population live in rural areas in Africa which equates to about 900 million people, and there are 5 million refugees on the continent. Most of those areas have poor or no connectivity to the real world. For those who do, the cost of the internet is exorbitant since they earn less than $5 a day. The reason is simple: low density and low purchasing power of the people is a real deterrent for most companies to invest heavily in those communities. And all this lack of investment also has a secondary effect, which is poor economic opportunities for those communities. Africa's population will reach around 4 billion people by the end of this century which creates a huge opportunity to provide a tech solution and innovative business model. 

ARED has developed four key products.
The first product is a solar kiosk platform. The kiosk can charge up to 30 phones at one time and power the electronics within the kiosk, it is solar powered and has a 60 AH lithium battery on the inside so it can be operated throughout the night.
The second product is a mini server solution to bring access to multi-digital applications closer to the users via WIFI. The concept is to build a new low cost network that will allow us to store digital content and games on the local server, thereby minimizing the need for the users to have internet on their phones to consume certain digital applications. The mini server is integrated within the kiosk, and provides offline access for users.  
The third product is a mobile app that will allow the user to access the digital content mini server box, and we use iconography designs for people who do not know how to read and write. 
Finally, we developed a mobile app that allow the kiosk operator to sell digital services to their clients such as airtime, mobile money, and government services. All those services are provided on the kiosk. 

The project serves people that earn less than $5 a day which is around 80% of the population. The digital divide is huge in Africa and since most African countries are moving towards the digitization of their services, building the network to facilitate access has become the challenge. For example, in the refugee camps we are operating in, people have to walk miles to charge their phones or gain access to digital services like mobile money. By creating a one stop shop kiosk platform, we have been able to save people time and money. We also provide key digital educational content in those communities in partnership with key NGOs like World Vision. 
But we went a step further, we developed a business model where the kiosk operator is recruited from the communities we are trying to serve. They are trained and monitored to make sure they are providing good services to the customers. The kiosk operators are 85% women and 5% people with disabilities because those are the most vulnerable members of those communities, but also because they tend to perform much better on the kiosk. We serve on average 30 to 40 customers per day per kiosk.  

The digital gap experienced by the people at the base of the pyramid,the lack of infrastructure in rural areas and refugee camps, and lack of access to economic opportunities is in direct correlation with the dimension selected above - Elevating opportunities for all people, especially those who are traditionally left behind. Our technology not only brings a low cost alternative to the digital divide but our business model and hardware also create income generating opportunities for low income people in those communities.  We developed our solutions with those communities in mind. 

The idea of the project started with a simple concept, in 2008 I took my first trip back home to Rwanda and Burundi to visit my family after almost a 7 year absence. The first thing that struck me was the cell phone boom that was happening in my country. Everyone had one, even street vendors. But I also notice that people were having challenges charging their phones because most people did not have electricity at home and the electricity supply was unstable.  Around that time, the financial crisis happened and I had made the decision that it was time for me to go back home. So in 2009, I started thinking seriously about how to solve this issue and what business opportunities can be created from that challenge. The idea of a phone charging kiosk came from my experience in charging my phones at some airports across Europe. I realize I could take the same concept, but add a solar panel and a battery, but also add a micro franchise business model to be able to create jobs. It took 3.5 years from the idea to the first prototype. In 2013, I moved back home to start the business. 

I have been an entrepreneur for over 20 years now, and when I started my entrepreneurial journey, it was about making money. When I built my first successful business, I realized money was not the answer, it was just a tool. So I looked for a new challenge that would bring fulfillment to my life. When I made the decision to go back home in 2008, I wanted to do something that was impactful, and that would not only make some money but also have a positive impact on communities and the environment. I love solving problems; this is my biggest strength and what drives me everyday, and impact based businesses are full of challenges to be solved. I believe every problem has a solution. When I came back to East Africa, I noticed that most innovative businesses are focused in urban settings, and rural areas were abandoned because of how challenging the ecosystem is. You do not just bring a solution, but you need to find a way to develop the whole value chain so the solution can be implemented properly. 
I put all my savings and then some into the project. This is how committed I am. 

To take on this challenge, you have to have a long term vision, you have to know that your chances of success are less than 30%, you have to be resilient, and most of all you have to be passionate about the process and the mission. I have been an entrepreneur since 1999, and experiencing rejection and failure for the first 7 years of my entrepreneurial journey prepared me for this journey. When I left my previous business to start ARED, my mum's first reaction was, "Do not ask me for any money!" She did not understand how I could leave a successful business to start an impact enterprise focused on rural areas and refugee camps. For her, it did not make sense. When I started my journey at ARED, impact based business was a path you do not take, it was a path for large NGO's or governments. When I started ARED, I realized that living a purpose-driven life is much more fulfilling, and ultimately I want my kids to be proud and be inspired by my actions. My best skill, is problem solving, I truly believe that any problem someone encounters has a solution, you just have to give yourself enough time and energy to solve it but also always think outside the box. I welcome problems in my business. My second skill is I'm extremely resilient, I do not quit until the problem is solved, quitting is just not an option. 

I have overcome adversity all my life. In business, I never experienced overnight success. On my previous business, it took me two years to become profitable. I started a logistic company in 2006, we were a team of 4, and for the first two years, I was burning through cash and we were barely making it. I was in debt and momentum was low. This was, I believe the most stressful time in my life. But, I kept asking myself, why do other trucking companies make it and not mine? So I decided to spend time doing some research and learning the business model of some of the most successful trucking companies that I knew. At that time, two of the employees left; I had debt with the bank, my mum and sister; and everyone in my family told me to stop and get a job. They were tired of giving me money. But I was so confident in my abilities to solve this problem that against everyone's advice, I decided to move forward. When I decided to adopt the new business model, we became profitable after 3 months. I created 6 more jobs after that. 

My leadership experience is linked to my entrepreneurial experience. Turning around businesses that are not doing well, with a focus on impact, is what I do best. I helped a business which developed a refrigeration technology to help African farmers store their perishable goods so they do not go to waste. Around 35% of agricultural production goes bad due to no cold storage system in rural areas. The owner's challenge was his business model - he was looking to sell equipment to farmers but 80% of all farmers in Africa are small farmers with low income, therefore they could not afford it. So I suggested that he create a rental shared economy where farmers can rent spaces within the storage system and they pay per usage. It was a game changer. After that experience, I decide to create a YouTube channel to help African entrepreneurs. I share tips, personal business experience, tools and much more. Sharing information is one of the key strategies we need to adopt if we want to see more impact for entrepreneurs in Africa. The problem we are facing and are about to face on the continent is so massive that more impact enterprises are needed. 

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ARED is the only company in Africa to have built a smart digital network using a solar kiosk and mini server, built-in on the kiosk to provide access to digital services, offline applications and phone charging; an all-in-one solution. This multi service platform is low cost compared to a traditional distribution network that has been built across Africa, such as brick and mortar businesses. It allows users in those communities to save on the time they spend on getting access to those services. Prior to our technology, people in remote areas or refugee camps had to walk miles to access basic services such as phone charging, or connectivity.
We also developed a micro franchise business model to create economic opportunities in those communities using our technology. We recruit mostly women and people with disabilities, train them to operate the kiosk, and generate revenue on some of the services provided on the kiosk to bring an economic impact to those communities especially in refugee camps. 
Finally, we use renewable energy solutions to power the technology on the kiosk. In rural areas and refugee camps, access to energy is problematic for most people. Less than 30% of the people have access to energy, yet 80% of the people have a cell phone. Phone charging and the mini server are all solar powered. 
This solves a lot of the infrastructure problems that exist on the continent, especially when it comes to access and distribution of digital services applications. 

Initially the goal was to provide a multi function solar kiosk which provided access to offline digital applications, digital services, and phone charging services but also created economic opportunities to communities by recruiting kiosk operators who would generate revenue from the services the kiosks provided. First the end user benefit from the kiosk platform because they no longer need to go to multiple location to get access to key services and kiosk operators can make a good living working on the kiosk. 
We used to hire young people between 18 to 25 that had no other opportunities but we quickly realized that women perform much better on the kiosk than men, especially women with children. With young people, we experienced high turn over. They were indecisive, and due to poor financial literacy, some of the young men started missing out on work due to a lack of discipline. 
We also learned that business training was needed so the kiosk operators could maximize revenues on the kiosk. For example we helped them understand that by offering a regular client free phone charging services from time to time, it will increase customer satisfaction and it does not cost anything extra to the kiosk operator since it is solar powered. 
We also found out that because of the additional revenue women were bringing in the household, it was improving their lives. They could afford school fees, and also relieve the man of being the primary breadwinner since in most low-income households in Africa, men are the only income generators. 
Finally, we found that customers were saving hours by having all services in one location. Before people had to walk miles to access different services like phone charging and digital services. 
In the long run, we know that by impacting women, we are lowering poverty much better in those communities. And by introducing training programs to those women, it has a domino effect not only on their sales but also on the knowledge they share within their communities.

We serve direct customers, who are the kiosk operators, and indirect customers, who are customers buying services on the kiosk. We also have direct market segment from rural to semi urban. 
We have created around 134 kiosk operators, and 89% are women, 7% are people with disabilities. We have served around 31,000 unique customers per year and we did around 250,000 digital transactions on those solar kiosks. Digital transactions are basically digital services that we provided from the kiosk such as airtime, mobile money, content distribution, and internet access. 
This year we plan to create 67 more kiosk operators and indirectly service an additional 11,000 customers a year. 
In 5 years, we plan to add 2,000 kiosk operators in different countries and serve around 150,000 unique customers per year that will be coming to our kiosk to access to the different services we are providing. Our biggest focus is in refugee camps where access to the basic digital services and digital applications like educational content and digital literacy is where the biggest need is.  
We are also looking at implementing some public access points with our mini server product as a stand alone platform. It will allow us to increase our digital network and also increase the number of users on our network. We plan to implement an additional 1000 access points that will allow more than 500,000 additional people to access our content and WiFi services.

Our main impact goal is to implement our solution in 20 countries across Africa in the next 10 years, and lower the unemployment rate that exists among women and people with disabilities in low income areas, but also minimizing the digital divide that exists in those communities. 
2020 is our first year where we focusing on our expansion plan and adding at least 2 countries every year. However, the corona virus has slowed down our projection. However, we still plan to develop a partnership with MTN Nigeria which is the largest economy in Africa to help us implement our solution on the ground especially in rural areas. If we are able to close that partnership with MTN Nigeria, we will be able to implement over 1000 kiosks and access points across the country, and impact over 1 million people a year.  

Our goal in the next 5 years is to be in 10 more African countries and impact over 10 million people a year who will be using our services in low income communities. We can achieve this by increasing partnerships with strategic organizations that already have a presence in those communities but are looking for technology solutions that can optimize their presence and network. It is too expensive for a company to develop and implement solutions across Africa due to the fragmented market and poor infrastructure that exist in those communities. Through partnerships, we can scale exponentially. 

Our technology requires some expertise that it is hard to find  and very expensive. The mini server hardware has to work in extreme environmental conditions and have a power source. The hardware and software need to be robust. The development of such technology especially on the software side has been really challenging, including finding people who have strong expertise in embedded systems, in areas where the existing network does not always work.  
Scaling is expensive, and access to funding is a constant challenge especially for hardware/software companies. So far we have spent 85% of our funding on R&D in the first 4 years of the business to bring the best product for the market. We also have a huge challenge in scaling the business in other countries due to the fact that implementing a business in a new market requires a team, legal expertise, and market research. 
Finding a manufacturing company that can do low production at a competitive price and provide good quality products is extremely hard. We are currently looking for a factory that can produce our kiosks at a price point lower than $1000, and so far we have not been able to do so. 
Partnership is key for ARED to expand exponentially on the African continent, however, bringing international organization such as UNHR, Safaricom, etc  to work with a small organization is extremely difficult. 
Access to funding for a hardware company is extremely challenging. 

The technology barrier was approached by using opensource tools within our technology to lower the cost of development velocity. The biggest part of our development is hardware and an embedded system of the software. We look at opensource systems that can be incorporated on our platform like Openwrt, Minio and on the hardware side of the router we incorporated the Raspberry Pie board. We have also had calls with experts to volunteer on the development of our system. We have worked with organizations such as the Siemens Foundation and movingworlds.org to help us search for and select volunteers who would be interested in participating in this development project and share their knowledge and expertise. 
On the funding side, to be able to continue the development and implementation of our project, we have focused on participation in competitions and grant applications. 
We also launched 2 crowdfunding campaigns two years ago which were focused on purchasing a certain number of kiosks for refugee camps. 
On the legal side we have used a pro bono legal platform that assists impact enterprises in finding pro bono lawyers in the different countries in which we plan to implement our projects. That platform has saved us over $30,000 in fees. 
Finally, we have pivoted on a B2B business model to minimize the cost of implementation of the project on the ground and focus more on partnering with companies to become solution providers. It allow us to scale much faster and to become profitable by 2021.

We are currently partnering with World Vision to operate kiosks in Arua refugee camps in Uganda. Our partnership is focused on developing micro businesses for women but also bringing digital literacy and educational content to refugees in those areas. 
We also have some strong partnerships with MTN Uganda and MTN Nigeria and soon Expresso Senegal. Telecom companies use our technology to optimize their existing agent networks in rural areas and better distribute their services and monitor their agents. With our offline application they can provide additional services like offline content, download offline android apps, surveys, and video games that will increase digital access to low income individuals, but also improve their bottom line of increased usage of some data and consumption of their content. Most telecom companies develop their own digital content but distribution has always been a challenge. 
Our technology provides a strong analytics background to our clients so they can measure the impact and better monitor the router network. 

The way we work with them is very simple, we provide the hardware/router free of charge, and we charge a monthly service fee per router that covers the usage of different applications including analytics. ARED is also able to advertise on the router network and provide content for external parties for additional revenue. Telecom companies implement their hardware on the different locations they have, and for the clients they have. Sharing the network allows us to recover the hardware investment much faster and develop a robust long term business.

ARED is a platform as a service company. Because we are a small company and the margins are very small at the base of the pyramid, we realized that sharing the value chain with partners is the only option to build a sustainable model. Our market segment is low income people in rural areas, semi urban areas and refugee camps. In most of those areas there are companies that already operate such as NGOs and telecom companies. 
We have two key products: 
1. Our solar kiosk platform (which includes our router solution) is usually used in rural areas and refugee camps (where there is poor distribution network of digital services and applications). We mostly partner in those locations with NGOs that purchase our kiosks at cost and pay us a licensing fee on our software that include a mobile app for agents to sell digital services, a maintenance and monitoring app, and finally a WiFi app for users to engage with our offline application. We charge a one time franchise fee to provide training and support for their kiosk operators. Our solution creates micro businesses and lowers the cost of digital access. 
2. Our router solution as a stand alone product is mostly for the semi urban areas, like markets, bus stops, buses etc... We provide the hardware free of charge and charge a monthly service fee that varies between $20 to $40. We focus on offline access to mobile apps, video content, surveys, geo-location, analytics, etc.

To build a sustainable business as a social impact enterprise, we need to scale the number of access points we implement on the ground with our kiosk and router solution. It requires ARED to have 500 access points (a combination of solar kiosks and router solutions) implemented on the ground to become profitable. 
1. We need to develop a strong financial system to finance our hardware which is key for scaling our smart digital network and that has been a challenge. Debt or convertible debt are some of the financial tools we are currently seeking.

2. Our technology is made up of hardware and software development, and we are currently developing our 2.0 router solution that is more powerful, with a much bigger internal memory with additional modules like GPS and Bluetooth to bring more offline applications and services for low income people, and a better monitoring system of the router network using AI technology. One of the applications we want to incorporate is localizing data storage for SMEs in low income areas that do not have access to the internet but want to store small documents, photos etc. 

3. ARED is a B2B company, therefore partnerships with NGOs and telecom companies is key for us to scale and expand to new markets. We are currently negotiating with MTN Nigeria who will pay us a monthly service fee of $20 per access point to provide offline services to their customers in the locations where MTN has a branch or kiosk.

Most of the funding we have received up to date are grants for the hardware development of the kiosk and router 1.0. It took ARED 5 years to develop the whole technology ecosystem from the hardware system to the software and mobile applications. We received about $600,000 in grants for different entities. DEG provided $400,000, Microsoft $75,000, Siemens Foundation $15,000,Green challenge $100,000. For more information please click on the link. 
ARED also received equity funding for $150,000 from Haptik Digital and Greentec capital  for the software development. 
In the 2019 fiscal year, ARED grossed around $60,000 with around 30 kiosks and 25 router solutions between Rwanda and Uganda. However, in the fourth quarter of 2020, we did pivot to a platform as a service model compared to our previous model of implementing the hardware on the ground, recruiting and monitoring the kiosk operators. We realized due to the low margins, we needed to stop trying to develop and implement the whole value chain, but focus instead on what we are good at and provide our technology solutions to entities already operating on the ground to optimize their impact to the different communities for a fixed monthly service fee and a revenue sharing structure on key digital applications. 

ARED is currently negotiating a large partnership with MTN Nigeria for the implementation of 1500 access point across the country. MTN Nigeria want to use our technology to optimize the existing kiosk network they have on the ground in semi urban areas and rural areas. Our technology will allow MTN Nigeria to optimize their kiosk network by offering WIFI connectivity and offline applications but will also help MTN Nigeria better monitor their kiosk network and agents working on those kiosks remotely.
ARED plans to raise 1.5 million dollars when we get the deal signed to fund the hardware and the integration of the software to their value chain.
We would like to get 60% of the funding as debt at 9% interest for 5 years and the remaining 40% will be looking for equity. 
30% of the fund will be used to continue our expansion plan in other African countries and hire commercial sales directors in West Africa and Southern Africa. The MTN Deal will act as a road map for the type of partnership structure we will be looking for. 
Our goal is to strengthen our license deals across the continent that will not only provide a path to profitability but also increase our impact on the ground. 

Due to the corona virus that is happening on the continent,our current budget for the year 2020 will be around $125,000. We have scaled down our expansion plan and we are focusing this year on additional software development in the firmware and hardware which will be 50% of our budget this year. Our other fixed costs will be around 30% of the budget. 
We plan to still implement 20 to 40 kiosks on the ground which will be around 20% of the remaining budget. 

There is 4 main reasons we are applying for The elevate prize. 

1. ARED want its foot print in other markets across Africa to not only increase our social and economic impact on the ground, but also show that our technology can bring changes to certain communities. 

2. We hope the Elevate Prize will bring us more visibility to certain stake holder especially large NGO's like UNHCR, UNICEF and others to help us speed up the partnership we seek to fast track our expansion plan. 

3. We believe that within Elevate Prize we could get also some technical assistance to help us improve on our technology and guide us much better on the firmware side which is still a challenging topic. 

4. Finally, the fund will be a huge help to implement a large number of kiosk on the ground and scale our smart digital network and better prove the business case. This fund will have a huge impact for ARED. 

Our partnership goal is to expand the adoption of our technology with key stakeholders like telecom companies or large NGO's. Our focus is to be a solution provider and utilize the expertise and knowledge of the stakeholder to help us implement our technology on the ground. We need to find talent to help us promote our solution to major organization like UNHCR, major telecom companies in Africa.
We need to find a legal team that can help us improve our licensing model, and maneuver around the different regulatory rules across the continent. 
We want to put together a board of advisory to help us solve some of the challenge with have in manufacturing of our hardware, look for technical partners to improve our technology development and more. 
Access to capital to fund the business has been extremely hard, access to funding is key for our expansion.  

One of the think we learned is how difficult it is to partner with large organization. Finding the right contact within those organizations that are decision makers is extremely challenging. 
In 2016, we partnered with Redcross Rwanda that lease our solution to serve refugees that were coming from Burundi in Rwanda. We would love to increase a partnership with Redcross international that operates in all refugee camps across the world. We truly believe that our solution would have more impact in those camps.
In the last 2 years, UNHCR digital has put a trememdous focus on bringing innovative digital solution such as mobile money, access to digital application and educational content for refugees and our technology solve those problems. We would love to develop a partnership with UNHCR digital division.
Safaricom is the largest telecom company in Kenya, and their innovative department always looking for solution to expand their distribution network of digital services in rural areas. Having a partner like Safaricom would allow us to solidify our technology in Kenya. Econet is also a telecom company with presence in several countries in Africa. We believe they would be interested in our technology for the rural areas.
Recently, Mastercard foundation is working on digital access for education content and digital payment but they are looking for some technology that will facilitate this digital access for low income people. We have tried to partner with them for the last 6 months and failed so far.