Biomass Controls PBC (Biomass Controls) is similarly using sanitation data, not only to inform decision making and operations, but also to drive additional revenue streams. It’s kelv°n™ software architecture and mobile application allows real-time control and monitoring of its “biorefineries,” each of which is capable of processing up to a ton of toilet resources a day, and uses pyrolysis to convert it into thermal energy and biochar.
As well as presenting key performance indicators (KPIs) that provide visual reporting for management and stakeholders, it’s helping boost unit economics by generating additional revenue from app subscriptions, at zero marginal cost to the business. It’s also building a hugely valuable bank of sanitation data, comprising more than two billion records, which offers exciting future product possibilities.
6. Become ‘asset light’ to make investment capital stretch further
Making full use of sanitation data isn’t the only thing Biomass Controls and GARV have in common. They’ve also both pivoted their business models to unlock greater investment and, with that, greater capacity to scale.
Initially purely an equipment production business, manufacturing its patented pyrolysis biorefineries, Biomass Controls has moved to an infrastructure-as-a-service (IaaS) business model, which includes an asset financing intermediary. This has enabled the enterprise not only to tap into alternative forms of finance, but also make each dollar go further by tapping into new markets with a much more affordable “pay-per-use” proposition. In turn, this has helped it to attract loan funding from WaterEquity’s WaterCredit Investment Fund 3 (WCIF3) to expand deployment of its refineries.
To address the capital intensiveness of its smart toilets, GARV has been piloting a franchise model, whereby franchisees bring the capital and local management capability, while GARV, as the franchisor, brings the technology, systems and network operations. Again, this asset-light approach is more attractive to potential investors and customers, and has already enabled GARV to unlock new long-term contracts with municipal bodies, smart city projects and the Delhi Metro Rail Corporation.
7. Solve more problems to unlock multiple sources of capital
Because they can tell and sell an integrated story of impact — one that not only addresses SDG6 (clean water and sanitation), but also adjacent goals, such as SDG2 (zero hunger), SDG3 (good health and well-being) and SDG7 (affordable and clean energy) — several Sanitation Economy enterprises are proving adept at unlocking multiple sources of investment.
In the case of ATEC, for example, articulating the value proposition of its biodigesters is incredibly simple: waste goes in; gas and fertilizer comes out. But allied to a biogas-fueled rice cooker and twin burner stove supplied with the biodigester, that value proposition can be wrapped in the bigger idea of building a “smart farmer community,” where each member not only benefits from a US$521 a year saving on gas and fertilizer, but also a modern, smoke-free cooking environment.
Anchored more in the outputs of its biodigesters than the inputs, this narrative has helped ATEC raise US$2.8 million in debt and equity financing to date, with a further US$5 million expected to be raised over the next five years — the majority of its funding objectives met by investors focused on energy and fertilizer, as well as some taking a more holistic view of the benefits of investing in water, sanitation and hygiene (WASH).
8. Innovate new financial instruments
That several Sanitation Economy Accelerator program enterprises have been able to raise commercial investment signals an important tipping point in the level of trust that entrepreneurial sanitation enterprises can build scalable, profitable and sustainable business models. But realizing the full potential of the sanitation economy will require many other enterprises to spring up and follow their lead. In turn, they will need help to bridge the gap between philanthropic capital at one extreme and commercial investment at the other.
Between novel idea and proven concept lies the “dragon pit” of testing, iterating and validating the business model — a process that can take considerable time. Urgently needed are more blended financing and innovative financial instruments that recognize these gaps and are specifically designed to fill them — instruments that incentivize cross-sector collaboration, that emphasize impact as well as financial returns, and that ideally focus specifically on the acceleration of progress toward the SDGs.