Investor Q & A with Lauren Cochran, Blue Haven Initiative
Jul 27, 2016
Darragh Cotter, Communications and Marketing Manager
Lauren Cochran is Director of Private Investments at Blue Haven Initiative, where she leads strategy and execution for the portfolio of direct investments. Lauren spent five years at Imprint Capital leading investments in emerging and frontier markets that provide a measurable positive social impact as well as a commercial financial return. Ahead of Unlocking Solar Capital Africa this November 1-2, GOGLA talks to Lauren about Blue Haven Initiative's involvement in the off-grid space.
Q: Many thanks for joining GOGLA for this Q&A Lauren. Can you tell us a little about Blue Haven Initiative’s operational strategy and your involvement to date with the energy sector, and in particular the off-grid energy sector?
A: Blue Haven Initiative (BHI) is a single family office with $50 million dedicated to making early stage direct investments. We focus most of our time in Sub-Saharan Africa, making equity and debt investments into early stage businesses in the renewable energy and fintech sectors. We chose these sectors because we believe they are core to economic growth and will probably look very different than the traditional banking and energy sectors that many of us are familiar with in North America or Europe. To date, we have made six investments in the renewable energy sector, including four in Sub-Saharan Africa: M-KOPA,PEG Africa and CrossBoundary Energy.
Q: As Head of Direct Investments at BHI, you have led investment to M-Kopa, a fellow GOGLA member and a well-known business in the off-grid sector. What made BHI decide to invest in M-Kopa?
A: I met the M-KOPA team in 2012 when they were just starting out. They are the first to have commercialized the idea of pay-as-you-go to solar home systems and it was clear in those early days that there was big business potential in their idea. The focus on creating a readily accessible technology alongside a great customer experience has allowed them to build a long-term credit relationship with their customers. M-KOPA now delivers an entire suite of products and services based on the sense of trust they have built with their customer over time. It will be a big business.
Q: With Unlocking Solar Capital Africa taking place this November (1-2) in Nairobi, how important are events like this for those in the investment community? What do you see as the main benefits of investor conferences like this?
A: We are all making this up as we go along. Though investors in the space have experience in other sectors and in many types of securities, this is a new sector with a new profile in risky markets. By bringing stakeholders together who are thinking about these issues from different lenses, we can all learn from each other’s mistakes and successes. It’s key to building an effective and well-functioning ecosystem.
Q: Does BHI prioritize investment in a particular series? What practical advice can you offer to businesses seeking investment in their off-grid solar company?
A: We invest in Series A onwards, but that can mean a lot of different things depending on the company. We like to co-invest with other groups that can augment our expertise and support of the entrepreneurs. In terms of advice, I would start with getting to know your customers and spending some serious time thinking about how best to serve their needs. Every region and country poses a different set of challenges and requires a slightly nuanced model, so experience as well as ongoing in-country engagement and observation are key.
Q: How important are environmental and social considerations when BHI is deciding to invest? Is it important for companies to have impact numbers at hand when speaking with investors?
A: As an investor seeking both best-in-class financial returns as well as the maximum social impact from our entrepreneurs, we opt to keep impact measurement as simple as possible. Once we’ve established that a business model has impact embedded into its core, we seek out business metrics that can help us illustrate the social or environmental impact of the company. We prefer metrics that are a straight forward calculation from business metrics, like number of customers served or tons of carbon saved. Hopefully an entrepreneur has these key metrics at hand since they are inextricably linked to the success of his or her company.
Q: How important is joining GOGLA, the association of the off-grid solar sector, for connecting with businesses in the sector?
A: I have found GOGLA to be a great resource for better understanding the issues being faced by entrepreneurs across sub-sectors and geographies. As we expand our portfolio in the energy sector, it is helpful to have an understanding of key pain points for scale, whether related to local laws and regulations or nuances in customer behaviour, among many other things. It’s helpful to have an organization bringing entrepreneurs together to share these types of issues and work together to solve them.