This blog was published on 30 September 2024.
At a bustling market in the Iyana Ipaja area of Lagos, close to the Otta border, Adegoke Tolulope Salimot is taking orders for fish and other produce from customers at her frozen food stall. She has plenty in stock for the day and the week ahead, so her focus is on making sales and customer service. In the neighborhood of Igando, Lagos, Chukuswa Doris has set up a few chairs outside her food & supply store. It’s not technically a cafe or restaurant – but because it’s a hot day and her fridge is full of cold drinks, plenty of customers are taking the opportunity to sit down for a break and have something to drink while catching up over conversation.
These two businesses on opposite ends of Lagos sell very different things in different areas, but have one main thing in common: both entrepreneurs depend on the refrigerators to earn a steady income and draw customers in, and neither woman is buying fuel for a generator to keep their fridges running.
It wasn’t long ago that unreliable electricity and steadily warming temperatures were a cause of food spoilage, but today, things look different. Fish, chicken, and ice blocks are reliably staying frozen – meaning no more wasted products. Cold soda, juice, and water taste much better on a hot day. Fresh milk can last months in a freezer, instead of only a couple of hours on the shelf.
The catalyst for this transformation? A solar-powered freezer from Koolboks.
Power for Enterprise
The real-life scenario described above is a powerful illustration of how utilizing renewable energy has the potential to drive business growth and generate income, revolutionizing economies in underserved regions. From the early days of solar energy reaching off-grid communities, the seeds of a new economy were sown – Solar home systems (SHS) allowed individuals to turn their television into the cornerstone of a community cinema. A father with the ability to re-charge his electric hair clippers became an entrepreneur, charging for haircuts. As small businesses grew and technology evolved, it wasn’t long before the demand for refrigeration began to surface. A visionary group of manufacturers seized the opportunity, leading to the creation of a burgeoning industry that is a game-changer in economic development and ripe for growth.
Founded in 2018 by Ayoola Dominic and Deborah Gael, Koolboks initially found success selling solar-powered camping products in France, but pivoted their focus when the co-founders realized that their technology could have a far more significant impact in regions where unreliable electricity leads to the loss of 40% of food due to inadequate refrigeration. The potential impact also lines up with a market need – the recently published Leave No One Behind report from Efficiency for Access calculated that “4.8 million more people could increase their incomes by owning refrigerators, which have been shown to generate additional income by opening new business opportunities like the sale of cold beverages.” By creating a business manufacturing solar powered freezers and refrigerators specifically with off-grid communities in mind, Koolbok’s mission was to create a lifeline for small businesses to prosper – tying their success to their customers’.
A Business Model Rooted in Boosting Local Economies
In 2024, the customer base for Koolboks is generally small business owners, particularly women in the informal sector as well as pharmacies in the off-grid and weak grid areas in Nigeria and across Africa. About 90% of their sales are B2B, with entrepreneurs depending on the freezers and fridges to run their businesses, generating the income needed to feed their families and pay for their children’s education – creating an expanding and positive impact beyond improving their earnings.
To make their products accessible, Koolboks employs a Pay-As-You-Go (PAYGo) model that allows customers to pay for their appliances over time rather than in a lump sum. The PAYGO model works well for them, as CEO Ayoola Dominic explains, “We’re focused on income generating entities – in terms of economic sustainability and commercial sustainability... as long as the customer is making money, there’s no reason why he or she would not want to make their payments.” Their PAYGo model is also constantly expanding as they explore innovative financial services tailored to the needs of its customers like cash flow analysis, asset financing, and customized credit solutions that ensure customers aren’t overburdened or spending beyond their means.
“Since I [bought a Koolboks fridge], I noticed the business has changed. When my customers come to me saying they have no power supply and ask how I have electricity, I tell them I am using Koolboks to chill my drinks. If you have this [fridge], your business will change.” — Doris Chuwa, Koolboks customer
While LEDs, batteries, and PV are still tricky to assemble outside of China, cooling equipment can be created more readily in African markets – which prompted Koolboks to take on the challenge of shifting its manufacturing to Nigeria, one of its largest markets. By assembling units locally, Koolboks has managed to increase the number of freezers shipped per container from 100 to 600, significantly reducing their logistics costs. Their assembly plant currently employs about 30 people, with plans to expand to a new facility that will create 300 additional jobs and produce over 70,000 units per year. Set to be the first of its kind PAYGo assembly plant in Sub-Saharan Africa, this local manufacturing effort not only boosts employment but also ensures that the skills and knowledge required to maintain and repair these advanced appliances are available within the community.
Local manufacturing is proving to be a game changer for the off-grid appliance market, as highlighted in the Leave No One Behind report. By reducing reliance on imports and building local capacity, countries like Nigeria are demonstrating how domestic production can not only create jobs but also ensure the long-term sustainability of off-grid solutions. This shift represents a significant opportunity to empower communities while accelerating access to appliances in underserved regions.
Navigating Distribution and Service Challenges
Like any manufacturer, success for Koolboks means their products work properly. “It’s not just about the technology, but the service in itself” Dominic explains. “We have about five thousand frozen food sellers on the platform across seventeen countries, which means that 5,000 people trust us. it’s absolutely important to know that we have humans behind this, who could have their whole life in the refrigerator – it’s how they feed the family. There’s a huge responsibility, we have to provide a service as opposed to only making a product.” When asked about their main challenges, Dominic was transparent: as the company scales, ensuring seamless distribution and after-sales service, particularly in remote areas, is incredibly difficult.
Their freezers rely on lithium batteries, and these batteries hold a certain amount of charge. On cloudy days, the system operates – but the runtime depends on the batteries charge level when the sun is covered. For example, if the battery is moderately charged, the freezer can run for 5 to 12 hours, depending on the battery capacity (30Ah, 45Ah, 100Ah, or 150Ah). It’s crucial to respond to customer questions and service calls as quickly as possible, because the reality is the appliances do need to be serviced.
The realities of working in Nigeria also come with the unpredictably of currency devaluation – the devaluation of the Naira has exerted pressure on all Nigerian operations, increasing costs and affecting profitability throughout the country. Added to that, scaling a manufacturing company requires substantial infrastructure investments, highlighting the need for affordable debt to maintain growth.
However, even given this very realistic view of the current situation, localizing the supply chain does create enormous potential to boost tax revenues, improve quality control for local suppliers, and reduce appliances’ carbon footprint. It’s just that no one ever claimed it would be easy.
A Solar-Powered Future
One way to confront challenges is to responsibly but enthusiastically embrace technology for the benefit of the customer, and Koolboks has gone all-in on AI and remotely tracking data to accomplish just that. “If we truly want to empower the businesses our customers run, we need to know what they do, where they are and we need to be able to figure out how best to help them. That’s what the data helps with,” shares Dominic, emphasizing the value of data-driven insights. Their backend infrastructure collects valuable data on temperature, usage patterns, and location. They know the exact temperature of every refrigerator and how many times it is open and closed, but they also know the income of the customers using the unit in their business. For Dominic, the next step is a no-brainer – match the market sellers with fishermen and farmers; build more connection abilities on the platform; set up a system so that women running shops can take orders online through an app and find more supplies. Keep growing, keep expanding – but base the idea of expansion on what the market needs. And always (always) collect, analyze, and use the data to back up the next area of growth.
Is a company that manufactures solar-powered fridges and freezers for the off-grid market selling a service or as product? Are they a fintech operation, or a software platform?
The answer is “Yes.. and….” The thing about solar-powered cooling is that there isn’t just one model, or one rulebook for the industry to look to and replicate. The outcome isn’t about the freezer, it’s about everything that happened before and everything that can happen after. The outcome is about this new industry that sees the potential in creating solar powered appliances for the population of the world that was, until recently, being left behind. It’s about the small pleasures of a cold drink on a hot day at Chukuswa Doris’s shop, but about also about the leap in healthcare services when vaccines can be safely stored in fridges. It’s about the hunger of companies to keep innovating around their solar-powered products, but it’s also about solar innovation addressing food security, reducing waste, and providing a path forward for cooling food down as our planet heats up. And the impact – the true outcome of this story – is the local entrepreneurs being able to rely on their incomes in order to send their children to schools and universities, enabling the next generation of young people in Nigeria to create more possibilities for success.