[kictanet] M-Kopa Solar fires 18% of its staff including all developers, outsources work to a foreign company

Mon Mar 12 15:25:43 EAT 2018

Adam

This is probably an Off-Balance Sheet item. The debt financing
<https://www.capitalfm.co.ke/business/2017/10/m-kopa-solar-secures-sh8-2bn-debt-expansion/>
you are mentioning is mainly for onward lending through 12-24 months
micro-payments to its 600k plus off-grid customers. This doesn't
necessarily impact their Working Capital Requirements and hence little
impact on their burn-rates.

Good discussion.

*Ali Hussein*

*Principal*

*AHK & Associates*

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim
<http://ke.linkedin.com/in/alihkassim>

13th Floor , Delta Towers, Oracle Wing,

Chiromo Road, Westlands,

Nairobi, Kenya.

Any information of a personal nature expressed in this email are purely
mine and do not necessarily reflect the official positions of the
organizations that I work with.

On Mon, Mar 12, 2018 at 2:08 PM, Adam Lane <adam.lane at huawei.com> wrote:

> Brian
>
> The money they have raised was debt financing to predominantly pay for the
> up-front costs of solar systems, TVs and phones that they then resell onto
> their consumers, who pay back day-by-day over several months. These are all
> assets. Of course some of the money is also for operations and for
> expansion. It is not accurate to say they have burnt through the money;
> they have spent a lot of the money on assets.
>
>
>
> I would also think that they don’t need a large software development team
> having already developed their software, and instead focus on a smaller
> (maybe outsourced) team for maintenance and small upgrades (which would be
> easier to outsource after the initial development), but that is just a
> guess.
>
>
>
> Adam
>
>
>
> *From:* kictanet [mailto:kictanet-bounces+adam.lane=huawei.com at lists.
> kictanet.or.ke] *On Behalf Of *Ali Hussein via kictanet
> *Sent:* Monday, March 12, 2018 1:39 PM
> *To:* Adam Lane <adam.lane at huawei.com>
> *Cc:* Ali Hussein <ali at hussein.me.ke>
> *Subject:* Re: [kictanet] M-Kopa Solar fires 18% of its staff including
> all developers, outsources work to a foreign company
>
>
>
> Brian
>
>
>
> Exactly! In one sentence you have hit the nail on the head. The new game
> in town is P2P (and here I mean Path 2 Profitability not Peer2Peer) :-)
>
>
>
> Regards
>
>
> *Ali Hussein*
>
> *Principal*
>
> *AHK & Associates*
>
>
>
> Tel: +254 713 601113
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
>
>
>
> 13th Floor , Delta Towers, Oracle Wing,
>
> Chiromo Road, Westlands,
>
> Nairobi, Kenya.
>
>
> Any information of a personal nature expressed in this email are purely
> mine and do not necessarily reflect the official positions of the
> organizations that I work with.
>
>
>
> On Mon, Mar 12, 2018 at 1:30 PM, Brian Munyao Longwe via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> Hmm, they've burnt through US$ 152 million in less than 7 years... and are
> downsizing instead of scaling up...I'd be a very worried investor if I had
> skin in *that* game....
>
> My two cents,
>
> Mblayo
>
>
>
> On Mon, Mar 12, 2018 at 11:14 AM, anyega jefferson via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> Follow the money, chief, which strategy creates the lowest operating
> costs?
>
>
>
>
>
> And we kinda can't begrudge anyone , for seeking profit maximization,
> though i'd think Kenyan developers are the most affordable
>
>
>
> On Mon, Mar 12, 2018 at 12:04 PM, Watila Alex via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> Good Afternoon,
>
> Are kenyan developers to expensive or unable to meet the grade. or is
> something else happening here
>
>
>
> Article from M-Kopa Solar fires 18% of its staff including all
> developers, outsources work to a foreign company
> <http://kenyanwallstreet.com/m-kopa-solar-fires-18-of-its-staff-including-all-developers-outsources-work-to-a-foreign-company-linked-to-new-cto>
>
>
> M-Kopa Solar fires 18% of its staff including all developers, outsources...
>
> Kenya based pay-as-you-go solar provider M-KOPA Solar has fired
> undisclosed number of staff including most of it...
>
>
>
>
>
>
>
>
>
> Kenya based pay-as-you-go solar provider M-KOPA Solar has fired
> undisclosed number of staff including most of its developers. According to
> people familiar with the matter who requested anonymity, the developers
> work has now been outsourced to a foreign company that is linked to the
> company’s new CTO.
>
> The exercise, which was completed in December last year affected a number
> of employees and some of whom were absorbed by Safaricom according to the
> source.
>
> We sought comments from the company’s CEO and Co-Founder Jesse Moore, who
> confirmed the layoffs and explained that they were necessary due to
> rising costs of technology and there was need to generate profits and give
> returns to investors.
>
> “I can confirm that we completed a restructuring process in December 2017.
> This was done to reduce fixed costs and keep us on the path to
> profitability. Overall, the company reduced headcount by 18% covering all
> departments and all levels in Kenya, Tanzania, Uganda and UK. We are
> outsourcing more of our technology work, maintaining a smaller in-house
> team to work directly with outsourcing partners in Kenya and overseas.” he
> noted.
>
> He went on to say that this was the right thing for the company’s
> long-term sustainability, “This means building a sustainable, profitable
> company that offers impact for customers and returns for investors.”
>
> On whether the company had outsourced the IT services to a company that is
> linked to the new CTO, this is what he said.
>
> “In mid-2017 our Acting CTO was seconded to us from one of our outsourcing
> partners, when our previous CTO left the company. Our board approved this
> and the individual is strictly recused on procurement decisions with
> companies where could be a potential conflict of interest.”
>
> The company was started by Nick Hughes, an Englishman, and his Canadian
> co-founder, Jesse Moore. Hughes is a former executive at Vodafone, while
> Moore was working for the GSMA Development Fund, a mobile
> telecommunications industry group, where he was in charge of identifying
> opportunities to make mobile services available to people in developing
> countries. M-kopa is one of the best-funded startups in Africa having
> raised more than $152 Million since inception in 2011. However, a big chunk
> of this financing is in form of debt.
>
>
>
>
>
> Regards,
>
>
>
> Alex
>
>
>
>
>
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> Anyega M Jefferson
>
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> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
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> sector in support of the national aim of ICT enabled growth and development.
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