Why We Invested: Jibu
Forty percent of people living in sub-Saharan Africa lack access to clean drinking water. Rapidly expanding urban areas and climate change are posing challenges to water availability in African cities. Rising demand has put pressure on urban areas and outpaced the development of wastewater management systems. Because of insufficient water distribution infrastructure surrounding urban water management plants, municipal water service providers cannot reliably bring safe water to the tap. What’s more, contaminated drinking water results in increased vulnerability to water-borne diseases and infections. Without access to clean water, people are at risk of lower school attendance, missed workdays, productivity loss, and malnutrition, all which drive the prevalence of poverty. Existing solutions, like boiling water and point-of-use filtration systems, are not sustainable. Boiling does not guarantee safety and is time consuming to use / access, while point of use filters are liable to lose effectiveness soon after purchase.
Increasing Access to Safe Drinking Water
Africa’s middle class is expanding, with increasingly more disposable income. While traditional bottled water is affordable to some, these products are still inaccessible to 90 percent of the market for everyday purchase. Water interventions to date have been cost prohibitive due to high overhead costs and distribution challenges, however companies that have built effective operational capacity can benefit from the increased purchasing power of the mass market to scale profitably.
That is why FINCA Ventures invested in Jibu, a company founded in 2014 that has created a highly scalable distribution platform for essential goods and services through a network of locally owned franchises that provide affordable drinking water to the growing urban lower income and middle class in Uganda, Tanzania, Rwanda, Kenya, Burundi, Zambia and DRC. Competitive with the cost of boiling, Jibu’s water is high quality and made affordable and accessible through localized production and distribution through refillable, branded water containers.
Driving Down Costs for Production and Distribution
Jibu keeps costs low by selling wholesale and directly to consumers, avoiding middleman and retail markups; virtually eliminating transportation costs by serving the immediate neighborhood within walking distance; and producing re-usable bottles, with Jibu customers paying a one-time bottle deposit and then exchanging empty bottles for full bottles, paying only for the water.
Promoting Entrepreneurship Opportunities Through a Franchise Model
Father and son founders, Randy and Galen Welsch, designed the Jibu model to increase business ownership opportunities locally as they witnessed growing unemployment in the region coupled with entrepreneurial talent that did not have the resources to start their own businesses. Jibu’s refreshing take on a franchise model equips and capitalizes emerging market entrepreneurs to own profitable franchises in densely populated, high foot-traffic urban market areas, creating significant job creation opportunity for women and youth while making drinking water affordable and convenient for urban consumers. To date, Jibu operates over 150 production franchises, 300 dedicated Jibu outlets and sells through more than 4,000 retail points, supporting over 2,450 full-time equivalent jobs through its franchise network.
Reducing Environmental Implications of Bottled Water and Other Alternatives
From an environmental perspective, Jibu’s model reduces the prevalence of home boiling and associated carbon emissions and health implications of indoor smoke. The solution uses energy efficient, low-waste water purification technology that can treat water from any source, and bottles are returned and reused, which is more cost effective than recycling for both Jibu and the end consumer.
Jibu’s future is clear with plans to leverage its high-visibility retail platform to sell complementary, essential products to its customer base, starting with high fortified porridge and LPG for cooking. To significantly scale the franchise model and launch these essential impact products, Jibu is actively raising a $20M Series D round.