Solar energy products provider, Sun King, has secured a $70 million equity investment led by LeapFrog Investments. The funding is an extension of the $260 million Series D round the solar company announced this April. With this investment, Sun King has closed its Series D round at $330 million, bringing its total funding since inception to $550 million.
What will Sun King do with the funding?
Sun King is a provider of off-grid solar energy products in Africa and Asia. According to the company, it has delivered solar energy to 165,000 homes per month across eight African countries .
The company will use the funding to scale its business presence and expand its pay-as-you-go solutions to entail larger setups capable of powering appliances like refrigerators.
It will also exit all of its prior institutional investors completely.
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Africa’s digital skeleton is gradually adding flesh to bone. Countries like Rwanda and Ghana are doing more to achieve digital transformation across basic yet tedious processes, with the former launching a one-stop platform for accessing public services in 2015 and the latter digitizing national identification.
But there’s still more to be done to drive development, job creation, and economic growth, and there are different areas that African countries that are trying to achieve these could focus on.
An expert survey by the OECD in 2020 showed that policymakers and other stakeholders believe that when it comes to creating more jobs, providing digital infrastructure should receive greater priority over digital skills, digital solutions for agriculture and anything else.
Digital infrastructure is a core need and the foundation for a lot of these other areas to function. However, focusing solely on building infrastructure over other components of digitalisation could have more delayed, long-term effects on economic growth, compared to others like improving access to finance.
Take South Africa, for instance. 98.5% of businesses are SMEs, and they contribute 39% to the country’s GDP. Yet, South Africa has a $30 billion SME financing gap, and analysts predict that about 60% of businesses could shut down due to the spending contractions imposed by the pandemic.
Unlocking growth in South Africa will clearly require paying more attention to SME financing. A priority area should therefore be enabling easier access to credit since traditional financial institutions are historically averse to financing SMEs. This would then mean driving compliance with the country’s Protection of Personal Information Act, which came into effect in 2020, as companies need data to give loans.
In some economies, it is clear what they should focus on. Ethiopia’s economy, for instance, is largely dependent on agriculture (40% of GDP and 75% of the workforce). So perhaps Ethiopia should focus on providing adequate digital solutions for smallholder farmers.
On the other hand, countries like Sudan and Cameroon with no specific data protection laws in place should consider drafting and implementing legislation for that first, because with further digitalisation comes the risk of data leakage.
Every country should recognise where it falls short and first direct its efforts at those areas instead of applying a one-size-fits-all approach.
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