Barefoot Power, a for-profit social enterprise, has won $5.8 million in Series B funding from three new investors and two existing ones, further strengthening its case for a new business model to solve global problems.
The firm, which develops and sells low-cost, environmentally friendly lamps to the poorest of the poor, said it attracted the funds from three social investing funds – the Netherlands’ d.o.b Foundation, Austria’s ennovent and Cambodia’s Insitor Fund. Also pouring more money into the company are The Grace Foundation of Melbourne and the Netherlands’ Oikocredit Ecumenical Development Coop.
“We appreciate the commitment by new shareholders and the continuing support of existing shareholders. The funds raised will be used to continue the solid growth trajectory and potential of Barefoot Power, as recently recognised by receipt of the Ashden Award, and solidly positions us to meet our target of impacting 10 million people by 2015,” said Barefoot Power CEO Rick Hooper.
Global market beckons
It is tempting to call Barefoot Power the next best business model since microfinance. But combining social purpose with capitalism’s animal spirits should sound frightening, given what has happened to for-profit microfinance, notably in India. Private sector greed, combined with regulatory hurdles, crushed microfinance, leading to near-collapse of several firms in India and setting back the originally non-profit initiative to empower the poor with small loans. This should remain a cautionary tale for enterprises like Barefoot Power that tap private investment to drive a social agenda.
Having said that, Barefoot Power has covered a lot of ground since Stewart Craine, an engineer with a love for rumpled tees, village life and empower lives – not necessarily in that order – flew into China looking for low-cost lamps that could light up the lives of the world’s poor. It has touched the lives of two million people around the world, besides winning a host of awards, notably the Ashden Awards, or “Green Oscars.”
Barefoot Power offers cheaper, safer and cleaner alternative to kerosene in developing countries through low-cost, rechargeable and solar-powered lamps. It distributes these lamps by tapping local entrepreneurial forces, especially ones that already provide microfinance services.
The firm has initially targeted 20 countries including Uganda, Kenya, Indonesia and India. It seeks to reach 5 million people by next year and 10 million by 2015. Globally, Barefoot Power seeks to address a market that might be worth $10-30 billion a year.
Barefoot Power is not the only company that is trying something like this. Another Australian firm called Illumination, headed by Shane Thatcher, builds low-cost solar lamps in China and sells them in poor countries such as Pakistan, mainly through international aid agencies. It has a distinctive model – it sells the lamps at below cost by claiming carbon credits.