Koolboks is a French tech startup with a focus on serving a Nigerian market. The startup seeks to make cooling affordable and accessible to all, using solar energy to power refrigerators. The company promises round-the-clock refrigeration without access to on-grid electricity at very affordable rates.
Recently, Koolboks announced a product which they have since tagged the Vaccine fridge. This fridge uses geospatial technology to give data on temperature, battery level and other performances on the refrigerator. Necessitated by understanding this invention, Space in Africa met Ayoola Dominic (A pharmacist and graduate of EDHEC Business School), CEO & Co-founder of the company and Deborah Gael, Co-founder and Operational Director of Koolboks. In this interview, they talk about the Vaccine fridge, their plans for the market, and how they intend to spread across Africa.
What is the company Koolboks about?
Okay, so basically Koolboks is a French startup that intends to democratise the way the world experiences cooling. Our mission is to make cooling affordable and accessible to everyone that needs it. So today, in Africa, we have three significant challenges. One; 40% of food is wasted in emerging markets; also, we have about 5 out of every ten patients that get to die due to vaccine spoilage. Two; we know that affording a refrigerator is usually expensive and when you have it, there is no electricity. Over 600 million people in sub-Saharan Africa today lack access to electricity and therefore lack access to refrigeration. And when they even have refrigeration, the cost of owning one is usually an uneasy task. Because after getting a refrigerator, they typically have to get a generator and then you start buying fuel to be able to run your refrigerator. Thirdly, of course, most of the refrigerants that are being used are dangerous refrigerants. They have been banned in the West, and these are 80,000 times more dangerous than carbon, but that is what still exists in African countries.
Koolboks today has come to proffer solutions to these significant challenges. One; thanks to the power of the sun and water, which is very abundant in Africa, Koolboks created an off-grid solar refrigerator that can generate refrigeration for up to four days in the absence of power, and even, in the presence of limited sunlight. We achieved this through a technology called Ice thermal storage, where we store energy in the form of ice other than in batteries. What I’m saying is whether or not you have power, you can get refrigeration. And whether or not you have sunlight, you can get refrigeration for up to four days, non-stop.
The good news is, we have also gone ahead to make it more affordable. We integrated, in our product, a solution called the PayGo technology which allows individuals to pay as low as USD10 per month to be able to own a refrigerator. So that means gone are those days when you have to buy a generator and then buy a fridge because you want to refrigerate. If you are a small business owner, you have a frozen food business where you have to use a generator every day, that doesn’t necessarily have to happen again, thanks to Koolboks.
You mentioned a USD10 per month payment, and I’d like you to explore that particular aspect due to the economic position of Africans, especially Nigerians, which is one of your primary markets.
As I said, it is a considerable challenge to get a refrigerator in Africa, looking at the peculiar situation of our customers. The minimum wage in Nigeria is about USD78, and then they have to spend close to USD300, USD500 and USD1000 to get a refrigerator. And then you still have to get a generator which you fuel every day. The cost is unbearable for our typical customers and in that case, what we’ve done is in that technology which is IOT based, which we can shut down from anywhere in the world. We have been able to allow Africans to pay for their product in instalments. They can pay as low as USD10 a month to be able to own a refrigerator in Nigeria.
You mentioned that IoT technology allows you to shut down the refrigerator from anywhere in the world. Going through your products page, I saw that you have a new fridge that will enable owners to monitor the temperature of the fridge from anywhere in the world. How does this work? How were you able to get to this feature?
It works through the IoT tech(Internet of things) where we use a GIS system, which makes it possible to monitor the temperature of a refrigerator from anywhere in the world and also tell the location of the fridge anywhere in the world as well as we can observe the battery level. We can tell whenever anyone opens the refrigerator anywhere in the world, thanks to these applied systems. And we can monitor the battery level of the fridge thanks to the IoT tech, and we can tell as well whenever anyone opens the refrigerator. So this allows us to be able to monitor and control the systems. We are currently deploying 30 of these units to Delta State in the healthcare sector. Their healthcare centres are very proactive, and they are not just looking at the current challenges we have with vaccination storage, they are also looking at the challenges we might have in the future with the covid vaccines that are about to hit the streets. These units [in Delta State] are such that from France where I am today, I can easily tell the temperature of each unit. I can control the temperature here, and I know when anyone opens the fridge anywhere from France. I am also able to shut down the refrigerator from France if the case arises. This is a fridge that calls you. Your fridge will contact you should you go beyond the required temperature. It will reach or send a message.
This sounds like a lot of broadband energy, considering that African countries, specifically Nigeria, do not have as much internet penetration rate. Do you think Africa’s internet connectivity will affect the success that you intend to achieve?
Very very valid question. I will answer the question in two folds. Yes, it will, to an extent, but it would not affect the functionalities or the problem we are going to solve at the end of the day. We have online and offline. Online being where you use the internet and the functionalities are fully tacked. In regions where you do not have a good network, we have an SMS based system where you have to probe the structure. To find out specific details like the temperature, at any point in time you’d have to text a number to a particular code that would have been pre-shared with the customer. Once you do this, you can tell the temperature of the freezer at any point in time.
There are other functionalities that we will not be able to monitor because of the lack of internet. Still, the most critical parameter, which is the temperature, can be gotten at any point in time. But functionalities like when someone opens the fridge, battery level, you might not necessarily need to track those, and if you look at what we are going to do, the most important thing is to preserve the vaccines. If we can conserve the vaccines, we are talking basically about temperature munching.
What is your market penetration rate, especially considering that you do operate from Africa? Do you have a target, are you there yet, and to what extent do you think policies and regulatory environments in Nigeria will affect this penetration rate?
First question; do we have penetration rate? Yes, we do have a penetration rate, and today, we hope to capture in the next ten years about 3% of the market, which is enormous. Today we are talking about the USD75 billion market expected to grow to about USD125 billion. In sub-Saharan Africa, it’s about USD7.5 billion, and Nigeria alone has about 4 billion of that, expected to grow to about 15 billion. Three to five per cent of that in the next ten years is very massive, and that’s what we are currently looking at. Where we are today, we are still very far from it. So far today, we’ve sold close to 800 in the first year, and our competitor based in Brazil has done 2000 in three years. That is the only competitor that we have so I think we are not doing badly.
To answer the other part of your question, I think for us right now in terms of regulations, there has been none so far, and the only challenge we envisage is going to be around manufacturing because we want to set up a local assembly in Nigeria by the first quarter of 2022. We have a French partner called La Gazelle, and they’ve been manufacturing for sixty years, so we are coming to the country together to set up our products. We have this IP, and we have to be careful as we can’t manufacture just anywhere. We are going to be manufacturing in China but the earlier we can move into our own manufacturing space, the better.
What we envisaged initially that would be a huge problem was regulations of manufacturing around the country. Now a lot of those are being eased currently because the government is supporting solar and supporting manufacturing locally, which I think is the best time to come in and that’s why we are trying our best to make sure that in the next couple of months or weeks we speed up our activities to set up our local assembly as soon as we can. Taxes which could have been a significant challenge, we are told that for the first seven years, we might not have to pay taxes if we are setting up in the Lekki Free Zone which we are planning the work on. We are being told about the loans from BOi, and all these are in the process already, and we are being told about the import duty waiver, and bank waiver for products. This is the best time to set up anything solar in the country basically, and we are quite excited. The federal government just signed up for 5 million units of Solar working systems. For all these people, that is the first step. Once they get light, the next thing is the refrigerator. For us, we think this is the best time to come to the country.
Nigeria is a massive market, of course, but Africa is an even bigger market. Do you have plans of moving to other African countries in the future?
Yes, thank you very much. We are currently selling to about seven countries in Africa…
Nigeria, Ghana, Senegal, Ivory Coast, Sierra Leone, Liberia, Kenya; so yeah we are trying to expand in sub-Saharan Africa.
Exactly, so we do have plans, though we are already selling to these countries, which continues, we hope that when we set up in Nigeria, we will be able to export to those countries and with the Africa free trade that is opening up, we want to capitalise on that. Hopefully, in the next two to three years, we will be able to export directly without having to visit China. So if that can happen in Nigeria, the country will reap that benefit.
So yes we have plans of setting up factories in Ghana and Kenya, and Kenya should be 2024, but we want to start with Nigeria. Once we get it right in Nigeria, we will be able to move to other countries.
Do you have plans of moving most of your operations to an African Country in the future?
The company is a global company, so we are starting from Nigeria, next level is Africa, but obviously, we have the Philippines, Latin America. When we look at the ease of doing business, the travel convenience, it makes sense to have the HQ in France. Even though we will be starting from Nigeria because we understand how Nigeria works in the African market, we are looking at Kenya, the next step. Still, obviously, in the next four to five years, we are looking to move to India, China, Latin America. Yes, we intend to move operations to Nigeria in the next one or two years, but we will keep France as the HQ so we will be able to reach out to the rest of the world quickly and that’s the only reason we are in France today.
In the future, are you going to equip your new products with this geospatial technology?
Yes, we would. We are starting from healthcare because the Vaccine refrigerator costs a lot, which is about USD3000 (about 1.5 million Naira altogether), so that’s a massive cost for pharmacists. And when you talk about covid, for example, you require about two dosages each, and we have about 200 million people in Nigeria making 400 million doses, and that has to be done rapidly. There’s no cooling infrastructure in the country. If that has to be done, clearly something needs to be done to the cooling infrastructure. The only way we see people or pharmacists or medical hospitals being able to have this equipment today is through cooling service. And that is why this geospatial space activity comes in because we can monitor the usage. People will pay based on what they’ve used, and we can only monitor that through geospatial technology. People can pay USD5 for usage, USD15 for usage, and we are also talking to investors to have this done. That for us is the only way we think we can help secure the health of Africans for this short period left to vaccinate.
And this infrastructure will be there forever. We are starting from healthcare because of the urgency that is required; however, we know that there is a massive opportunity in hotels. You put them in rooms where they will charge when they are being used and when they are not being used, they are not being charged. We are looking at other commercial usages. People selling frozen food is a massive opportunity because rather than putting one generator from morning to night, or running diesel because they want to cool their stuff, now they have a refrigerator that they can pay for monthly. A fixed fee which if they don’t use, they don’t pay. It’s a massive opportunity, but we are starting majorly from the healthcare industry at the moment. But I assure you that we will scale to other sectors to make sure that we take advantage of this geospatial technology.
What is the future of Koolboks?
Next plan is, of course, improving our technology, making it more accessible and efficient. We are also really working hard to have an assembly plant in Nigeria. We are partnering with a big French manufacturing company with operations in some countries in Africa. The idea is making refrigeration affordable and accessible to everyone in Subsaharan Africa.