Egypt’s Pylon gets $19 million to scale software for power and water distribution companies – TechCrunch

Power polesAn Egyptian infrastructure management platform for water and electricity companies in emerging markets, has raised US$19 million.

A combination of debt and equity, led by Endure Capital is based in the US, backed by British International Investment (formerly CDC Group), the UK government’s development finance arm. Participating investors include Cathexis Ventures, Loftyinc Ventures, Khawarizmi Ventures and several unnamed angel investors.

Pylon currently operates in Egypt and the Philippines. Part of the seed investment will allow Pylon to expand into other countries in emerging markets, including Southeast Asia, Latin America and Africa. This funding is the company’s first round of venture capital. CEO Ahmed Ashour said he and his co-founder, CTO Omar Radihas started Pylon since 2017.

Ashour has been in the metrology and utilities business for over a decade and leads the deployment of smart metering technologies – especially hardware – across Africa, Europe, Asia and Middle East for different companies.

In 2016, he found a gap in the market for solutions tailored to the needs of electricity and water distributors in Egypt and other emerging markets. These units use software designed for advanced economies with different needs and challenges from Siemens, Oracle and SAP, he said, that cannot meet the needs of distributors in other regions. Emerging Markets.

“We have seen them [foreign software] used in other projects but final experienced great failures. We have started [Pylon] to replace them because their solution failed on the ground,” Ashour told TechCrunch on a call.

CEO says Pylon solves several challenges for water and distribution companies. First, they suffer a very high percentage of uncollected bills and thus miss out on huge revenues.. Second, they incur high electricity costs and water theft. TuesdayTechnical losses occur on the power grid and networks – whether due to lack of maintenance or law enforcement. These three issues contributed to the loss of 40% of revenue for these units and led to the final problem – they were unable to upgrade their solutions or have smart infrastructure due to high costs.

Pylon builds solutions for these power and water distribution companies to make them efficient and limit bleeding – the company calculates hundreds of billions of dollars in losses (in dollars) across markets emerging every year. It’s a great opportunity to increase sum it up revenue and top revenue of those utilities increased by 50%.

Here is how it works. Pylon’s software collects data from the grids, analyzes it, and detects where theft and loss have occurred during delivery.. It then automates the payment process for companies, similar to How have telecom service providers in these markets done over the years?.

With no upfront investment, Pylon says it can help utility companies reduce losses to 8%, in addition to improving their top revenues. The company says it doesn’t charge customers upfront fees for hardware. Howeversmart metering as a service (SMaaS) model makes it easy for cash utility companies to deploy their solution at scale.

“We trust that the electricity industry is following in the footsteps of the telecom industry and the curve is starting to show. So we just reflects the payment solution, and with data discovery we can detect exactly who is stealing electricity and where the loss is occurring,” said the CEO.

“Also, since those add-ons are all cash-strapped and non-upgradable, we offer them this solution as a subscription model. So it’s a low-investment model where they sign up with us, pay about 10-12% of the initial cost of their previous solution, and can recover the revenue. So just by signing with us they start to earn more and increase their bottom line and profits. ”

More than 12 different utilities (seven in the private sector and five in the public) use Pylon. They serve over 1 million metering endpoints across 26 distinct meter models in Egypt and the Philippines.

Pylon grew revenue 3.5 times in 2021 and declared a profit. But in addition to building a thriving business, the founders spoke specifically about how Pylon’s smart grid promotes environmental sustainability.

“We trust great time in our role in helping the environment and helping with the challenges we currently face,” said the CEO.. “Emissions from the power sector are one of the biggest sources of CO₂ emissions on the planet. We can make electricity efficient and reduce [emissions] 25% when the utility willunsubscribe with us. ”

One of its goals is to achieve 1 gigaton of total CO .₂ reduce emissions by 2035. On the other hand, water loss in emerging markets also reach over 45 million cubic meters per day. “Pylon can reduce this by up to 22%, potential provide enough water to serve more than 40 million people,” the company said.

Y Combinator-backed startup believes market opportunity in electricity and water distribution is worth more than $20 billion across 10 emerging markets. However, it currently focuses on a quarter of that number which includes Egypt, the Philippines, Brazil and Africa.. FinalThe plan is for the Egyptian startup to capture more market share over time, Ashour said. expanding into Southeast Asia, another fragmented marketincluded in the card.

But these are all long-term predictions. In the near future, next year to be exact, Ashour says Pylon plans to hit 3 million meters across its markets, representing four times growth year-on-year. Startup worked with a lot of Companies across two continents have deployed more than 2 million Pylon smart grid technology endpoints across 15 distribution companies.

Proper use of your technology will be essential in this next phase of growth. As a result, securing this seed financing – one of the largest in the MENA region – gives Pylon the opportunity to advance its engineering and product development.