Partner Spotlight: Acumen
Since its founding in 2001, the non-profit Acumen has seen the cookstove and fuel sector evolve from a nascent idea to one that is showing early signs of commercially viable business models. Acumen is a non-profit organization whose mission is to change the way the world tackles poverty by investing in companies, leaders, and ideas that serve the poor with critical goods and services in developing countries. Historically, the global non-profit and other investors found it challenging to identify investable opportunities in the cookstove sector. Barriers to investments came from a lack of customer awareness, a lack of uniform and aggregated data about the quality and efficiency of stoves, free or heavily subsidized cookstoves which crowded-out private enterprise, and risky business models that relied heavily on subsidies from carbon revenue.
Each of these barriers have been addressed in different ways over the last several years, with many of the efforts being led by the Global Alliance for Clean Cookstoves and its partners. Significant investments in robust research and customer awareness campaigns have helped to increase market demand and provide greater opportunities for commercial enterprises to serve such demand in a profitable and scaled manner. Also, tools such as the Alliance’s Clean Cooking Catalog and related stove quality and efficiency data have provided capital providers with increased transparency into the numerous products in the market, giving investors more confidence in product efficacy and an increased ability to distinguish performance amongst competing products. These two market building activities have greatly helped to jump-start market-driven solutions and attract private sector capital and enterprises. Lastly, with the collapse of the carbon markets in 2012, several enterprises pivoted their business models and are no longer building carbon finance into the their plans for financial sustainability. This pivot has presented investors with less risky business models built on stronger unit economics and less subsidy from carbon finance.
Acumen recently made its first two investments in the cookstove sector and is excited about the innovation each model brings to the sector and their respective potential for scaled impact. Acumen invested in Burn Manufacturing in early 2015 in effort to expand local manufacturing capacity and to help prove their business model’s financial viability. Burn has seen strong sales growth in the last year and has become a leading brand name for fuel-efficient charcoal stoves in Nairobi on account of the highly regarded stove design and performance. In April 2015, Acumen invested in BioLite, a global energy access company that sells off-grid energy products to recreational markets in developed economies and recently launched its flagship clean cookstove, the HomeStove, for low-income off-grid populations in India and East Africa. BioLite’s business model utilizes “parallel innovation” in which core technologies are leveraged across both business units and common resources and knowledge can be shared company-wide. The innovative HomeStove utilizes thermoelectric technology to generate electricity from the wood-burning cooking process, which is then used to power a fan that enables a smokeless cooking experience for the user.
Acumen leveraged the work of the Alliance throughout its diligence of these investments, utilizing the Alliance’s deep sector knowledge, market research, and vast networks to fully understand market dynamics and the risks and potential opportunities in the sector. Acumen has also partnered with the Alliance’s Capacity Building Facility to provide targeted technical assistance to Acumen’s cookstove portfolio companies in efforts to help them scale their enterprises and impact more quickly. Acumen is excited about its emerging work in the cookstove sector and the ability to help scale clean cooking solutions to some of the world’s poorest communities. Follow Acumen on Medium as we share new ideas and stories and visit our website for ongoing updates on all of our work.