Published by Jaco Maritz on
Ayoola Dominic, co-founder and CEO of Koolboks
Over 90% of retail trade in Nigeria is through informal channels such as open-air markets and small kiosks. However, for those traders who sell perishable items, refrigeration is a major challenge owing to the country’s erratic electricity supply.
A company called Koolboks, founded in 2018 in France, has identified a business opportunity to provide small businesses in Nigeria and beyond with cold storage solutions. It has developed an off-grid solar-powered unit that works as a refrigerator or freezer, which can stay cool for up to four days without power and sunlight. The units also come with two LED lighting bulbs and USB ports for charging mobile phones. Koolboks has integrated pay-as-you-go technology, which makes the units more affordable. The business recently closed a US$2.5 million seed funding round, led by Aruwa Capital Management, bringing its total investment to date to $3.5 million.
Jaco Maritz speaks to Koolboks’ Nigerian-born CEO and co-founder Ayoola Dominic, about how he started the company, the business model and why it has opted to open a local assembly plant in Nigeria.
I’m a pharmacist by training and worked in the healthcare sector for around 15 years across different disciplines. My last job was as the operations director for the EMEA region at the French pharmaceutical group Servier. Nigeria was one of the countries in my portfolio. Because of inflation and currency-related challenges, we realised that to adequately penetrate the Nigerian market, we had to acquire a domestic pharmaceutical manufacturing firm. I led the team that acquired a local company and we grew the business by over 300% in four years. It has been one of my biggest achievements.
I felt the need to do something different and explore my creative side. My co-founder Deborah Gael and I started working together to revolutionise how people experience cooling. We did research and talked to people who could help us. We recruited engineers – some part-time, some full-time – and launched the R&D process. For the first few years, the business was bootstrapped with savings from the co-founders.
In the back of our minds, we had the idea to develop cold chain products for the healthcare sector, for the storage of vaccines, for instance. Yet, we began by manufacturing cooler boxes for the camping industry in Europe and managed to get quite a lot of orders from Carrefour and other French retailers.
Small shopkeepers are Koolboks’ primary customers.
It didn’t take us long to recognise the opportunity to sell the product to those who needed it most: informal shopkeepers in Africa. We attended a conference in Kenya where we met several distributors who saw the product as a no-brainer for Africa and we received several large orders. We’ve since stopped supplying the camping industry and are now fully focused on sub-Saharan Africa.
Today, 90% of our sales are to small businesses that require refrigeration to run their ventures, from people selling frozen fish and cold drinks to restaurants.
We have two types of channels, B2C and B2B. Nigeria and Kenya are our B2C markets where we deal directly with our end users. In other countries, we sell to businesses, which then sell it on to their customers on a lease-to-own basis. However, our primary focus is to grow our B2C customer base.
We’ve sold close to 3,000 since our inception. This year, our target is 7,000 units and $7 million in revenue.
Our freezers have become much bigger. Initially, we had a small 25-litre unit; we now have up to 1,000 litres. The product has also evolved to retain cold temperatures for a longer period when there is no sun. Our ice thermal refrigeration technology uses solar energy to make ice within special compartments in the freezer. This allows for continuous refrigeration for up to four days even without solar.
Koolboks freezers come with two LED lighting bulbs and USB ports for charging mobile phones.
In addition, we’ve added light bulbs and a USB charging port. Another important development was the pay-as-you-go integration to make the products more affordable. We can now also remotely monitor the units, enabling us to inform our customers of their status and alert them if there is not going to be much sunlight for a few days so they can take the necessary steps to conserve energy.
Customers pay a deposit and settle the balance in monthly instalments of about $20 for up to 24 months. Because the units are controlled remotely, we can switch them off if somebody doesn’t pay. Some 90% of our clients pay in instalments, and the pay-as-you-go option is one of the main reasons our business has been successful.
We created ice compartments within the refrigerator. This was an existing concept, for the storage of vaccines, for example, but we have adapted it. During the day, when the sun is shining, ice is made in these compartments. At night, the ice maintains the temperature of the freezer until the sun is out again. We don’t use water for the ice but special liquids that guarantee lower temperatures for a longer period. These ice compartments are complemented with lithium-ion batteries.
Currently, the units are manufactured in China. However, our assembly plant in Nigeria is almost complete and we should have the first production by January next year. We will import the components from China and assemble them locally.
Some people might wonder why such a small company would go into local assembly so fast but shipping empty freezers from China just doesn’t make sense. Importing the loose components means we can fit so much more into a single container. By assembling locally, we also qualify for tax exemptions, which we can pass on to our customers to make the product more affordable.
Tags: Aruwa Capital Management, Ayoola Dominic, Koolboks, Nigeria
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