Jibu - Infrastructure Franchising

Antonia has been a part of Jibu's core leadership team for the past five years and central to its success. She has supported the growth of its early markets as well as led its expansion into four new countries. Antonia is experienced in various roles including management, operations, research, accounting, microfinance and general business consulting. Prior to Jibu, she has more than 10 years working experience, with over 5 years managing operations of projects and 7 years working as a business consultant. Previously, Antonia was a Senior Research Manager for Ipsos (U) ltd, a leading research company. It was her responsibility to ensure the projects were run efficiently and cost effectively. As a business consultant, she has worked with many SMEs to streamline operations, develop business plans, conduct product reviews and document organizational policies and procedures.

Antonia is co-submitting this application with Galen Welsch, Jibu's co-founder. Bio here: https://jibuco.com/franchisor/

Urban infrastructure and essential services in the majority of the world's low income, emerging markets remain unaffordable and low quality. They have not kept pace with urban expansion, or purchasing power. Simultaneously, unemployment is high and opportunity to own a business that can grow beyond subsistence is rare.

Jibu has invented a rapidly scalable business model that decentralizes ownership and production of essential services, shifting the locus of power to local entrepreneurs in a way that allows them to take ownership of addressing these infrastructure gaps one neighborhood at a time. By combining the best elements of the franchise business model with asset financing, Jibu is able to provide entrepreneurs with both the resources needed to grow and the tracks to run in. Jibu is in seven countries, 2000 retail points, and serving hundreds of thousands of customers daily. We are growing rapidly.

Lack of meaningful business ownership opportunities and massive under-employment trap many people in emerging markets to an undesirable standard of living. At the same time, about a billion people do not have access to daily necessities such as affordable drinking water. 

In the markets where Jibu operates (Uganda, Kenya, Tanzania, Rwanda, Burundi, DR Congo), unemployment is as high as 60% among youth. At the same time, small business ownership and growth is stifled in a large part because unsecured financing is virtually impossible and secured financing rates are more than 20% APR. Even if entrepreneurs are able to raise informal financing from friends and relatives, they then face a myriad of doing-business challenges including those related to local regulators, supply chain input costs and reliability, and a lack of business management know-how. 

Latent entrepreneurial capacity exists to solve the essential necessities gaps in urban emerging markets, but an avalanche of systemic barriers suffocate small business before it can grow past a subsistence stage thereby limiting job creation and economic growth.

Jibu's key innovation is combining financing with a technology-enabled franchise system.  

Jibu franchises are high-visibility retail points with on-site production / manufacturing. Franchise owners pay a franchise licensing fee and Jibu builds out a franchise, provides training, and coordinates launch with the new franchise owner.

Safe drinking water is the anchor product (we are able to treat water from any source), and the franchise network is a platform for all essential services which now includes cooking fuel (LPG) and fortified porridge, a staple food in East Africa. 

We provide entrepreneurs with regulatory certifications, supply chain economies of scale, a common brand, Jibu business management app suite of tools including PoS and CRM, water treatment equipment, and business know-how down to the day to day standard operating procedures. Because of the unfair advantage that a Jibu franchise provides to entrepreneurs, we are able to also provide affordable start-up financing. (In a traditional franchise model, franchisees capitalize the system.)

Jibu's dual mission is equip local entrepreneur with high-growth businesses, and to make basic necessities more affordable to the urban communities they serve.

Top-performing Jibu franchise owners generate more than $150,000 USD per year per franchise with a 20-25% take home profit, and breakeven within months of launch. Each franchise serves a 2-3 km radius. Our owners have come from various backgrounds that include a security guard, a DJ, and a T-shirt salesman.

Jibu operates in seven countries across 2000 resellers and more than 120 production franchises. Entrepreneurs employ more than 1,500 FTE and serve more than 200,000 customers daily with safe drinking water refills. All customers previously did not have safe drinking water available at their tap, and the majority previously boiled their water to make it safe to drink. 

We impact the entrepreneurs we equip, and the communities they serve with affordable essential services. Since 2015 Jibu has created more than two new FT jobs per week.

Jibu franchise owners (50% of which must be women) come from a variety of backgrounds - from former security guard to former t-shirt salesman to MBA-earner. Via a highly competitive process based on non-traditional vetting criteria, we offer the opportunity to own a Jibu franchise only to entrepreneurs who have first owned and operated a Jibu reseller point. Top performing owners are invited to apply. The key to the Jibu network's success is Jibu franchise owners- and identifying latent, top talent that others have overlooked is core to our growth. 

My (Galen's) founding motivation - more so than drinking water or health - was how to create an eye to eye, peer-partnership model with local entrepreneurs that would allow them to create solutions for themselves. I worked as a volunteer in a village in Errich, Morocco for two years and learned Berber, which allowed me to develop close ties with my host community. I learned that most of the traditional development work approaches were top-down and fundamentally patronizing - ignoring the community's assets and dreams. The partnership models created a cycle of dependency rather than economic independence. Jibu means the "Answer" or "Solution" in Swahili. I co-founded Jibu in the belief that we could create an opportunity company that enables local entrepreneurs to solve issues for themselves in their own neighborhoods. Jibu's vision is to build a new partnership model that shifts the locus of power to local entrepreneurs in a way that allows them to make essentials affordable to their communities. Local ownership and decentralization of power is the future. Please read more about my inspiration here: https://nextbillion.net/as-imp... 

I, Antonia, joined Jibu because of this mission and vision. My passion has been to make this a reality.

Both Antonia and Galen share a passion for shifting the locus of power from old markets to new. We believe in the future of Africa, and the future of the world's low income urban populations. Giving latent talent the opportunity to blossom is what motivates us. 

Antonia is Ugandan and has lived in Kampala (capital city) her whole life. Galen is American and has lived in Africa for the past ten years (starting with the Peace Corps in 2010). Together we are able to catalyze the scale of this business globally, with Antonia representing the reality of urban emerging market needs and Galen acting as liaison between old and new markets.

Our traction is the best proof of our capability as a leadership team. This year, Jibu franchise owners will sell more than $10M worth of Jibu products to more than 200,000 daily customers across seven countries. 

Our management team is based in our Kigali, Rwanda, Kampala, Uganda, or Nairobi, Kenya offices and represents more than a dozen nationalities. Our Board of Directors is also diverse and spread across Asia, Africa, Europe, and the US. Most important, though, are Jibu franchise owners and the Franchise Council. Read more about our Team, Board, and Franchise owner biographies here: https://jibuco.com/our-team-2/ 

Jibu has failed in two countries - DR Congo (2014) and Zimbabwe (2018). In 2018, we restructured and replaced the entire Jibu middle management team. Since 2015, we have experienced two coups, Ebola, one war, countless cases of corruption, COVID-19, and more. But still we have continued to grow by more than 50% YoY. 

Our core value is, "Every challenge is a gift and an opportunity." This culture, backed up by a fundamentally resilient business model (decentralized ownership), has allowed us to thrive despite the challenges we have faced. We have just re-launched DRC last year (2019) and it now one of Jibu's fastest growing markets. Since our restructure in 2018, we have accelerated our rate of growth, strengthened the Jibu brand in the market, and vastly improved the motivation of our team. 

We are fighters.

In the process of launching Jibu Zambia, we reached a stall with local regulators. Our partners had invested heavily only to face more than three months of being prohibited from beginning operations. The whole team was losing morale, and we were on the verge of pulling the plug. 

I realized that we needed to quickly get through the regulator hurdles, and more important we needed to rejuvenate morale in the team. This meant hands-on, 1-1 time with everyone involved. I flew to Lusaka to accelerate the regulatory approvals and spent two weeks with our partners. I invited a Board member to have a call with our partners and met 1-1 with the Jibu global team to motivate them in their support of our partners. After daily meetings for two months, we got things back on track. 

My leadership style is to get my hands dirty and support directly, but also to address the team's emotional needs. Both the practicing and the preaching is critical for leadership!

At the core of our game-changing innovation is the integration of franchisor and financial services, successfully contextualized to emerging markets. This new business model is the foundation that enables successful use of decentralized water treatment technology, and app-based business management tools for franchise owners. 

Regarding competition: Informal business operators do not grow beyond subsistence because they do not have a trusted brand, affordable supply chain inputs, training to succeed, or regulatory licenses. Big businesses, on the other hand, fail to serve the underserved emerging market population because they are unable to establish community-intimacy - the relationships with customers that typically only informal business owners can accomplish. Jibu combines the advantages of big business with informal to allow for a high-growth, replicable business. 

Water treatment for rapidly growing emerging market urban populations must be locally driven, and must be decentralized if it is to keep up. Jibu has created the first decentralized, scalable, and profitable safe drinking water solution for emerging markets.

Daily served today: 212,000

Daily served in one year: 300,000

Daily served in five years: 1.6M

By 2025, Jibu plans to launch hundreds of new locally-owned franchises, create thousands of jobs, and reach over 7 million people with affordable drinking water and other impactful products. Our total addressable global market is vast, with about 1 billion people living in environments where the Jibu model is most applicable - 400 million in Africa alone. Our goal of reaching 7 million by 2022 is less than 1% of 1 billion – we are only scratching the surface!

Corruption

Systemic and/or individual corruption slows and convolutes productivity

• Rely on local partners and board members to mitigate  
• Attempt to proactively build high-level relationships in each organization and with policy makers
• Budget for occasional slow-downs 
• Attempt to leverage political clout and networks when needed
• Avoid bribes 

Currency fluctuation

Products sold in local currency/payback to investors in $USD. Fluctuations are common and can be large, mostly in the direction of $USD strengthening

• Keep enough cash in each country to run operations without being forced to move money between countries at the wrong time 
• Do our best to time the movement of money to take advantage of favorable exchange rates  
• Change our pricing as needed
• Hedges
• Keep dormant money in interest-bearing accounts 

External challenges: war, disease, broken governments, stifling bureaucracy, etc.

Unpredictable exogenous events can hurt our business

• Franchisees are used to navigating these challenges successfully - a strength of our model 
• Sometimes these challenges actually provide new opportunities.

Unknown unknowns

Emerging markets rapidly change and unknown, unconceived risks arise

Maintain 5% cash reserve and 5% risk loss expense item in our pro forma

Responses are embedded in the responses above.

Partnership is our model’s core DNA. 

• Jibu achieves success only when our equal-partner franchisees do. 

• Our AMF sub-franchising partners are the prime drivers of our international adoption at scale, leveraging their networks and platforms to contextualize and grow Jibu in their countries. 

• Supply chain is critical to our economies-of-scale advantage. We work hard to develop and maintain win/win partnerships with all of our global suppliers. 

• Before launching, partnering with governments at the highest level possible creates an ‘umbrella’ authorizing environment, enabling better partnerships with community leaders and various regulators. 

• Our many stakeholders provide invaluable support. 

Our most important partners are franchise owners. 

Besides franchise partners, suppliers and government regulators are our most important partners including:

- Healing Waters International (HWI) which manufactures and assembles water treatment systems. 

- UNBS, RSB, KEBS, TBS, BBS, and ZABS are the local bureaus of standards that regulator drinking water quality in the current markets where we operate. 

Franchises pay a licensing fee pre-signing of the franchise agreement. JibuCo (franchisor) then builds out the turnkey franchise, including the retail front and production line. Franchisees then produce and sell refills to customers. Refills is their primary revenue driver. 

Besides the one-time franchise licensing fee, JibuCo (franchisor) earns revenue primarily based on a Franchise Network Fee (FNF) - a per liter fee. This fee functions as an operating lease on the water treatment system and Franchise in perpetuity. Against capitalization costs (about $20k per franchise launch), Jibu breaks even in about 2 years on average. Each franchise functions similar to an annuity in the long term for the franchisor. 

For non-water products (currently fortified porridge and LPG), JibuCo distributes the products centrally from our warehouses and earns a margin (~20%) on each sale. 

We are a for-profit company that aims to be fully commercially viable and able to attract affordable commercial capital for continued growth investment. We are ~18months from being EBITDA positive from earned revenues (primarily franchise fees from franchise water sales).

We successfully closed our Series B financing round in 2017 ($6.5M.) This was also blended capital, which ~80% equity and 20% grant.

Our Series A / Seed round was ~65% grant and 35% equity. 

Our earnings come primarily from our Franchise Network Fee, from COGS, and from franchise licensing fees (in that order of significance.) COGS and franchise licensing fees are not a profit center. Our success is contingent upon franchise success: same franchise growth in volumes. 

Jibu is currently raised a Series C round of financing with an expected blend of debt (30%), equity (60%), and grant capital (10%). We expect this will be our final equity offering in the near or mid term as it will allow us to reach cash flow positive which maintaining our current growth rate (40% YoY.)

We anticipate that we will be -700k EBITDA in 2020 by year end.

The Elevate Prize will allow us to maintain momentum in reaching our target of equipping hundreds of emerging market entrepreneurs to make essential services - like safe drinking water - affordable to millions of underserved customers. Specifically:

1) Elevate will help to catalyze the close of our Series C financing round. We are consistently hitting targets in spite of the COVID-19 lockdowns, but need momentum and to keep conversations warm with potential investors to successfully close our Series C.

2) Elevate will give us access to technology experts who can help bring SEMA to the next level. 

Personally, I am excited about the professional management and development services, and connections with mentors/ influences. Have been born and spent my entire career in Uganda, I believe I have a lot to gain from having access to these incredible advantages.

Elevate will allow me to grow personally and professionally, and will simultaneously allow Jibu to find new partners for expansion into new markets globally. Besides the funding itself, it will also help with our ability to leverage the prize to find additional investor-partners.

We are specifically interested primarily in:

1) Connecting with experts who can help us to develop and implement an ERP. Wrapping our LMS, franchisee-app, and all other data into an ERP is necessary for scaling. 

2) Finding Regional Developers to expand Jibu into new countries.

3) Closing our Series C financing round. Solve may not directly connect Jibu with investors, but it will provide us with a powerful platform and credibility to push those conversations across the line.