EGYPT – Pylon, an Egyptian infrastructure management company for water and electricity companies in emerging markets, has raised a US$19 million seed round aimed at advancing software for water and electricity companies.
The round, which was a combination of debt and equity, was led by Endure Capital from the US, backed by British International Investment (formerly CDC Group), the development finance institution of the U.K. government.
Participating investors include Cathexis Ventures, Loftyinc Ventures, Khawarizmi Ventures, and several unnamed angel investors.
The company will use a portion of the initial investment to grow into additional emerging regions, such as Southeast Asia, Latin America, and Africa.
This funding is the company’s first venture round. CEO Ahmed Ashour said he and his co-founder, CTO Omar Radi, had bootstrapped Pylon since 2017.
“We believe that the electricity sector is following the footsteps of the telecom industry and the curve is starting to show,” said Ahmed Ashour, CEO of Pylon.
“So we just mirrored the billing solution, and with the data detection, we can detect who exactly is stealing electricity and where the losses are happening.”
Pylon seeks to solve several challenges for water and distribution companies, as they incur a very high rate of uncollected bills and thus miss out on huge revenues.
The startup is also experiencing high electricity costs and water theft in addition to technical losses on the grid and the network, whether for lack of maintenance or law enforcement.
These three issues contribute to these entities losing 40% of their revenues and give rise to the last issue, these entities being unable to upgrade their solution or have a smart infrastructure in place due to inflated costs.
The company builds solutions for these water and electricity distribution companies to make them efficient and stanch the bleeding.
Pylon uses software to gather data from the grids, analyze it, and detect where theft and losses occur along the supply process.
It then automates billing processes for the companies, similar to how telecom providers in these markets have done over the years.
The startup grew its revenues by 3.5x in 2021 and claims to be profitable. Aside from building a thriving business, the founders are particular about how Pylon’s smart electricity grids foster sustainability of the environment.
The company believes the market opportunity in the water and electricity distribution space is worth over US$20 billion across 10 emerging markets.
Despite the huge valuation, it is currently focusing on one-fourth of that figure which covers Egypt, the Phillippines, Brazil, and Africa.
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