• Thursday, March 28, 2024
businessday logo

BusinessDay

‘We make life easier for residential communities by optimizing their energy generation and consumption’

20230208_172415_0000

The growth of residential communities across Nigerian cities means there is need for solutions and innovative ways of managing them. This is what Venco, a new startup that uses technology to solve local problems and streamline processes in these communities, is doing. In this interview with CHUKA UROKO, the Founder/CEO of Venco, CHUDE OSIEGBU, offers insights into how the firm has, within a very short time, expanded its frontiers to seven major cities in Africa with 200 estates under management, where it is offering services that range from power and utility vending to security, utility collections, issue management, and access to amenities. Excerpts:

The property market is today awash with Proptech startups and it is becoming difficult to separate one from another. Tell us about Venco; is it just another technology out there?

Venco started early last year but before that time we had been operating as part of a different company called Mangala. I executed the branding. We had built up this project to help better manage estates but after a while we saw that it was becoming bigger and attracting more attention and energy and so we decided to scale up to what has now become Venco.

Where do we draw the line: Should we see you as an alternative or a new version of facilities management?

You should see us as a complement to facility management and facility managers. Currently, facility management is a very resource-intensive occupation where a lot of the work is still manual or automated. Our focus is more on the communities that are springing up which are the customers of these facility managers and what we have built are those platforms that can help these facilities and those facility managers that are working for them to be more efficient and derive more value from their activities.

There will always be need for someone who operates these communities and the operators may be the facility managers or the resident association themselves or even the developer. So, whoever that has that cap on and playing that role, our platform is there for them.

Do you take over from where they stop or work side by side with them?

Given the two options, closer to what we do is working side by side with them. Essentially, we are not competition for them in any way, we are facilitators; we facilitate the facility managers. We provide tools that make them more efficient at their job; we also take away those parts of the job that can be done by the residents themselves.

There are many processes that go on in an estate like paying bills, purchasing energy, etc which we have automated today such that we don’t have to tie down facility managers to reconcile payment or to vend energy for people. This enables them to focus on more valuable communal responsibilities which include surveying the environment, interacting with the residents, and doing the core things that facility managers should be doing.

Where is your point of intervention; what are the specific things you do that facilitate the work facilities managers?

We cannot answer that question without mentioning the processes that go on in these communities. Right from visiting the community, in my estate, for instance, the first place you would interact with Venco is at the gate because you would have received an access code that is generated by a resident. So security and access control is one of those processes.

Before communities developed and adopted this kind of platform, what would typically happen was that a call is put across by the visitor to the resident at the estate gate, but these hold traffic at the gate so we have eased that process.

When I know I am having a visitor, I just go to my resident app and generate an access code for you to present at the gate and the security personnel will verify the code to see details of your visitor. In addition, the person being visited receives a notification when the visitor comes and leaves as well.

There is a social reason that makes people live in communities. Instead of running individual generators when there is power outage, residents come together to use one generator or two to serve everyone and this is a lot cheaper. Once you have centralized power, you have to figure out a way to manage and control this power and build back individual consumption and this is done through the usage of prepaid meter and vending of energy.

We have also automated this vending process; we have our type of meter that gives real time statistics on residents’ consumption because everyone is very sensitive of how they consume energy because the cost is high. As individuals, we allow access to energy anytime from the bulk energy you receive and also allow you to see your trend of energy purchase and consumption. You also have the data to optimize that.

As a community, because they brought in this metering and vending, what you see is that the cost also goes down for the community and we are talking about service charges. A community doesn’t run itself, it has to be funded by its residents, and being funded by the residents there have to be a streamlined way to make sure there is proper upkeep of the environment.

Once the estate is more than 10 people, it is difficult to reconcile payment; they streamline all of that so that as you pay, you receive value immediately either for the energy you purchased or for the bill cleared for service charges. Some estates combine both, so that when vending energy, they could use that opportunity to remind yourself about the debt of the service charges.

These communities are filling a gap that ideally will have been filled by local government. What that means is that whoever is operating these communities is in a way a utility provider. The residents don’t have direct relationship with the PHCN or utility official, they provide their own power and water and even when they get power from the public utility, they save it in bulk not individually.

Our platform has become where people access proof of residence through the utility bill we generate on the platform. Another way we have helped is through issue management. There will surely be problems in any community be it with infrastructure or neighbours and you cannot leave the facility manager to handle that manually, especially if he doesn’t have a book where he can keep track of these issues, so that he can update how the residents have been dealt with.

The residents lose track and get upset that the issues they complain about aren’t dealt with, so we built an issue management system into the platform that enables people raise issues directly from the app and those issues get directly to the facility manager and he can then follow up and deal with the issues and also update the status so that the residents can see that it’s been dealt with.

It also gives the management of the estate global visibility of all the issues that have been raised, the rate of solving issues and what kind of issues occur more frequently, so they can have a holistic approach to addressing those issues.

Read also: Real estate firm allocates premium property in Epe to customers

Please, let us get a clearer sense of what you mean by energy vending?

One of the reasons for us to go all out to build Venco and raise fund for it is that multi-property settings or communities are becoming more of a trend. If you come to Lekki axis for instance, there are over 2,000 estates between Lekki and Ajah.

When you go to Abuja, PH or Nairobi, it’s all estates. The thing about these communities is that the energy distribution companies have found that from a revenue collection and deployment perspective, it is easier for them to deliver their energy and drop it at the gate and have the estate manage the way that they use that energy internally.

They will rather provide bulk energy to the estate than sharing energy to them. That way, they have a relationship with one person instead of everyone in the estate. From a resource allocation perspective, a distribution company would want to do bulk delivering of power instead of individual.

Seeing that that is the situation, it means that the estate has to become a distributor of energy internally. But remember that the distribution company is very unlikely to give 24 hours power supply so that means you must still augment with back up which, in most cases, is the communal generator.

What most estates do is that they blend the two sources of energy and charge a blended tariff rate per kilowatt and this is the way it works for them.

Having seen that there is an increasing need in the society, we have started selling our own brand of meters to private communities only particularly for the blended energy.

The equivalent of what you have when you buy energy online from the power distributors is what we have for the estate. We built the same infrastructure only for the estates on our platform. Our reason, for instance, is to make life easier for communities, so we are now using the meter that will capture from the vending of energy to the meter to help these communities to optimize their energy generation and consumption. For example, we have dashboards on our app where you can see your last month’s energy consumption, any data point you can get on your meter we bring it to the app.

But, beyond that, because of the increasing cost of energy, we are then able to use that data to advise estates on the proper sizing for the generator. Sometimes you are going to find that an estate is over stepped. When diesel was cheap that wasn’t a problem because that generator will still use the same amount it would have if the appropriate size was used.

So the usage pattern that we see on our platform is then able to help us make recommendations to these communities as to how they can optimize the generator power, that’s our interface with power.

Most times, this type of facility is urban-based, providing services for only the rich in highbrow locations. Is yours available in suburban communities?

Let me dispel the impression that we are only there for urban or highbrow areas. There are, at least, rural settings that are signed in on our platform in Ekiti, Ogun, and Enugu.

What kills interest in good technologies like yours is pricing. They are usually over-priced. In your own case, how affordable are your services?

Currently, in Lagos metropolis, we charge a subscription fee of N1,500 per occupied property per month as we run on a subscription service basis. If there is an unoccupied flat in the estate, we don’t charge it and we deduct our payment from the payments that are made on the platform. We don’t have to chase people around for payment. And this payment covers all utilities except an individual wants to do sub metering; that’s an individual having a different meter from the community.

We can’t give a different meter on individual basis, the community has to agree to receive power in bulk and distribute by themselves and many communities want to do that for many reasons.

They want to be able to use that control of access to energy to also make residents comply with the rules of the community. They want to also blend it with their back up energy.

The good thing is that we finance these meters. For example, we just deployed in a market in Lagos. A market is like an estate, the shops are like houses in the estate and the tenants in those shops are like the residents in the houses in the estate.

They have 1,200 stores in that community and what we have done is that we finance the whole 1,200 meters but because they can only operate the meter on our platform, as people are buying energy and vending, we draw down the cost of that financing plus interest. We have made sure that buying a meter is not challenging for our users.

We are also helping with collection and streamlining those things, our position in the community then helps us to do more, we have built this platform, from there we can finance the community, meters for community, generator or even the residents. We are creating an economic profile for them which they can use for an embedded demands.

It starts from the basics and then we can build more and more even up to financing rents because we know where they live, we can see your economic profile. A lot of things that make it difficult to do lending, by the nature of our business, we have their information and that makes it less risky for us.

With all you have done so far, how can you rate the level of patronage of your services?

We are currently in seven cities across Africa with more than 200 estates using our facilities and platform. Lagos is where most of our deployments are. We are in Lagos, Abuja, Port-Harcourt, Enugu, Ekiti, Ogun, Nairobi and we will be in Ibadan soon.

We crossed the 200 estates line last year and what that did was, for the past couple of years, we have been doubling the number of estates we have and by the end of last year, we closed 101 estates and now we closed with 200 estates and our target for this year is to add 200 estates.

We recently announced a $670,000 fund raising, and most of our fund raising were from agent investors and syndicates, as well as from one venture capital company.

To what extent have you been of use to commercial properties users on the issue of energy which is affecting businesses and their bottom-line?

Firstly, we have to segment the commercial organizations that we serve. We are firstly a platform for communities which means that commercial customers that we are relevant for are those commercial settings that exist in communities hence the market example I gave earlier and office complexes.

Speaking about those kinds of commercial organizations, our solution has become very relevant. For example, markets in Yaba use the platform, they use it for facility management, we finance meters for them and they use our platform for collection as well, because the people in those shops either pay rent or service charges.

They were particularly under pressure to adopt a platform like ours because they started seeing lots of challenges around energy, they have about 2-4 megawatts (four generators). They have a lot of generating capacities but they didn’t have meter, so they were basically metering people on estimated basis. They started to struggle because as the cost of diesel was going up, it was becoming harder to collect and it’s a market, therefore you must generate power.

We were able to provide these meters, the barrier to entry was that they didn’t have to shell out a lot of cash to pay for it. We financed the meter for them and they are paying over the months. They were then able to do the utility vending on these meters. There is something unique about the metering, the meters we deployed for them are prepaid energy meters. What the deployment of prepaid energy meters do for residents in estates or communities is that they allow them to get the cash up front that is payment before usage, as opposed to the alternative which is begging people to pay after usage on monthly basis, that has changed the dynamics for them.

Power consumption has reduced, as everyone now has to pay for their fair share of power, heavy equipments are being moved out of the market and people managing their consumption which is putting less stress on their power generation equipment.

Interestingly, we talk a lot about power even though our platform is beyond that, because power is one of the fundamental issues that everybody in Nigeria including these communities face but the interesting thing is when we were deploying in Kenya where they don’t have issues with power, they have the same issue with water. So the way we sell prepaid meters in Nigeria is the way we sell prepaid water meters in Nairobi.

Water is a problem there and because the government can’t provide it for them, they have to account for the water and make sure that the cost of generating that water can be recovered from the residents..

What do you think is the future of what you are doing, how bright or otherwise is it?

Urbanization is increasing all around the world, but with the way it’s going, in the next two or three years there will be 500 million people living in urban areas across Africa and in another 20 years, it would have increased to 1.5billion.

With urbanization increasing, without land increasing, what it means is that places for people to live will be more integrated and more communal. The era of buying land and building by oneself is fading out, so new developments now are blocks of flats or highly integrated estates. You hardly see a building standing on its own now.

Essentially, the more efficient way for people to live will be in communities because that’s what will maximize resources both land and living. Anywhere there is that resources, they will need an operating system and where they need an operating system, Venco wants to be there.

I want to emphasize that we are not only about power and utility vending; we are all about all the processes. I have outlined to you how we play in security; utility vending be it power and water, utility collections, issue management, and access to amenities.

Once we have laid this foundation, we want to build on it because when a whole community is using our platform, we want to be able to aggregate their demands. There is something they are wasting and that is their communal power.

As we start these communities, we want to bring out a market place so that we can put third party vendors, and people who supply services in touch with these communities and enable them to do what we call, Whole Incomers, so as I order Cway water, all my neighbours get a notification to join on the order, and that way they can get a deal to a dealer who can deliver on agreed days and time of the week to their community.