☀️ Is This SA's Next Power Shift...?

Plus: Eye in the Cape sky 🧿, Takealot goes limitless, SA bans hate & keys to growing SA’s innovation space.

May 10, 2024

Election juice? A local AI stealth startup launched Mzanzi.ai a dedicated SA chatbot you can go grill about anything related to the upcoming general elections.

In this Open Letter:

  • Power shift: Readying the war chests for SA’s cheapest kWh.

  • Eye in the Cape sky, Takealot goes limitless & SA bans hate.

  • Big leaps: How to grow in SA’s innovation space.

  • Your ideal post-uni destinations: The results are in.

  • Free stuff: Share The Open Letter & get business tools.

In partnership with

What Happened to Load-Shedding?

Startup war chests are readying for SA’s power inflection point

We all have that one friend at the braai who said: “Watch how they end load-shedding leading up to the elections…” And, alas, it’s happening. 

But don’t get too excited. 

Hello darkness, my old friend…

According to former Eskom CEO, Andre de Ruyter, the public utility’s diesel budget for 2024 is R24 billion, four times that of previous years. And chances are they are running some extremely expensive diesel turbines non-stop to keep lights on, for now. 

However, some say the reduced load-shedding has to do with 6% less demand due to solar PV installations and somewhat better powerplant performance. 

South Africa’s solar installations delivered around 4’400 MW towards the end of last year, with more being installed since then. For context, according to our friends over at EskomSePush’s in-app insights, our available capacity yesterday was 28’907 MW, with peak demand at 18h00 just over 28’000 MW.

Shoutout to ESP for the graph

The Eskom Death Spiral

Getting Eskom out of its financial woes is very complicated. 

They have to cope with:

  • Ageing, high-maintenance powerplants 

  • Cable theft and sabotage

  • Losing paying customers to solar 

  • Non-paying municipalities

  • Pressure from the social side of the government to give away electricity

  • Not to mention coal issues – wet coal, rocks mixed into the supply, stolen coal, etc. 

All of this means one thing, electricity prices will likely keep rising faster than inflation.

Infographic via poweroptimal.

On the other hand, the cost of a solar setup at your house is coming down quite rapidly. 

Fact is, somewhere in the near future there will be an inflection point, where the cost of buying electricity from Eskom will be more than financing or renting a solar setup.

It differs depending on where you stay (clouds, direction of panels, etc) and your setup, so don’t take your mate’s word for it. But some household systems have seen a neutral or even positive return, while others are close.

SA’s glorious solar-powered future, according to AI.

War Chest, ready

It makes sense then that local solar renting service GoSolr is getting a war chest of R10billion ready. 

Depending on how much power you need (or how little you can live with), a Solar PV installation can set you back anywhere from R60’000 to R350’000. This means that with their R10 billion war chest, GoSolr can install anywhere from 28’500 to 166’000 solar solutions, which could see their annual revenue boosted to north of R2bil. (Their starting plan is R1’399 per month).  

And GoSolr is but one player in the game.

We also have the likes of Versofy, Soly and Hohm, not to mention buying your own solar from the likes of AC Direct or SA banks offering finance to purchase a system outright – all contributing to less demand from Eskom.

Are there still opportunities in this space?

Even with all these players in the space, there’s still plenty of room to innovate and grow – there are 17.8 million households and over 2.6 million businesses in South Africa. And if renting a solar system ends up being much cheaper than buying electricity from Eskom (which we’re betting it will be), it’s reason to believe we’re only getting started.

Not great news for Eskom, but loads of opportunities for the private sector. We’re watching this space (with the lights on… we have solar).

Refer one friend to sign up to The Open Letter and view our top opportunity pick for this trend (and all future trends we cover).

Get your sharing link here.

IN SHORT

💰 Money Moves. SA independent payments processor, Adumo, has been acquired by NASDAQ-listed FinTech group, Lesaka Technologies, for a cool R1.59 billion.

👁️ Eye-in-the-Sky. Cape Town has a new crime-fighting supercop. An information, surveillance and reconnaissance (ISR) aircraft called Eye-in-the-Sky.

🥧 Apple Pie. Apple has just launched its new iPad Pro featuring the M4 chip (to power AI stuff), and at only 5.1mm, it’s the thinnest Apple device yet. Check out the launch vid, Crush!, that’s got the internet a little hot under the collar.

🎯 Ready. Aim. Fire. Local e-commerce Takealot is turning up e-commerce heat with the launch of MORE, a monthly subscription service offering free same-day delivery & collect options, plus a host of other benefits, including free Mr D grocery and takeaway delivery.

🖋️ No to hate. Be careful who and what you “@” going forward. SA President Cyril Ramaphosa has signed the Prevention and Combating of Hate Crimes and Hate Speech Bill into law.

🗺️ Intercity FaceTime. A public exhibition called “The Portal” connects NYC and Dublin for people to interact publicly via a video link, and huge screens on either side have just opened. Annnnd it took all of 3 hours for someone to get arrested.

A WORD FROM OUR SPONSOR PARTNER

Want to learn from founders who’ve done it – like Africa's only two-time unicorn founder, Iyinoluwa Aboyeji, or Mia von Koschitzky-Kimani, who sold her first startup to Mastercard?

If so, apply for our inaugural ‘How to Startup’ Fellowship, in partnership with Future Africa, before applications close on May 14th!

HOW WOULD YOU BUILD IT?

How to Grow SA’s Innovation Space

If you’re as passionate as we are about finding solutions to develop SA’s startup ecosystem, this week’s podcast is for you. We sat down with veteran talk show host and radio presenter-turned-entrepreneurship insider, Kieno Kammies, co-founder of Innovation City, to unpack what’s next to power innovation in SA.

Catch the Highlights 

1. The number 1 thing SA tech needs to BOOM

With unique ideas, great tech, awesome platforms, serious VCs and corporates actively looking to work with scale-ups, it’s time for founders to get over ourselves and take action – get the insights here.

2. The secret to taking leaps of faith

Knowing your purpose, employing your current skills and scope, and calculating your acceptable losses – learn the winning formula.

3. Why SA’s so perfectly positioned for ecosystem success

“Half” the German ecosystem spends 3–4 months a year in Cape Town because we’ve built such a thriving, attractive space and it’s only going to grow – see how right here.

You can also grab the Spotify and Apple Podcast links on our website here.

YOUR VOICE

We asked where you would have liked to travel to post-varsity/school, and Cali’s the way…

🟨🟨🟨⬜️⬜️⬜️ 🏕️ Somewhere disconnected from the world (like the bush) (22%)

🟩🟩🟩🟩🟩🟩 🌉 A high-tech startup in Silicon Valley (46%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🧑🏽‍🤝‍🧑🏼 An area of great need/distress where I can help out (6%)

🟨⬜️⬜️⬜️⬜️⬜️ 🏙️ Close to banking and trade such as Singapore or Hong Kong (12%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🧉 A tropical Island sipping margaritas honing my influencer skills (4%)

🟨⬜️⬜️⬜️⬜️⬜️ 💼 Just wanna get on with work. (10%)

Your 2 cents…

Alana selected 🧑🏽‍🤝‍🧑🏼 An area of great need/distress where I can help out and wrote

“Once you get a paid job, depending on the field, there is very little opportunity to be of aid in areas of need/distress. I think this experience would provide a great perspective regardless of future work goals and the understanding as to what it means to roll up your sleeves, to work hard. We take so much for granted unless we’re exposed to the harsh reality that some live in and the added benefit is gratitude is said to go a long way towards preventing burnout.”

Thanks, Alana, what a fresh perspective — we can all do with a little more doing good sometimes. Wish someone told our 20-something selves that…