It’s Tuesday, and today we’re discussing Koolboks, a French-based company serving sub-Saharan Africa’s refrigeration market. Founded by Ayoola Dominic and Deborah Gael, the company recently announced an $11 million Series A round co-led by KawiSafi Ventures, Aruwa Capital, and All On, with additional support from FFEM and bpifrance through debt financing.

We often underestimate the far-reaching consequences of fundamental issues faced by developing countries. Poverty and electricity access are two of the most critical, and they usually go hand in hand.

Take Nigeria as an example. 54% of the population live below the poverty line, and only 61% have access to electricity. Poverty means people may struggle to feed themselves, and without electricity they can’t turn on the lights, let alone cook food properly.

But the first-order effects extend much further.

One example we’ll look at today is refrigeration. I’ll focus on Nigeria here, but the same holds true across most of the region. I’ll also limit the discussion to businesses. Not having a fridge at home is bad enough, but for businesses the consequences are far greater and ripple through the economy.

The lack of refrigeration capacity in Nigeria is severe. Only 23.3% of households own a refrigerator. While similar data for businesses isn’t available, given that 62% of local businesses earn less than $200 in revenue per month, it’s safe to assume the situation isn’t much better there.

So what does this mean for businesses? The consequences are plenty, both direct and indirect:

To sum up: without reliable refrigeration, Nigeria loses food (worsening hunger and malnutrition), businesses lose money (limiting their ability to grow or even survive), and people lose lives.

A grim picture, to put it lightly.

Koolboks originally started as a smart cooler provider serving the European market. However, during the pandemic the company saw an opportunity to completely pivot.

Today, Koolboks provides solar-powered refrigerators that can deliver uninterrupted cooling for four days straight.

Three things stand out about the product, each dictated by the specific needs of the local market.

The most obvious differentiator is that Koolboks products are powered by the sun. But it goes beyond that.

Instead of relying solely on conventional lithium batteries, Koolboks refrigerators store energy in the form of ice. During the day, solar power is used to create ice while also cooling the unit. At night or on cloudy days, the stored energy in the ice keeps products cool. This system is ideal for customers who only need cooling, such as dairy farmers, beverage vendors, or produce sellers.

For customers who need to freeze products and maintain the integrity of frozen foods like fish, Koolboks offers a solution that combines the ice battery technology with lithium batteries. This ensures continuous refrigeration that meets more demanding cold chain requirements.

Many products that try to combine two functions into one end up failing. Fridges with TVs are a classic example.

Koolboks also combines functions, but in a way that actually makes sense.

Its refrigerators are equipped with four light bulbs and four USB ports. So whether or not you have electricity, whether or not you have a generator, for a limited time you can use Koolboks as a combined light source, charging station, and refrigeration unit. Outside of outages, it also saves on energy bills, since the refrigerator runs on free solar power.

The company puts a strong emphasis on customer service, which shows through both education and after-sales support.

For many buyers this is the first refrigeration product they have ever owned, so they may face challenges understanding energy storage, charging, and other principles behind the product. Anticipating this, Koolboks ~invested~in customer education through detailed product manuals and training sessions, which include a one-hour call with a company specialist to explain how to charge the product, load the freezer, make payments, and troubleshoot basic issues. If a customer faces a problem they cannot resolve themselves, Koolboks offers support that responds within 24 hours.

Having fridges equipped with IoT devices allows the company to track performance and detect issues as they arise. When problems occur, the company can step in and resolve them quickly.

The company already operates in 26 countries with a range of products, from household refrigerators to large commercial freezers.

And the feedback so far has been encouraging. Koolboks won a GSMA grant for a pilot project, and at the end of that program GSMA reported that 9 in 10 customers saw an improvement in quality of life thanks to having a freezer, 85% reported higher income, and 87% reported less waste.

While the monetization part is probably the most interesting aspect of the model, before getting to that I want to mention a couple of other points.

The company started with the B2B market before shifting to B2C, which is not something you see very often. Typically, companies go to distributors who already have the supply chain in place and the scale to reach customers. In Koolboks’ case, the company itself noted struggling with customer acquisition and building a strong sales pipeline.

That said, partnerships remain an important part of their strategy. One example is their collaboration with mini-grid developers. Such partnerships help developers increase network utilization, while giving Koolboks greater reach. Another example is the work with Orange Energies, which enabled Koolboks to expand into 12 countries.

Two other details are worth highlighting. The first is that while Koolboks initially manufactured in China, the company is now moving production to Nigeria, which should reduce costs by about 40%. The second is that around 70% of revenue comes from off-grid locations. That makes sense given the need, but it’s also fascinating that the most underserved areas are adopting one of the most tech-forward solutions.

Koolboks operates through a pay-as-you-go (PAYG) lease-to-own model. Customers pay in installments over 3 to 24 months, starting at about $10 per month. Once the full amount is paid, they own the refrigerator outright. Considering that some farming communities spend around $5 per day on diesel or petrol, the value proposition is clear. Payments are made through mobile money or nearby POS agents.

To manage usage and payments, Koolboks equips its products with IoT sensors. These track performance and allow preventive maintenance, while feeding data into the company’s CRM system to monitor both product usage and payment status. When a customer makes a payment, they receive a token code that must be entered into the fridge, which then unlocks continued use.

Because this model makes refrigerators affordable, credit defaults are low at just 3.5%.

The biggest risk is financial, made up of three parts: credit risk, expansion, and local manufacturing. Default rates are currently low, but there’s no guarantee they’ll stay that way. The company is also expanding very quickly. While many markets share similar issues, each still requires some localization, which carries risks when entering new geographies. Finally, moving production from China to Nigeria should reduce costs, but Nigeria doesn’t yet have the same manufacturing expertise. How well production lines are set up, how quickly workers can be hired and trained, and how reliable the supply chain will be are all open questions. Any of these factors could limit the financial upside of shifting manufacturing locally.

The problem Koolboks is solving is enormous and not one that will disappear anytime soon. If manufacturing in Nigeria truly lowers costs, the company could spend more on customer acquisition (increasing inflow) while also making the product more affordable (improving conversion). Refrigerators aren’t items people buy often, which creates a lock-in effect, customers are unlikely to switch to another brand once they’ve made their purchase. That lock-in justifies higher spending on acquisition.

Koolboks is an interesting kind of product. It exists because many people don’t have reliable access to electricity. But solving that problem wouldn’t make the product obsolete, since the business model itself creates a strong defense mechanism. Access to electricity doesn’t automatically make people wealthier, and the ability to buy the product on credit, while avoiding electricity bills by running it almost for free, makes it attractive regardless.