Isizwe, an internet service provider that provides online access to low-income communities in South Africa, has raised $ 460,000 in funding from the Global Innovation Fund (GIF) to reduce the risks of its model and encourage new investments.
Launched under the name Project Isizwe in 2013, Isizwe offers unlimited Wi-Fi in townships and informal settlements on a pay-as-you-go basis at low cost. Users pay ZAR 5 ($ 0.33) for 24 hours of internet access compared to the South African average cost of ZAR 100 ($ 6.63) per gigabyte.
To provide the service, Isizwe creates Wi-Fi zones with Wi-Fi hardware that connects to Internet Service Providers (ISPs). This allows the startup to provide internet access in low income locations without having to invest in building expensive backhaul infrastructure. The result is Wi-Fi zones within walking distance of each home, with one Wi-Fi zone covering around 100 homes.
Since adopting this approach in 2020, Isizwe has set up 80 Wi-Fi zones, including zones for an education group working to facilitate distance learning during the COVID-19 pandemic, and plans the deployment of more than 25,000 Wi-Fi zones in South Africa by 2022.
Public provision of WiFi as a viable and scalable business model serving customers at the bottom of the pyramid remains to be proven, but the UK-based venture capital firm’s US $ 460,000 investment GIF at this early stage, this will help reduce the risks of the Isizwe model and potentially catalyze commercial capital in subsequent investment rounds to allow the company to test the basic assumptions regarding operational, social and financial viability. .
The investment is being made through ADVANCE, GIF’s partnership with Anglo American that aims to unlock the private sector investments needed to scale up new business models for the United Nations Sustainable Development Goals.
“This is a great investment for Isizwe and it shows us that the world really cares about connectivity in Africa. Over 90 percent of households in Africa have only mobile data to connect to the internet – it’s done on a per-gigabyte billing basis, so it’s incredibly expensive to get connected. The cost is similar to the cost of a bath in bottled water. Governments in developed countries understand the dangers of a digital divide and are making significant investments to connect their rural communities. Connectivity is the new key to unlocking the poverty trap, so it’s great to see GIF and Anglo American apply it to Africa, ”said Tim Genders, CEO of Isizwe.
“We have seen the benefits of last mile connectivity in India, Latin America and parts of Africa, and we aim to show that our investment can provide sustainable internet access to those who live in rural areas and suburban South Africa, while generating both large-scale social benefits for users and attractive financial returns for investors, ”said Khuram Hussain, GIF’s chief investment officer.