Saturday 4 of February, 2023
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Egypt-Based Platform Pylon Reshapes Utilities for Developing Nations

Pylon is looking to keep the conversation on sustainability going by ramping up support for water and energy utility companies in Egypt and other emerging markets.

Cairo Scene

After the world flew to Egypt for the COP27 UN Climate Change Conference in Sharm El Sheikh, Pylon - an infrastructure management platform - is looking to keep the conversation on sustainability going by ramping up support for water and energy utility companies in Egypt and other emerging markets.

Launched in 2017, Pylon uses data and AI to provide tailored solutions for utility companies to improve revenue collection by up to 40%, while also increasing operational efficiencies and reducing carbon emissions.

A commercial director turned entrepreneur, Ahmed Ashour got his lightbulb moment while working at a leading metering company in Egypt. Seeing a gap in the market for solutions tailored to water and electricity distributors in emerging markets, such as electricity theft, missed payments, and technical losses due to poor maintenance and faulty equipment, Ashour decided to partner with his lifelong friend, Omar Mohamed Radi, to start his new venture.

“I wanted to start a new project and I knew that, at the time, Omar was starting a tech related company, and his brilliance when it comes to technology and coding was apparent,” Ashour, CEO and Co-Founder of Pylon, tells StartupScene. “So, one thing led to another, and then we started Pylon.”

As a young startup, Pylon quickly became profitable, growing by 3.5x in 2021. It now operates in Egypt and the Philippines, and is already eyeing expansion in Latin America, South East Asia and Africa. However, its road to success was far from a smooth ride at its outset.

TOUGHENING IT OUT

Unlike most startups, Pylon didn’t raise investments during its first few years of operation. Instead, both co-founders poured money into the business, keeping it running through bootstrapping until it eventually became profitable.

“We learned a lot from the experience,” Ashour says. “It made us realise that we shouldn’t adopt the mentality of burning cash for growth. Even though we were ridiculed at the time, and told that if you are not burning cash then you are not a startup, we knew how important it is to be able to have a profitable unit of economics at the end.”

While many other startups struggle to raise funds in the current economic climate, Pylon’s ability to demonstrate sustainable profitability, and prove a product market fit, allowed it to attract investors and raise a $19 million Seed round in early 2022.

BLUEPRINT FOR EFFICIENCY

But it would take more than just funding to get Pylon off the ground. The startup needed customers, particularly utility companies and governments in emerging markets.

“One of our major challenges is that there is a long sales cycle in the process,” Ashour says. “So, it takes us a long time to land a project.”

At times, Pylon struggles with having the right support from customers. As a company that gathers and analyses data from distribution grids to detect where theft and losses occur in the supply process, it needs to work with B2B or B2G entities who are committed to stopping the bleeding of valuable resources, and ultimately optimise their operational efficiencies.

“Distribution companies lose about 40% of their revenues due to inefficiencies,” Ashour says. “So, we look to operate in countries where there is serious interest in reducing losses and becoming more efficient. If you are working in a country where there is no support, it’s usually not a market that we would like to pursue.”

Despite the challenges, Pylon found the way to get customers onboard. “We bring in different financial institutions who would go and fund projects from the beginning,” Ashour explains. “These institutions then help the utility companies understand why they should be interested in our services, especially since the massive losses from their inefficiencies often cause them to be strapped for cash.”

CASE FOR SUSTAINABILITY

While the startup is committed to increasing operational efficiencies and revenues for its customers, it is also taking sustainability seriously. Through its smart electricity grids, Pylon hopes to reduce carbon emissions by up to 25%. 

“Our long-term aim is to reduce the emissions of the world by 1 gigaton, making Pylon the first gigacorn in history,” Ashour says. “We aim to achieve that by 2035. So, that’s the race that we’re in.”

To put that in perspective, electricity grids contribute more than 40% of the world’s carbon emissions, according to a 2021 report by the International Energy Agency (IAE). 

Meanwhile, according to the World Bank, water losses in emerging markets can reach over 45 million cubic metres per day. However, Pylon hopes to change that by reducing water loss by up to 22%, potentially providing enough water to serve over 40 million people. 

“If we are not able to reduce our CO2 emissions, our children, not even our grandchildren, but the very next generation won’t live the life that we are currently living,” Ashour warns. “We need to work on it today so that they won’t come to us in 20 or 30 years and tell us that they’re paying the price for the things we did not do.”