Off Grid Electric: Strategic Financing For Growth

Off Grid Electric: Strategic Financing For Growth

By
Russell Siegelman, Emily McAteer
2015|Case No.E556| Length 45 pgs.

The Off Grid Electric case focuses on the creation, growth, and financing of the company from 2011 through the middle of 2014.  The three cofounders saw an opportunity to provide solar electricity to much of Africa through their solar-as-a-service solution, which they launched in Tanzania in 2012.  The Off Grid Electric business model was very capital intensive, and the new venture had several risks from the perspective of investors: market, business model, human resources, technology, and exit.  As such, CEO Xavier Helgesen needed to think strategically about how—and when—to raise money in order to grow the business.  In addition, the executive team needed to be in agreement on the company’s growth plan.  Should Off Grid Electric focus on rapid growth?  Should they emphasize generating cash?  What would these choices imply for Off Grid Electric’s financing needs?

At the end of the case, Helgesen receives two term sheets for a potential Series D financing.  One is from Zouk Capital, a financial investor, and another is from Solar City, a strategic investor who had previously invested in Off Grid Electric.  Students are asked to evaluate the term sheets from Helgesen’s perspective, as well as to analyze an investment in Off Grid Electric from the perspective of an investor.

Learning Objective

The primary learning objective of the case is to evaluate Off Grid Electric’s financings. Should management have done anything differently in raising its Series A, B, or C financing rounds? How should the company be valued by investors? How should management evaluate various investors, and how should investors evaluate Off Grid Electric? And how should Off Grid Electric management think about future financing needs?

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