Jibu: Go with the Flow

This blog is co-authored with Jibu's Anne Welsch

Robert  Fenwick-Smith of Aravaipa Ventures (see our recent feature) knew that Jim was interested in deepening his involvement with social ventures in Africa. So, Robert introduced Jim to Randy Welsch, a founder of Jibu. Jibu provides a turnkey franchise model and financing that enables local entrepreneurs to provide affordable, safe, and great-tasting water to their communities. Jim became one of the first investors in Jibu, and his leadership catalyzed investment from many others. Jibu continues to benefit by having Jim as part of its team.

Jibu Origins

Randy and Galen Welsch are the father-son team who co-founded Jibu (Jibu is a Swahili word meaning “the solution”). While working in Africa and seeing many water projects fail, the Welschs had become firmly convinced that local business ownership was necessary to solve critical problems. Driven by their confidence in aspiring entrepreneurs, Randy and Galen developed a franchise model in which franchise owners are inter-dependent peer business partners who have direct ownership and control over their successes and failures.

Jibu Corporate raises capital through investments, low interest debt and grants. Deploying the capital raised, Jibu provides local entrepreneurs with water filtration equipment, financing, in-store supplies, a common brand, and training to start a business treating and selling water. Each franchisee pays a start-up fee, as well as a per-liter- sold fee, to Jibu Corporate once the franchise reaches profitability through volume of water sold. As long as water is sold at the projected minimum threshold level, franchisees are generally cash flow positive in about 3 months, with Jibu Corporate expecting to be cash flow positive in roughly 3 years.

Jibu operates as a Low-profit Limited Liability Company (“L3C”). An L3C is a for-profit business which has the dual goals of making money and making impact. Required by law to align charitable impact with profit-making, Jibu’s L3C charter mandates “a business in which profit, although of subordinate importance to our primary charitable purpose, is a key enabler of our ultimate mission to provide self-propagating solutions for those who most need it.” Capital accumulation is facilitated for an L3C by a flexible equity structure that provides investment “tranches” to allow separate levels of risk and return for different classes of ownership.


Nairobi Pilot

The Jibu model is neighborhood based, avoids middleman markups, and re-uses bottles. Consequently, Jibu is able to keep prices low for consumers; the price for each liter is comparable to the cost of boiling water at home. Jibu is currently reaching the urban poor in Kampala and Kigali and it is now testing its model in an even higher-density and more impoverished community in Nairobi, Kenya.

The Nairobi project, located in the Embakasi slum area, is applying Jibu’s model in a market where the standard of living is very low, in an environment where the soil is laced with sewage, and in a community where the infrastructure of fragmented and cracked water pipes is subject to contamination. As a result, the community water sources are completely unsafe to drink. Josephine, Jibu’s Nairobi Pilot Manager, identifies lack of clean water as “the biggest problem in her community,” alongside lack of employment, property, and capital.

In Josephine’s words (pictured far right), “Jibu is the solution to the water crisis in our community.” 

In Josephine’s words (pictured far right), “Jibu is the solution to the water crisis in our community.” 

The Nairobi pilot is off to a great start, recording initial sales of 1,600 liters of water in one day. Josephine’s team, including her community outreach coordinator, has reached 50 schools and continues to expand awareness about and access to safe water. The pilot is primarily selling large, 20-Liter bottles, which many first-time customers have already brought back for refills, thereby meeting Jibu’s goal of establishing itself as a consistent source of cheap, safe water.

 

On the Horizon

In the long-term, Jibu plans not only to open new water franchises in Africa and beyond, but also to leverage its water distribution system to provide other essential, health-improving products, such as telemedicine and low-carbon-footprint stoves. (Telemedicine combines communication and information technologies to deliver clinical health care at a distance.) Jibu’s ultimate goal is to establish a network of social entrepreneurs who can revolutionize the African market and pave the way for deployment of developed world resources more effectively in emerging markets.

By 2020, Jibu’s impact goals include:

  • 1 million people with reliable access to safe drinking water

  • 360 million liters of water sold

  • 50% reduction of water- borne disease among customers

  • 52 million kg of charcoal and 260 tons of C02 saved

  • 1,000+ locally-owned, mission-oriented businesses

  • 8,000+ quality jobs

  • Attractive ROI and organic profitability

  • Dramatically improved quality of life in Jibu neighborhoods.

How You Can Get Involved

Jibu has four initiatives that you can help. One is a Rent Deposit Loan Fund, a program of short-term investment to assist franchisees in securing retail space. The other three initiatives provide grants administered through Overflow, Jibu’s partner §jubu501c3 charity. The grant options include a Water Club voucher program for the neediest members of the community, a Solar Power initiative to install solar systems in stores, and a Launch program to assist franchisees in building-out their store space. To get involved, click here.