UNTAPPED: a platform to deliver all basic goods to underserved communities

UNTAPPED integrates decentralized water treatment centers with last-mile distribution of consumer goods for fast-growing populations

Photo of Dan Nolan
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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

UNTAPPED

Year founded

2013

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • $1mil - $5mil

Number of beneficiaries impacted so far

  • More than 100,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Water
  • Nutrition

Headquarters location: Country

  • United States of America

Headquarters location: City

San Francisco

Location(s) of impact

Haiti: All regions
Kenya: Northern Regions
Rwanda: Various Regions
Ghana: Various Region

Website

www.untapped-inc.com

Facebook URL

https://www.facebook.com/DloHaiti/

Problem: What problem is this initiative trying to address?

The world’s population is rapidly urbanizing-Africa is expected to add another 1 billion people in the next 30 years. Government-managed, centralized models for water and energy won’t be able to meet this fast-growing demand. At the same time, consumers living in these rapidly urbanizing regions see higher prices and limited product availability because of inefficient supply chains due to poor infrastructure.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

UNTAPPED builds and manages decentralized water treatment centers in rapidly urbanizing regions lacking infrastructure for basic services such as clean water and energy. These centers provide clean water for local communities, and act as efficient hubs for last-mile distribution of essential consumer goods. The result is that clean water and healthy foods such as milk are available through local retailers at ½-¼ of the lowest market prices.

By combining the local logistics and commercial networks for clean water with last-mile consumer product distribution, UNTAPPED makes both more efficient. Our treatment centers transform into business centers that can serve the communities all basic goods: from clean water, to healthy food, to clean energy, to health products. Our mobile IT platform tracks all these sales and inventory, creating an optimized supply-chain model.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

UNTAPPED today serves clean water to over 300,000 consumers in Haiti and is quickly expanding to Africa. The majority of UNTAPPED’s current customers live on less than $2/day and did not previously have affordable access to clean water. It also employs over 80 local staff in areas with over 80% unemployment while helping 527 micro-retailers double to triple their net incomes reselling water and other essential goods.
Because UNTAPPED uses off-grid solar energy, current operations displace 369 metrics tons/year of CO2 emissions, equivalent to taking 79 cars off the streets.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

dloHaiti is already operationally profitable at site level. By 2018 dloHaiti will be a self-sustaining entity, however we will continue to fund-raise and apply for grants for the global expansion of UNTAPPED.
1. 0%
2. 0%
3. 1%
4. 80%
5. 19% - Equity Investment

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

UNTAPPED is the most efficient means to deliver clean water, healthy goods and services to under-served communities.

While most water services business focus on the treatment of water, we focus on the operations through our proprietary mobile IT platform. This way we can adopt any treatment technology and our mobile IT tracks real-time contamination levels for water quality. Our mobile IT also tracks all sales creating a system to deliver all basic goods to the last-mile.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

The founder, Jim Chu, spent his career in tech, but arrived in 2010 as a volunteer in Haiti after the earthquake, working with a clean water NGO. He found that aid was not solving the source of the problem and was often worsening it.
 
In partnership with the IFC, Jim launched dloHaiti to develop a more effective model for deploying and managing water infrastructure serving the underserved communities. By taking a market-based approach and focusing on serving poor consumers, the company could offer them better and less expensive services.
 
In 2017, with impact and unit economics at scale proven, the challenge is to make the systems and tools available to empower other entrepreneurs to achieve scale to reach millions globally.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Upon recommendation from others

Program Design Clarity: We are hungry to know more about what exactly your model consists of. Succinctly list a) what main activities are you doing with your beneficiaries, b) where you carry out the activities? c) how often? d) for how many hours? e) who delivers the services? and f) any other brief details

The primary beneficiary is the consumer in the under-served areas in which we work (currently Haiti, Ghana, Kenya, and Rwanda.) The consumer has daily access to a reliable source of clean water and healthy food products at ½-1/4 of the lowest market prices. The second beneficiaries are the direct employees and retailers in our network. In Haiti we have over 100 employees in areas with 80% unemployment. Our retailers are small corner stores that operate in difficult market conditions; products with low margins that they buy weekly at the central market. We deliver directly to their stores 2-3 times a week with higher-margin products to greatly improve their weekly economic output. In this way the water treatment center creates shared stable economic growth in the entire community they serve.

Focus area

  • Water

We are interested in learning more about your initiative's broad impact on sustainable development. Please reply ONLY to the question(s) related to your above focus area.

The developing world is rapidly urbanizing, outstripping existing infrastructure and the governments’ capacity to keep up. Africa is expected to add another 1 billion people in the next 20 years. Government-managed, centralized water and energy infrastructure fail to reach most of the population now and the problem is only growing. UNTAPPED currently serves over 300,000 consumers with affordable clean water in areas with a lack of basic infrastructure. The first part of our solution is to build a decentralized water treatment center in under-served communities. This is advantageous for several reasons:
1) The source of water comes from the area it serves, instead of being brought by large trucks that pollute the air and can contaminate the water
2) Our water is delivered at an affordable price
3) We hire directly in the communities we work, in communities that have unemployment rates often greater than 80%
4) Our water infrastructure creates an economic system that we leverage to deliver other basic services including healthy food products and clean energy.
By integrating the business models, our system not only provides greater access to clean water but allows us to provide the water as part of a sustainable, thriving economic solution. Our goal is to serve 100 million people clean water by 2030.

Creating shared value: How does your initiative create value for different stakeholders?

Our business model is focused on creating shared value by integrating several businesses models. We start with decentralized clean water infrastructure and distribution to a network of retailers in the area. Demand for clean water is ubiquitous, making clean water a highly-effective anchor product and entry point to retailers. However, water is a low-margin product and is difficult to operate as a stand-alone enterprise, so we leverage our last-mile distribution to create an efficient supply-chain to sell other essential goods. Our mobile IT tracks our operations and sales making it possible to replicate across geographies.

The entire system creates value for various stakeholders. Large CPG companies (Nestle) that want to leverage our last-mile distribution. Financial institutions that want to invest in decentralized infrastructure projects at a larger-scale. In the end, the increased value of the integrated businesses escalates the access to clean water for BOP consumers globally.

How is your initiative funded, now and over the next 5 years?

Our current run-rate is $900k and each site averages more than $100k in annual revenue. The cost-recovery for an entrepreneur on our platform is less than a year, and it only takes 2-3 years to cover the full CAPEX ( approx. $60k depending on country) at each site. Our operation in Haiti already fully covers program costs and will contribute to the cash flow. In the next 3 years we will be looking for a small combination of grants and equity to cover soft costs to integrate further business models (cold-chain, medical supplies) as we ramp-up globally. Most of our fundraising will be for a leasing facility: a tax-equity structure for third parties to finance the decentralized assets.

How do you plan to influence your field of work if you are a winner of this edition of the CSV Prize?

The CSV prize would be instrumental to developing our platform to disperse across Africa and Asia. We are currently working on an IT project for Safe Water Network and Jibu, two Small Water Enterprises already established in Africa, to create tools for greater efficiency and impact. The goal of the IT project is to develop an open-source common data architecture and protocols in the sector. The prize would allow us to develop more IT tools on this data architecture to add more value and scale more rapidly across Sub-Saharan Africa and South East Asia.

How will you leverage an investment from Nestle to expand the impact of your work?

Nestle is a perfect partner for our global strategy of an integrated business platform. The platform allows UNTAPPED to consolidate smaller retailers into a direct distribution channel for global Consumer Packaged Goods (CPG) firms such as Nestle. In Haiti our sales of secondary products (toilet paper, soap, powdered milk, ect.) have already surpassed our sales of clean water. As our platform scales we will have a direct distribution line to the next 100 million consumers.

Spread Strategies: Moving forward, what are the main strategies for scaling impact? What’s the projected impact for the coming years? Are you planning to expand your programme into new locations? On what assumptions do you build your scale-up plans?

UNTAPPED has developed a platform approach boosting efficiency, scale and profitability of individual ventures. The platform integrates best practices from the sector with a mobile IT system to reinforce standardized processes for water production, quality management, sales, distribution, logistics, and customer management.

UNTAPPED was founded in 2013 with the pilot dloHaiti. Since its founding, dloHaiti has built 8 treatment centers, with 527 sales channels and over 300,000 customers. UNTAPPED is the second iteration of the business model, a turnkey platform approach focused on scale across geographies.

The platform is our new approach for 3 reasons: 1. Replication across geographies for quicker scale 2. The need in the sector from current operators 3. local partners are familiar with the local regulatory and business environment and have already built teams in their respective market. We transform their small sites from walk-up kiosks to sustainable distribution centers.

Team: What is the current composition of your team (types of roles, number of full-time vs. part-time staff, board members, etc.)? How will this team evolve as your initiative grows?

We currently have 84 full-time employees with most of the staff working in-country and 527 retailers in our network. Our founder, Jim Chu ran several tech businesses before dedicating his life to development work in 2004. Our team was designed to bring a range of business expertise to our company to successfully create the integrated business model of UNTAPPED. Our corporate team has a background in international development, technology, solar development, water engineering, finance and supply-chain logistics. Our board members are from the IFC, private equity, consumer goods companies, and water utilities, to ensure our model is commercially viable. We are continuing to hire more managers across Africa, and will add more computer programmers to maintain our large IT database.

Awards: What awards or honors has the initiative received?

Imagine H20 cohort 2012
GIIRS Platinum Impact rating 2016 & 2015
MIT Solve winner 2017
End Poverty Social Start-up Business Award 2017
GSBI in-residence accelerator 2018

Organizational leadership: How are you influencing your field of work in the present?

We currently are leading a collaborate project to develop a common IT platform with Safe Water Network and Jibu, with standards for data structures, data exchange protocols and operating systems. The goal is to create an IT ecosystem for all Safe Water Enterprises to increase efficiency, reduce costs and realize greater scale as a whole in the industry.

Should you be successful, please confirm your availability to attend the Ashoka Impact Boot camp and Creating Shared Value Prize Live Pitch Event at the World Water Forum 13-16 March 2018

  • Yes, I am available to attend the events on 13-16 March 2018

2 comments

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Photo of Sharla Halvorson

This looks like fantastic work with some very impressive results.  I especially like the aspects of the business model which integrates micro-retailers so that the water can be taken even closer to the consumers. 
How would (has) this system hold up in the face of natural disaster, especially with the frequent risk for hurricane damage? 
You appear to already be generating a significant percentage of your revenues from sales, how long is the usual payback on a new treatment facility? 
This is a great solution for newly urbanised areas or urban areas with poor or unreliable infrastructure, do you see a way to apply the model to more rural environments?

Photo of Dan Nolan

Sharla,

Thanks for the comment. For your question on natural disaster, our sites are designed for international building codes (IBC) including Komo and Euro Ce certification. Our sites made it through hurricane Irma unscathed, and we would expect them to withstand much stronger natural disasters. The payback on a facility takes up to 2 years for sales to fully realize and cover CAPEX, but the payback for the entrepreneur is in the first year. Our model is really for peri-urban regions; areas that were once rural but now have had an influx of growth, the fastest growing regions in developing countries.

Best,
Dan