Antoine Saab and Nadia Moussouni are the entrepreneurs behind Energy24, a power storage solution which they claim is suited to solving the most challenging electricity supply problems. Since being recognized as a Top 20 entrepreneurial company by Executive in 2014, their company Sharp Minds has added a solar energy component to its electricity storage product.
E What has happened at Sharp Minds since we met in October 2014 to discuss the Energy24 project for the Executive Top 20 Entrepreneurs?
Antoine Saab (AS): First, 2015 was a year of stabilizing a version of one of our products. We reached a point where we technically finalized this V1 and moved to another product, version two, in a process of continuous development.
Nadia Moussouni (NM): We perfected V1 and have included all the controls that will help people avoid doing stupid things with it; it is almost unbreakable.
AS: The second issue on which we worked in 2015 was funding on both the equity and the debt side. We reached a deal with CreditBank under which our customers can finance their Energy24 units and made an agreement on our credit lines with the same bank. Also on the debt side, we signed a deal with Kafalat to obtain the highest possible financing amount available under the Kafalat Plus program. On the equity side, we closed our first round of funding through Leap Ventures. The year was basically fundraising.
NM: We finished 2015 with enough funding to look forward to further acceleration and started recruiting. Compared to being only two to three people at the end of 2014, we have since increased to almost 15 and we will be about 50 people by the end of this year.
E How far has the solar component developed in 2015?
AS: Our portfolio is now almost 50-50 between solar and storage. Half of our customers have storage units only, the other half have batteries plus solar. Since we offer hybrid solar, the half [of our customer base] that has hybrid solar is injecting enough power into the grid to compensate for what the other half is using. If you want, our customer base is grid-neutral in this way.
E How much has your customer base expanded?
AS: We had a growth rate of about 300 percent year over year between the end of 2014 and the end of 2015, and we think that we might reach about 400 percent this year.
NM: We currently don’t have any salespeople and are only selling thanks to our reputation.
E But you told me that this is going to change soon.
AS: We are now building our sales force. We have rented a 700sqm office in Sin el-Fil where we will soon be moving. Besides the 15 people that make up our current team, we have just hired five to six people who will join us to build our sales force, starting April 1. Today I signed a lease for our first outlet in Sidon which will be operational on June 1. By the end of 2016 we expect to have two outlets toward the south, in Khalde and Sidon, and one in the Bekaa, plus our outlet in Sin el-Fil. In 2017, we will hopefully tackle Keserwan and North Lebanon.
E What was your experience in raising funds?
AS: I first have to say that I think that Banque Du Liban (BDL), Lebanon’s central bank, has done a great job. I have looked at how many countries handle startups and I think [BDL Governor] Riad Salameh has really done amazing business. [Circular 331] is a bold move and an approach that many other countries should follow.
NM: In administrative terms, the system in Lebanon is a bit tedious and quite complicated. It took us a year to finish the paperwork. But overall we are very happy with the deal we have made. It gives us a completely new perspective and opens up prospects for reaching much larger numbers much faster. We think we will be able to develop products and are already developing products that can go global. This would have been just an impossible dream without the investment into our equity.
E This was the investment by Lebanese venture capital firm Leap Ventures?
AS: Yes. It is a relatively small investment but as you know, as a startup you should neither over-raise nor under-raise funds. We got offered lower funding, which we didn’t accept and got offered higher investments, which we did not take; we took exactly the funding that we viewed as adequate. We expect Leap to announce the size of the investment soon and want to leave it up to them to do so.
E Are you already strategizing for the medium-term future?
AS: Absolutely. From the growth that we are seeing and the way we are looking at the market and how it is developing, we think that this company has a good chance of becoming a very large business. By the seventh year we will probably have had a couple of fundraising rounds, perhaps three. Pessimistically speaking, we believe that the company will be a $300 million business [at year seven]. At that level we don’t see a problem replacing the funding [guaranteed under Circular 331] 331 with traditional investors.