Why we invested: Shyft Power Solutions

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As in many fast-growing economies, cities in Nigeria, a country set to become the third most populous in the world, suffer from frequent power outages, hindering both personal and economic productivity. Unreliable electricity grids necessitate the use of highly polluting diesel backup generators. And as homes and businesses begin to integrate solar and batteries, they will create more complex hybrid power systems that can be challenging to operate. ADAP recently invested in Shyft Power Solutions, which has developed an Internet of things (IoT) energy management system that permits intelligent management of distributed energy resources, optimizing for cost, reliability and reduced emissions.

Shyft founders Ugwem Eneyo and Cole Stites-Clayton participated in the ADAP Deal Room at the SOCAP Conference in San Francisco in October 2018, and Shyft was one of two companies to receive investment from ADAP from that Deal Room. Shyft is the sixth deal for ADAP’s Seed Fund 2, investment number 17 in ADAP’s total portfolio.

"We appreciate working with an investor who understands the pivotal role that we believe that Shyft can play in the wider energy sector,” says Eneyo. “Being a part of ADAP's deal room gave us good insight into their direct and collaborative approach, which we have continued to experience through their ADAP Advisory work."

Here are four key things about Shyft that ADAP is most excited about:

1) As early-stage investors, evaluating company founders is a critical part of our diligence process. During our many conversations during the ADAP Deal Room, we were very impressed by both Ugwem and Cole as entrepreneurs. They bring a broad and complementary set of skills with the necessarily technical backgrounds, as well as a deep passion for the work they are doing, and in Ugwem’s case close family connections to Nigeria. Just as importantly, Ugwem and Cole actively seek to build their network of advisors and further develop their skills as company leaders. During our due diligence process, we felt that we could have honest and direct conversations about where the company currently was, as well as its strategic direction going forward. This has continued through ADAP’s advisory support, which is a key element of the ADAP model; we continue to be impressed by them as individuals and as a team.

2) We like the elegant technology solution that Shyft has developed, a patent-pending IoT and software solution that does for the transfer switch what Nest did for the thermostat, driving energy efficiency and enabling intelligent energy management. It is a simple, smart and much-needed solution with massive scalability.

3) Shyft has developed strong partnerships, which is critical for any early-stage company. Partnering with large organizations, including one of the market leaders in backup power solutions that operates across Africa and the Middle East, gives Shyft additional legitimacy in the Nigerian market. It also serves as a good testament to the ability of the founders to build and maintain those partnerships, and speaks to their abilities as entrepreneurs to have negotiated favorable partnerships at such an early stage of their business.

4) Last but certainly not least, ADAP is excited about the potential for Shyft Power Solutions to have a truly transformational impact on the energy sector in Africa. As more and more Shyft systems are deployed, network effects have the potential to multiply the company’s impact on the power sector in Nigeria and beyond, and help accelerate the integration of solar and other clean power sources. We see Shyft as being able to have both a direct as well as a catalytic impact on the wider energy sector.