Husk Power Systems is a startup company based in Bihar, India, that provides power to thousands of rural Indians using proprietary technology that has been developed by the firm that cost-effectively generates electricity using a biomass gasifier that creates fuel from rice husks, a waste product of the rice hullers that separate the husks as chaff from the rice, a staple food in the region. It is also working in Africa.
It has recently announced its plan to raise $50 million in equity and $60 million in debt in 2021 in order to continue growth at a Compounded Annual Growth Rate (CAGR) of 100%. The company announced its revenue grew 90% growth while commercial business customers quadrupled in 2020. It aims at becoming the first mini-grid company in India to become operationally profitable this year.
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“In the face of a pandemic and a global economic downturn, Husk Power and its customers not only weathered these challenging times but saw record growth that positions the company for an even stronger year ahead,” CEO Manoj Sinha said, adding the firm is forecasting 125% revenue growth in 2021.
In 2019, well before COVID-19 hit, Husk Power had put in place a comprehensive resilience plan to deal with unexpected externalities such as flooding, supply chain disruptions, and adverse government actions. The plan involved identifying secondary sources of revenue, hiring additional staff to cover unexpected events, acquiring distressed projects during the pandemic, and diversifying its supply chain for a variety of components.
The planning paid off. While average revenue per user (ARPU) of the minigrid industry remains low in Africa, at under $5.00 average across all customer categories, including households and small businesses, according to the Africa Minigrid Developers Association (AMDA), Husk Power’s ARPU, by comparison, is more than twice the industry average, Sinha said.
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The company averaged 16% compounded annual growth in ARPU from 2017-2020, while ARPU growth in Q4 2020 was 22% compared to the same quarter in 2019.
Husk Power ended 2020 with more than 5,000 small business customers, 300% growth over 2019, and expects that number to surpass 12,500 over the next 12 months.
Commenting on the financial results, the company’s board chairman, Brad Mattson, stated: “Husk proved in 2020 that it can prosper no matter how negative the business environment. It has already grown its asset base by 10x in just over two years, and is ready to scale another 10x to 1,000 mini-grids. The Board has full confidence in the company’s leadership to secure the next round of funding and become the industry’s first profitable mini-grid company.”
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