Business development for Wifinity : A clean energy startup

Abstract

Wifinity provides solutions in Energy Management, Manufacturing Execution Automation, Security solutions and Smart grid solutions. The focus of this project is to study the Energy Management industry in India and suggest strategic directions to Wifinity based on their strengths and current market positioning. Energy management industry is witnessing a 35% YoY growth in India with the global market estimated at US$170 bn per year at a 17% annual rate of return. It has been estimated that energy efficiency can result in energy savings of about 75.36 bn units or 15% of the total energy consumption in India with aggregate investment potential of US$9.8 bn. The concentration of the market is in the hands of few established players. The energy efficiency companies classified as vendor driven, commanded 53% of the market share by revenues in 2007. The primary purpose of this study is to augment the business development plans of the management. Our market sizing and segmentation would be used by Wifinity to target lucrative sectors and approach appropriate agencies in the energy management space. We recommend the company to target Lighting (US$1 bn market), ferrous metals (where the potential for improvement in power expenses as a percentage of total expense for inefficient firms is around 45%), food and beverages (potential for improvement – 39%), Textile (potential for improvement – 38%) and cement (potential for improvement – 37%) sectors. For each of these sectors we have provided a list of all the players with their financials and contact info. Specifically, we have cited players in Karnataka (their catchment area) in the report. Further, there are various national and international agencies which fund energy efficiency projects in India. GEF is currently funding US$129 mm of projects. We recommend the management to target these funded projects and get a share of the pie. International and national agencies such as the European Bank for Reconstruction and Development (EBRD), the World Bank, IFC, BEE, IREDA, EES offer financing for energy efficiency projects in India. We suggest the management to develop a partnership driven business model, where these agencies would provide third party funding (TPF). It would be far easier to sell to the client if Wifinity can claim that it has a secured line of funding. We have also drawn and long term business development vision for the company based on our understanding of this industry. We believe that the company should immediately start focusing on energy auditing sector as well. Wifinity would operate as a Monitoring and Verification (MnV) agency. They would be third party auditors for agencies which are implementing govt. funded projects. Through this, Wifinity would become an Integrated ESCO, offering both products as well as auditing services.