Sanergy: Tackling Sanitation in Kenyan Slums

by Jennifer Walske and Laura D. Tyson
15 Jul 2016

This case centers on Sanergy, a five-plus-year-old hybrid organization, that has become a high profile, high growth, social enterprise, known initially for its Fresh Life toilets deployed in the Mukuru and Mathare slums of Nairobi, Kenya. Sanergy's co-founders launched their social startup out of the 2011 MIT 100K business plan challenge and quickly received national attention in the press. By 2013, the firm had raised a 'Series A' equity round from Acumen, Eleos Investment Management (Eleos) and Novastar, the team had also begun its operations in Kenya to more rapidly build-out both sides of its business: (1) in its non-profit business, deploying Fresh Life Toilets to improving access to hygienic sanitation in Nairobi's informal settlements sanitation business, largely using a franchisee model; and (2) in its for-profit fertilizer business, with its Evergrow Organic Fertilizer, produced by Farm Star, sold to small- and medium-sized farmers in need of rich soil supplements. This case examines both Sanergy's hybrid business model and 'sustainable sanitation value chain in detail and explores the challenges the social enterprise entity will face as it continues to scale up both businesses and seeks to reach the breakeven point by 2018.

Learning Objectives

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The purpose of the Sanergy case is two-fold: (1) to analyze the hybrid business model of an emerging social enterprise entity--with both a non-profit business and a for-profit business --and (2) to examine how its 'sustainable sanitation value chain' helps provide a sanitation solution in the slums of Nairobi as well as fertilizer-based enterprise that can benefit Kenya's large agricultural industry. Under the leadership of David Auerbach, Lindsay Stradley and Ani Vallabhaneni, this case also illustrates how Sanergy first began as a concept when its three co-founders were MBA students, how it then attracted worldwide attention by winning the 2011 MIT 100K Business Plan competition, and how it later secured the financial support of several blue-chip social enterprise investment firms, whose financial and operating support were critical in helping the company execute is business model, scale-up and become a Kenya-based entity.

Details

Pub Date: Jun 30, 2016

Discipline: Social Enterprise

Subjects: Hybrid structure, Social entrepreneurship, Vertical integration, Corporate social responsibility, Business models, Sustainability

Product #: B5871-PDF-ENG

Industry: Water, sewage & other systems

Geography: Kenya

Length: 23 page(s)