Why we partnered with Kubik
Kubik has raised $3.34M to turn hard-to-recycle plastic waste into affordable interlocking building materials including bricks, columns, beams and jambs.
I decided to write a blog on our journey with Kubik Inc. to give a glimpse into why we invested and take you through our thought process!
Read on!
How it started?
Addis Alemayehou, general partner at Kazana fund was in touch with co-founder Kidus Asfaw (CEO) in Nairobi for quite some time. And during our outbound scouting activities, we had Kubik as one of the top startups in the region in our list for climate-tech. After we connected with the team and completed our in-depth assessment on Kubik and evaluated how we (Kazana Fund) can add value to the team leveraging our network and experience, we were convinced in wanting to partner with them and immediately started the process to mobilize and engage our Kazana Angels community.
The problems that Kubik is tackling
1. The affordable housing problem
With the high level of urbanization happening globally, cities are becoming unaffordable to many. There is 200M+ deficit of housing units globally that are considered affordable to the poor and this number is expected to reach 300M by 3030. This is a total $2T+ market.
In Ethiopia alone, there is an unmet housing demand estimated at approximately 1.2M with 381,000 new housing units needed annually, while only 165,000 units are produced nationwide annually. The market opportunity is $38B in Ethiopia and $748B in Africa.
2. The Climate Problem
Globally, 350M metric tons of plastic waste is produced per year. In Africa, 19M tonnes of plastic is generated and only 4% of waste recycled.
What else?
There is a huge CO2 emitter we’re all overlooking …. It’s cement.
Second to water cement is the most used material in the world today and is also used to make concrete blocks. In fact, cement is a thirsty behemoth that consumes 10% of the worlds industrial water used.
Over 4.1B tonnes of cement is produced annually in turn producing 3.6B tonnes of CO2 emissions. This accounts to cement generating 8% of global CO2 emissions this is more than emissions from aviation (1.9%), oil and natural gas (3.9%), Coal (1.9%), chemical and petrochemical (3.6%).
Kubik’s solution
Kubik produces bricks, columns and beams using hard to recycle plastic waste that are 40% cheaper, faster and has 5X less CO2 emissions. Furthermore, 66kgs of plastic are recycled per sqm with Kubik. They build and operate factories in-country in order to reduce local waste, generate employment, and make market-relevant products. Kubik materials are designed to interlock and avoid the need for additional substances like cement. They work closely with real estate developers to design the buildings they need, and produce the required materials to make a complete ground-level building unit, or partitions for a multi-level building. Product has been tested and has provided structural, chemical and flammability analysis report that indicate that the product is marketable. And they can build up to 10,000 affordable homes per year!
The Team
Founders Kidus Asfaw (CEO) and Penda Marre (CPO) met at UNICEF and have had the opportunity to validate and test the product with affordable housing projects. This was a major green flag for us in evaluating the team and their ability to work together. We also love a gender balanced leadership team 🙌🏾
Kidus is an Engineer and development practitioner that’s led product deployments in over 40 countries across Africa, Asia and LATAM during his time at Google, Accenture, World Bank and UNICEF. He holds MPA from Princeton University and BSE in Biomedical and Electrical Engineering from Duke University.
Penda is a seasoned entrepreneur within the manufacturing and construction sectors with over 20 years of experience running plastic transformation factories. She has a B.T.S in Accounting management.
They have now grown the Kubik family across Ethiopia and Kenya.
Kazana’s thesis
🚀 There is 2–3x price increase in building materials cost in 2022 and there is currently a 5.5 Mt deficit of cement in Ethiopia, making affordable housing materials a huge need in the market. And with urbanization rate expected to reach 70% globally by 2050, affordable housing is a growing market that is needed everywhere. Kubik has made it’s products significantly cheaper to help drive down cost.
🏗 With Africa currently recycling only 4% of waste, by salvaging 45,000 kg of plastic waste everyday from land fills, Kubik will positively contribute to our climate with it’s circular economy model. Furthermore, Kubik’s positive impact on the climate can be extended to it’s product being 5X less polluting than building materials currently in the market.
🟢 There are other players in the market, however the competitive advantage for Kubik comes from their business model, focus on scalability, and the incredible team!
What’s next
We’re super excited about Kubik’s transformative business that works on making housing affordable to Africans! Kubik plans to enter other countries in Africa and scale production capacity at its plant in Ethiopia to build close to a quarter million square meters of wall surface area every year. By bringing down material cost to build through it’s product, we believe that Kubik can make affordable housing available for Africans!
TL;DR that’s why we’re #buildingwithkubik 🚀 and cheers to our Angels that invested with us!
If you’re an affordable housing real estate developer looking for an easy-to-use, cheaper and environmentally friendly building material, you can reach out to the Kubik team directly here: hello@buildkubik.com
If you’re an early stage founder working on improving the way African’s live, work and play, we would love to meet/ jump on a call to chat. You can find me on Linkedin or pitch the wider team here.
Alternatively, if you’re looking to start investing in brilliant African founders as an Angel with small checks alongside Kazana, let us know here!
To learn more about Kazana Fund, click here or follow us on LinkedIn, Twitter, Instagram and here on Medium
