TooMuchWifi, a South African internet service provider, has received $1 million (about R16 million) funding in a pre-series A investment round led by fintech investor BLOC Smart Africa Fund.
It received additional capital from other investors Connectivity Capital, Atreyu Investments and European Family Office.
According to Cape Town-based TooMuchWifi, the proceeds of the funding will go toward scaling operations to increase its presence in existing markets and expand into new communities.
TooMuchWifi works to bridge the connectivity gap in SA by bringing fast, uncapped and affordable fibre-backed internet to underserved, densely-populated areas, like townships.
Founded by Ian Thomson and Jonathan Endersby in 2016, the company says it has established basic internet infrastructure in more than 35 underserved local communities, with over 120 000 customers.
“To date, TooMuchWifi has saved Capetonians living in townships over R700 million in data costs. We have trained and employed more than 245 previously-unemployed young people from the township communities we serve,” notes TooMuchWifi CEO Thomson.
“We believe that one of the steps we can take towards a more equitable future is to ensure all South Africans have access to fast internet for school, work and entertainment.”
The Competition Commission (CompCom) data services market inquiry in December 2019 found the cost of data in SA was considerably higher than in many other countries.
The CompCom recommended that telcos reduce data costs and instructed the leading operators − MTN and Vodacom − to cut their mobile data pricing by half.
While this led to the mobile network operators heeding data price reduction calls, data prices in SA are still considerably higher than counterparts in emerging markets.
According to TooMuchWifi, on average, people living in SA’s townships pay up to R200 per gigabyte of data, depending on the data bundles they buy.
The company says it has worked to bring down the cost per gigabyte to under R4, through the services it provides – this is up to 20 times the value of mobile network operator data.
The company says it is able to provide affordable data due to its business model.
TooMuchWifi, which owns its infrastructure, says it is able to run its backhaul network to data centres − these are transit centres that then connect to other data centres locally or internationally via undersea cables.
“TooMuchWifi has proved to be a real challenger among the internet service providers in Africa,” comments Lacina Koné, CEO/DG of Smart Africa Secretariat.
“Their commitment to lower the cost of data and empower the underserved communities by giving them access to affordable internet, and training previously unemployed young people, is in line with our vision and objective at Smart Africa. We are pleased to contribute to the growth of TooMuchWifi through the BLOC Smart Africa Fund.”
The BLOC Smart Africa Fund is a finance technology impact fund, with a fundraising target of €100 million, created and managed by Bamboo Capital Partners, a specialist impact investor in emerging and frontier markets.
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