Module 04 · Commercial
Revenue Models
Revenue playbooks for green businesses — subscription and PAYG, B2G and donor-funded sales, carbon-linked revenue, and green procurement wins.
Six revenue models that work in African green markets
Most successful ventures blend two: one that pays the bills today and one that scales.
Pay-as-you-go (PAYG)
Asset-heavySolar home systems, clean cooking, water, irrigation
Customers pay in small instalments unlocked by remote lockout technology. Converts unaffordable assets into affordable service, but consumes working capital.
Model receivables and default rates explicitly; lenders price on portfolio quality.
Subscription / service
RecurringMonitoring software, e-mobility swaps, waste collection
Recurring fee for continuous access. Predictable revenue and the easiest story for equity investors.
Churn above 3% monthly destroys unit economics — track cohort retention from month one.
B2G and donor-funded contracts
Large ticketsUtilities, municipalities, ministries, NGO programmes
Tender or framework contracts with government and donor programmes. Ticket sizes are large and repeatable.
Payment cycles of 90–180 days. Bridge with invoice finance, never with payroll.
Carbon-linked revenue
BlendedCookstoves, reforestation, biogas, efficiency
Layer verified credit sales on top of a core product to subsidise customer price.
Treat as margin enhancement, not primary revenue; MRV cost and price volatility are real.
Asset leasing
Capital-intensiveCold chain, e-bikes, agri equipment
Retain ownership and lease productive assets to businesses or cooperatives.
Requires asset-backed debt; keep a clean asset register and maintenance data.
Marketplace / take-rate
Asset-lightRecycling aggregation, green procurement platforms
Commission on transactions between suppliers and buyers. Scales fast without balance-sheet risk.
Thin take-rates need real volume; prove liquidity on both sides before raising on it.
Selling to government and donor programmes
B2G is where the largest African climate budgets sit — and where most startups lose on process, not product.
- 1Register as a supplier on every relevant portal before tenders open — most losses are administrative
- 2Build a compliance pack: tax clearance, company documents, references, insurance, B-BBEE or local-content certificates
- 3Track budget cycles; influence specifications 6–12 months before the tender publishes
- 4Price for late payment: add financing cost into the bid, not into hope
- 5Partner with an established prime contractor for the first large contract
Pricing and the green premium
Willingness-to-pay research
Run split tests at three price points with real transactions, not surveys. Measure conversion, not enthusiasm.
Green premium reality check
Most African consumer segments will not pay a premium for climate benefit alone. Sell savings, reliability or productivity — impact is the by-product.
Affordability engineering
Change the payment shape (daily, weekly, harvest-linked) before you cut the price. Duration beats discount.
Corporate green procurement
Large buyers have scope-3 targets and pay premiums for verified reductions. Package your product with an evidence report.
Revenue quality: what investors score
| Signal | Weak | Strong |
|---|---|---|
| Contract basis | Verbal or MoU | Signed contract with payment terms |
| Repeatability | One-off projects | Recurring or framework agreements |
| Concentration | One customer over 50% | Top customer under 25% |
| Collection | Days sales outstanding over 120 | Under 45 days |
| Gross margin | Below 20% | Above 40% or clear path to it |