The average Nigerian business does not rely on a single source of electricity. Instead, it operates a patchwork of sources: grid power, diesel generators, and increasingly, solar systems. That fragmentation often comes with a steep price.
According to the World Bank, Nigeria suffers from one of the most unreliable electricity supplies in the world, with firms experiencing frequent outages that can last days or even months. In response, businesses have built alternative power systems. Estimates suggest that more than 70% of Nigerian businesses own or share diesel generators, effectively substituting for a grid that fails to meet demand.
The cost of that workaround is enormous. In 2023 alone, Nigerian businesses and households spent over ₦14 trillion (roughly $10 billion) on generators and fuel, according to public comments from the country’s former power minister.
“Power costs can go as high as 60% of operating expenses for some of our customers,” says David Adebiyi, Chief Technology Officer of PowerLabs, a startup trying to bring order to this chaos.
A software layer for a fragmented grid
Founded in 2023 by David Adebiyi, Tobechukwu Arize, Eghonghon-aye Eigbe, and Joses Williams, PowerLabs is building what it describes as an intelligent orchestration layer for business energy use.
Its core product, Pai, sits on top of a company’s existing power infrastructure — whether that includes diesel generators, solar panels, inverters, or grid connections — and helps determine how and when each source should be used.
“People don’t just want to monitor usage,” Adebiyi says. “They want guaranteed uptime, and they want lower costs.”
Energy monitoring tools are not new. Many Nigerian businesses already track consumption across generators and grid supply. But Pai goes a step further by acting on the data it tracks.
At the heart of the system is a hardware device, designed and prototyped in Lagos, that connects to a company’s various power sources and loads. The device streams real-time data into Pai’s software platform, which then analyses usage patterns, fuel consumption, and availability across sources.
Victoria Fakiya – Senior Writer
Techpoint Digest
Make your startup impossible to overlook
Discover the proven system to pitch your startup to the media, and finally get noticed.
From there, businesses can set specific priorities. For example, a business could choose to minimise cost, maximise uptime, or optimise for cleaner energy use. Following the business’s priorities, Pai then makes recommendations or, in some cases, automated decisions based on those parameters. These insights are delivered through a web dashboard or push notifications, allowing operators to act quickly without needing to constantly monitor the system.
“We’re not just showing you data,” he says. “We’re acting on that data for you.”
The economics of optimisation
The opportunity PowerLabs is chasing is significant. Nigeria’s installed electricity generation capacity hovers around 13,000–14,000 gigawatts, serving a population of over 200 million people. By contrast, diesel and petrol generators across the country contribute several times that capacity.
This creates an energy environment in which businesses effectively manage microgrids alongside their core businesses. For PowerLabs’ customers, that includes hospitals, manufacturers, and retail chains, this complexity translates directly into higher costs.
Pai’s value proposition is to continuously scan for these inefficiencies. Its cost-saving engine analyses incoming data to identify opportunities to reduce fuel consumption or shift loads between power sources.
In some cases, the results are immediate. PowerLabs says it has helped certain customers cut energy costs by up to 15%. However, those savings are not uniform month to month, as they depend on factors such as fuel prices, grid availability, and seasonal demand.
Still, in an environment where energy can account for half of operating expenses, even incremental gains matter.
“My focus is ensuring that businesses don’t have to choose between dying because of rising diesel costs and surviving,” Adebiyi says.
Selling efficiency is harder than building it
Despite the clear economic case, getting companies to adopt a new energy management system is not straightforward. PowerLabs’ biggest challenge so far has not been technology but change management.
“People don’t necessarily adopt a new product just because it works well,” Adebiyi notes.
Inside large organisations, different teams often have competing priorities. Operations teams may prioritise uptime at any cost, while finance departments push for cost reductions. Introducing a system that tries to balance both can create internal friction.
To navigate this, PowerLabs often starts with pilot programmes. These limited deployments allow companies to test the system in a controlled environment before committing to a broader rollout.
For businesses that already use some form of energy management software, Pai is designed to integrate with existing systems, allowing customers to layer optimisation on top of their current setup. This interoperability has been key to winning over more sophisticated clients, particularly those operating multiple sites.
Building from Lagos for a global problem
Although PowerLabs is rooted in Nigeria’s energy challenges, its ambitions extend beyond energy-poor markets.
Adebiyi argues that its core belief that businesses increasingly operate across multiple energy sources is not unique to Nigeria. Even in developed markets, rising energy costs, grid instability, and sustainability targets are pushing companies toward hybrid energy setups that combine grid power with solar, battery storage, and backup systems.
In that sense, Pai’s ability to optimise across different energy inputs could have broader applications. A company in Europe, for example, might use it to balance grid electricity with solar generation and battery storage, minimising both cost and emissions.
PowerLabs’ approach — collecting granular data on both energy sources and loads, then using that data to inform decisions — positions it within a growing category of energy intelligence platforms.
To accelerate its growth, PowerLabs recently raised a pre-seed round led by Breega, with participation from Catalyst Fund, Mercy Corps Ventures, and Kaleo Ventures.
For investors, the bet is not just on Nigeria’s energy crisis but also on the broader need for software that can coordinate increasingly complex energy systems.
“We backed PowerLabs at the pre-seed stage because we believe intelligent orchestration will be essential to solving Africa’s energy reliability challenge,” said Tosin Faniro-Dada, Partner at Breega. “The team is building the software and hardware layer that enables businesses to coordinate multiple distributed energy sources in real time. We’re excited to support them as they prove the impact of this model across critical sectors over the next 12–18 months.”
The company says the new funding will be used to expand Pai’s deployment across more businesses and industries, as well as to continue refining its hardware and software stack.
Its pricing model is tailored to each customer, reflecting the variation in energy usage and infrastructure, but at its core, PowerLabs operates as a SaaS business, charging companies for access to its optimisation platform.
Nigeria’s electricity challenges are unlikely to be resolved quickly. Decades of underinvestment, regulatory complexity, and infrastructure constraints have left the grid struggling to keep up with demand. For businesses, that means the burden of reliability will continue to fall on their own shoulders.
What startups like PowerLabs are betting on is that this burden can be managed more intelligently. Rather than replacing generators or overhauling the grid, they are building a layer on top, one that helps businesses make better decisions about the energy they already have, and in a market where power is both essential and expensive, that may be a good start.