Wednesday, 15 June 2022

Meet Pylon: The data-driven company making infrastructure more efficient

Using data to improve efficiency in our traditional infrastructure: Enterprise sits down with Pylon’s Ahmed Ashour. Having recently raised USD 19 mn in a seed funding round, and already hit profitability following its 2017 launch, infrastructure management platform Pylon is on a roll. We sat down with Pylon’s co-founder and CEO Ahmed Ashour for a deep-dive into how the company’s data-driven software is helping to make traditional infrastructure sectors — namely, electricity and water distribution — more efficient.

The main challenge facing water and electricity providers: Substantial revenue losses from structural inefficiencies. This lost revenue could amount to close to USD 2 bn per year in Egypt alone, and some USD 400 bn in emerging markets, says Ashour. It comes primarily from inefficient revenue collection, electricity or water theft from tampering, and leakages or technical losses happening across the networks, he adds. Upgrading infrastructure to make it more efficient is usually a cost-intensive undertaking for utility providers, Ashour says.

This is where Pylon comes in: Pylon’s software collects and analyzes vast amounts of data, identifying systemic inefficiencies that providers can take immediate steps to address, says Ashour. The AI embedded in its tech can make forecasts and recommendations for more efficient, lower-emissions usage. “In essence, we develop the technological layer for the infrastructure sector,” Ashour says.

So how does it work? Pylon supplies software, communication technology and smart meters to its subscribers, says Ashour. The software — which it connects to all the subscriber’s different assets — has different functions, but is broadly focused on data collection, data crunching or analysis, and feedback mechanisms, some of which are automated, he adds.

For electricity, it’s data collection, Jim, but not as we know it: Electricity utilities are used to getting a single data point a month, by sending someone to read the electricity meter, Ashour tells Enterprise. “But our smart meters take a reading every 15 minutes, and each one of these measures around 32 different parameters,” including consumption, the volts and amperes of the electricity, the load profile (the electricity usage going up and down at different intervals), and the quality of the electricity provided. “The more data we can collect, the greater our insights and understanding, and we can make better forecasts and decisions.”

When it comes to smart technology, not as much can be measured and forecast with water, because water meters are battery operated, says Ashour. “Our water forecasting is mainly about usage. We can look at the direction and speed of the flow, but at the moment we can’t conduct as thorough an analysis as in the electricity sector.”

The data is then communicated to a centralized data center through power line carriers, broadband or even radio frequencies, says Ashour. Once it arrives in the data center — which could be in a physical space attached to the customer’s location, or in the cloud — the system starts the data crunching process.

Data analysis informs and directs the different functions of the platform: Pylon’s machine learning software can cross reference newly-collected data with data already in its system to detect suspicious patterns of activity, indicating electricity theft, for example, Ashour says. When the system flags a suspicious pattern, it’s automatically assigned to a human inspector, who investigates the situation. The software can also show companies where in the network their biggest losses from leakages or theft are occurring. It can help pinpoint the root cause of a problem, and where infrastructure needs to be fixed or maintained, he adds.

Along with system optimization, in response to demand: Pylon’s system can put a limit on individual users’ electricity consumption during peak demand hours. Electricity distribution companies often struggle with supply when demand is at its peak and are forced to either cut the electricity supply in different areas, or to install more generation capacity — which may then only be used for a few hours a day, a few months a year. Pylon can limit consumption to 40 or 50 amperes during peak hours, so individuals still have electricity access but it’s capped, he adds.

And lower-emissions electricity supply: Pylon can maximize generation from renewables, by using data analysis to predict solar or wind power generation during a given time period. “We can then link electricity providers to sources of conventional energy, like gas turbines, to supplement what’s needed,” says Ashour. The company tries to ensure gas plants aren’t used during peak demand hours, which leads to higher CO2 emissions, he adds.

How the money comes in: “We consolidated everything into the technology,” says Ashour. “There’s a new idea that software is eating infrastructure, which is what we adopted. It basically means you provide the whole service in the software layer. We minimized the need for hardware, and built a lean solution from scratch. So we focus on making our product very efficient, solving all the challenges, and constantly enhancing our software. Then we take this software, and sell it to numerous customers through our subscription model.”

Pylon’s service model is subscription-based, with utility providers usually paying over a 10-year period: “There’s no upfront payment or substantial one-time investment for customers,” says Ashour. Paying in installments over a long period makes it a more cost-effective service for the utilities providers, he adds.

Ashour and his co-founder Omar Radi think of the company as the Android of the smart grid — meaning the company integrates its own software with hardware provided by partners from all over the world. It works with around 30 different hardware providers from locations including Egypt, Europe, China, and the US. Pylon also partners with Amazon Web Services for its data storage, and has designed its own cloud storage offering, says Ashour.

Your top infrastructure stories for the week:

  • New crude storage facility: The Oil Ministry plans to build a EGP 1.8 bn crude oil storage facility south of Cairo, which would receive crude from Ain Sokhna and transfer it to the Assiut oil refinery.
  • Alameda hospitals to get new equipment + operating systems: Alameda Healthcare has signed an MoU with the Egyptian arm of medtech firm Medtronic that will give Alameda hospitals access to Medtronic’s full portfolio of “cutting-edge medical devices, including newly launched and premium products.”
  • IT infrastructure contractor Benya Group is looking to raise USD 150 mn via a private placement before the end of 2Q2022 to finance its expansion plans in Africa.
  • SpaceX launched the Nilesat 301 satellite from Cape Canaveral, sending it into orbit where it will provide TV broadcasting and internet services to Egypt and other parts of Africa and the Middle East.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.