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 Simply Energy
A Bridges Community Ventures Portfolio Company
Karen Darby, CEO
United Kingdom
www.simplyenergy.com
Launched in 2003, with a £125,000 commitment by CDVCA-member Bridges Community Ventures, Simply Energy is a telephone service that provides callers with information on local gas and electricity suppliers and prices, enabling them to compare prices and switch companies - at no cost to them. A concept developed by Karen Darby, founder and CEO, and Alistair Tillen, Sales and Marketing Director, Simply Energy gets a commission every time a customer switches companies, but because it has agreements with all of the suppliers and gets the same commission no matter which company a consumer chooses, it is able to provide straight information and impartial advice.
Working in an environment where utility companies have a bad reputation for using aggressive door-to-door sales tactics, Simply Energy offers consumers a no-pressure way to save money on household bills. But that is just one of Simply Energy's social benefits: Bridges Community Ventures invested in the company because its strong business plan suggested the potential for impressive financial success and robust job growth.
To get the company off the ground, Karen Darby and Alistair Tillen invested £35,000 of their own money. Bridges invested £125,000, with £43,000 invested as straight equity in return for 35% ownership of the company and the rest available to draw down as a loan if needed. Bridges' plan is to exit the investment in 3 to 5 years.
To qualify for financing, Simply Energy had to agree to move its call center to one of England's "deprived wards," areas where unemployment runs high and investment capital is scarce. Simply Energy moved to Mitcham, an impoverished community in Southeast London. It also had to agree to recruit 35 percent of its employees from deprived wards, although they have surpassed that goal and now recruit more than 60 percent of their employees from deprived wards.
Starting in January 2003 with just two people -- Ms. Darby and Mr. Tillen -- Simply Energy now has 12 full-time employees and hopes to nearly double that by the end of 2003. Rather than having its employees work on commission as many call centers do, Simply Energy pays a good flat wage to ensure that its agents do not have an incentive to pitch a hard sell to consumers to pick certain companies.
On average Simply Energy agents are paid £7.50 to £8.00 an hour, which is roughly .50p to £1.00 more than most call centers pay. It is also more than double the national minimum wage of £3.50 an hour. Typically U.K. employers do not offer health benefits because nearly everyone in the country receives national health benefits, pensions and a number of other government-provided benefits. Simply Energy does make a small contribution to employee pensions, though. Employees also receive high-quality training and a 10 to 20 percent monthly bonus for good attendance and a positive attitude.
Though the company only launched in January, indications are good that Simply Energy will meet all of its projected goals this year, which include a turnover of £1 million in year one and £2.3 million in year two. Simply Energy also plans to expand into other areas, offering the same kind of telephone information and advice services to consumers in areas, which could include insurance and telecommunications.
Bridges Community Ventures Fund Profile
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