The OaaS model has been used by the City of Erie in Pennsylvania
Smart city technology provider Quantela has closed approximately $40m in growth capital from infrastructure investment firm Digital Alpha.
The two companies claim to have pioneered an outcomes-as-a-service (OaaS) approach to smart cities and urban infrastructure, leveraging customer outcomes such as revenue generation and expense savings to finance the capital investment for its solutions.
The OaaS approach enables Quantela to share responsibility with customers for achieving their social, economic, and environmental sustainability goals which will deliver greater value in the form of tangible outcomes that generate revenues or create new efficiencies.
“The growth capital from Digital Alpha is a validation of the market opportunities that exist for us,” said Sridhar Gadhi, founder and executive chairman, Quantela. “While Quantela has been growing exponentially since inception, the funding will enable us to expand our global presence faster through a combination of acquisitions and new OaaS projects, creating greater impact for societies.”
Quantela aims to enable communities to digitise their infrastructure despite budgetary restrictions by financing the initial investment and engendering a partnership between technology providers and clients. It recoups the original investment based on actual outcomes of cost-savings from deployment of technologies such as smart lighting or smart waste management as well as incremental revenues earned from user charges such as parking, advertising revenue, traffic violation tickets, or anonymised aggregated data monetisation.
This integrated approach focuses on tangible outcomes and long-term commitment to achieve customers’ objectives. The approach ensures that all parties are driven to meet and exceed project goals to create a win-win for all involved.
“The funding will enable us to expand our global presence faster through a combination of acquisitions and new OaaS projects, creating greater impact for societies”
The OaaS model has been implemented in the US city of Erie in Pennsylvania, where city leaders leveraged an initial investment from Quantela’s investment partner Digital Alpha to secure a matching grant that doubled the budget for the project to set up free public wifi across eight Federal Opportunity Zones. Erie will provide free public wifi to its citizens while implementing enhanced law enforcement surveillance, smart traffic control, smart parking, and energy-efficient street lighting.
Quantela’s latest OaaS deployment is in the Indian state of Kerala. The $20m project will be the first of its kind in India, which aims to enable the state to reduce road fatalities by improving traffic rules enforcement.
“Digital Alpha looks forward to deepening its existing partnership with the Quantela team, and to fund its novel outcome-based financing solution for the Company in order to pursue its differentiated OaaS model,” said Rick Shrotri, managing partner at Digital Alpha. “Quantela has clear, market-leading capabilities in smart cities, which have delivered tangible outcomes for its customers globally, addressing critical societal issues such as the digital divide, safety, security, and environmental sustainability.”
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