The hardtech boom is rerunning a past playbook.
A few years ago, I spoke as part of Clubhouse (RIP?) about "Everything I Know in Fintech I Learned from Microfinance." So many of the innovations, hacks, and trends we were seeing in US tech had been tried a decade before in places across Africa, Asia, and Latin America.
I spent my early career launching businesses in emerging markets, so the parallels were obvious. Lately those early business models have been bubbling up again. Only this time it's what I'm seeing across hardtech, from home batteries to factory robots to satellites to datacenters. The same handful of business model innovations and patterns I watched play out a decade ago in Nairobi and Jakarta are showing up again, now in richer markets with bigger price tags and better press.
Emerging-market innovation was forced into existence by a specific set of constraints: valuable hardware, customers who can't pay for it upfront, incumbents who won't serve them, and infrastructure that's missing or unreliable. The reason those solutions are reappearing is that rich-world hardtech now faces similar constraints in new corners: small manufacturers priced out of automation, a grid with multi-year connection queues, rural areas the broadband maps forgot. And in each case, the barriers are less the result of the actual technology than the financing complexities behind it. We are now seeing new ways to price, finance, and own.
I should say upfront that I'm not a hardware person. I can't tell you why one battery chemistry beats another or how a robot arm gets calibrated. But from a business-model perspective, the patterns are undeniable, and exciting to see. Three of them stand out.
One of the most striking parallels is businesses taking advantage of a ubiquitous trend across emerging markets: taking items with high upfront costs and turning them into an ongoing rental. In most markets, the most expensive part of an electric scooter or rickshaw is the battery, which is often 40% of the cost. So across India, Southeast Asia, and East Africa they stopped selling the battery at all. They let people buy the cheaper vehicle and swap a depleted battery for a charged one at a kiosk, paying a small fee each time. Gogoro pioneered it in Taiwan and now runs more than 12,000 swap stations; Sun Mobility does it for India's delivery fleets; Ampersand does it for boda-boda taxi drivers in Rwanda and Kenya. The swapping company owns, charges, and maintains the batteries. The driver just pays for use.
This shift is showing up across hardtech. Formic rents factory robots and only charges when the robot hits the agreed output; its founders describe the company as a financing operation bolted onto an engineering one. CoreWeave, the AI-cloud company, is the same idea at industrial scale and maximum leverage: it borrows billions against its Nvidia chips and its customer contracts, and the debt earns an investment-grade rating off the creditworthiness of the customer on the other end, not off CoreWeave itself. It's the same logic run in reverse: instead of financing the customer's use of the asset, CoreWeave finances itself against the customer. And the model is becoming infrastructure in its own right: Fragile (full disclosure: a Restive portfolio company) gives hardware manufacturers the software to turn an outright sale into a rental. It is the financial plumbing that lets any company run this play, not just the ones built around it from day one.
Battery-by-the-swap became robot-by-the-hour. In every case the expensive asset stays centrally owned and usage is spread over smaller payments, which means each of these "hardware" companies is really a lending business with a machine out front.
The most famous emerging-market pattern of all is the leapfrogging of a whole generation of technology. Much of the world never got copper landlines; it jumped straight to mobile. It never got bank branches; it jumped straight to mobile money. When you have no legacy infrastructure to protect, you skip the expensive shared layer entirely and meet the customer where they already are.
Starlink is the same trick in orbit. A rural household skips the fiber trench, or an ordinary phone skips the cell tower altogether and talks straight to a satellite. Thousands of cheap satellites in low orbit can serve dispersed populations at a fraction of the cost, a trend benefiting rural markets everywhere from Kansas to Kazakhstan.
The same leap is happening on the ground with power. Datacenter developers staring down five-year interconnection queues are skipping the grid the way Kenyan households skipped the utility: they generate on site. Crusoe builds compute next to stranded natural gas at the wellhead, and a growing number of AI campuses are being built behind the meter with their own turbines and fuel cells, connecting to the grid later or never. The grid queue is the rich world's version of the utility that never shows up, and the response is identical: stop waiting for the shared infrastructure and bring your own.
Pay-as-you-go solar such as M-KOPA, d.light, and their peers let off-grid households buy a solar system in small installments until they own it outright. Each home ends up with its own generator, so the grid effectively gets built from the bottom up: owned in pieces by the people who use it, rather than top-down by a single utility. Some, like Okra Solar, go a step further and wire those individually-owned systems into a mesh so neighbors can share power.
That ownership model is now turning up in rich-world infrastructure. Base Power gives a household a battery and makes it a co-owner of a distributed power plant, sharing the grid-services revenue rather than just selling a box. Tesla runs the same play with its Virtual Power Plant: thousands of Powerwall owners in Texas and California let their batteries bid into the wholesale market as a single fleet and get paid for it. And Helium is a wireless network built from hotspots that ordinary people buy and operate, shifting ownership of the infrastructure from a few telcos to a crowd; it now runs more than 800,000 hotspots and has signed up over half a million paying mobile subscribers. The thread from M-KOPA to Helium is the same: the people who use the network own its nodes, and ownership turns users into people who actually maintain and defend the thing.
Strip away the batteries, the satellites, and the robots, and the new thing in each pattern isn't the machine. It's the financial architecture. Pattern one is a new way to price and own an asset: you pay for use, someone else holds and finances the hardware. Pattern two runs on new project finance: you can skip the grid because on-site power is now financeable, and you can launch ten thousand satellites because a capital structure exists to fund them. Pattern three is a new ownership structure: pay-to-own, shared margins, and tokenized nodes. The common substrate under all three is money, not metal.
So, with this playbook in hand, how did these businesses fare? These are tough markets, where many of their customers make roughly $2/ day and the cost of capital can be 15-25%. This makes reaching a massive scale that would be enticing to US investors very challenging. But through all of that, the financial side has been the consistent bright spot. Gogoro's swapping annuity now generates roughly $150 million a year in growing recurring revenue. M-KOPA passed $400 million in revenue and turned its first profit by leaning into the lending layer it originally built for solar. d.light has raised over $1 billion in securitized financing, with bonds rated investment grade. In each case the machine out front broke even at best, and the lending business behind it is what scaled. That's the extrapolation that excites me: if the financial architecture worked despite those headwinds, the same playbook now gets to run in markets where the debt is investment grade and the customer is a Fortune 500 manufacturer or an AI lab.
This is one of the reasons we're watching the hardtech space at Restive. Because at the end of the day, the challenge with scaling many of these innovations isn't the need, or the idea, or the brand. It's the business model and the financial innovation behind them. We saw this pattern play out in emerging markets a decade ago. It's exciting to watch it play out again.
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