SolarHome closes oversubscribed Pre-Series A round at US$625K

By Digital News Asia October 5, 2017

Round was led by Uberis Capital, with participation from Beenext VC
Offers energy subscription plans of US$3 to US$15 per month

SolarHome closes oversubscribed Pre-Series A round at US$625K

SINGAPORE-based SolarHome, an energy start-up providing pay-as-you-go (PAYG) solar home systems for the off-grid, bottom-of-pyramid population in Southeast Asia, announced on Oct 4 the completion of an oversubscribed Pre-Series A equity funding round.

The round was led by Uberis Capital, an impact VC firm in Southeast Asia, with participation from Beenext VC and other regional investors.

Forum Capital, a venture builder based in Singapore, had previously provided seed funding. The company closed a US$625,000 (RM2,646,830) Pre-Series A round, bringing its total funding to date to over US$1.1 million. (US$1 = RM4.23)

The PAYG Solar business model offers off-grid customers “rent-to-own” plans of energy service subscription, priced at an affordable level of US$3 to US$15 per month. Users also have to make an initial downpayment of US$10 for SolarHome’s solar energy unit.

This lowers the barriers to adoption of solar home systems for the bottom-of-pyramid clients.

SolarHome closes oversubscribed Pre-Series A round at US$625K Greg Krasnov (pic, right), chairman of SolarHome and managing director of Forum Capital, commented: “This is the third Forum Capital-built venture to close an oversubscribed funding round in the last few months.

“SolarHome’s investment proposition lies at the intersection of a few highly exciting trends, such as financial inclusion, renewable energy, digitally-enabled lending, and Southeast Asian economic growth.”

The market opportunity for solar home systems is substantial in the region, with over 150 million people and close to 27 million households living off-grid in Southeast Asia. SolarHome is the first to bring PAYG solar home systems with self-sufficient power generating systems for households, such as solar-powered panels, batteries and electronics.

These systems also offer low upfront cost and low lifecycle cost, made affordable through SolarHome’s PAYG rent-to-own payment mechanism.

Under its PAYG scheme, SolarHome’s off-grid customers are able to purchase solar home systems with a small down payment.

To activate the power sources, customers will need to purchase energy tokens for daily, weekly or monthly top-up credits, either through scratch cards or mobile money.

The ownership of these systems will be automatically “unlocked” and transferred to the customer after two years.

Uberis Capital managing partner Nicolas de Boisgrollier, commented: “The PAYG model has emerged as a clear leader in off-grid electrification in Africa, India, and Latin America, having reached millions of homes and attracted over US$500million of investment over the last few years.

“We see the same tailwinds in Southeast Asia – massive off-grid population, rise of alternative credit scoring and mobile money, and a growing acknowledgement by governments and DFI’s that distributed generation is the answer.

“Unlike many other renewables businesses, PAYG is very scalable and operates profitably without subsidies, which makes this business model very attractive.”

Originating from East Africa, the PAYG approach has been successful in bringing clean and affordable energy to millions of off-grid customers in just a few years.

SolarHome is the first company to successfully implement this business model in Southeast Asia, where over 150 million people still live off-grid.

The company has completed a pilot in Myanmar, and will use the fundraising proceeds to increase its installations to over 10,000 units in the next year.