SunFi, a Nigerian cleantech startup that connects people and businesses seeking access to solar energy with payment plans that meet their needs, has raised $2.325 million in seed funding.
Self-proclaimed energy financial technology platform receives backing from leading investor Nairobi-based Factor[e] Participating investors include SCM Capital Asset Management of Sterling Bank and Voltron Capital, Norrsken Impact Accelerator, Ventures Platform and Sovereign Capital.
In a call with TechCrunch, CEO Rotimi Thomas said the investment will help SunFi grow its business and improve its ability to recommend the best systems at the lowest cost to customers.
SunFi isn’t Thomas’ first rodeo at the helm of an energy startup. In 2018, he co-founded his Aspire, a photovoltaic equipment company based on the knowledge he acquired in renewable energy at university, including a five-year stint in energy, gas, and energy in Nigeria and other African countries. Played several roles related to power projects. At Siemens he is head of market development. Although this business turned into his SunFi three years later, the launch of Aspire marks the beginning of a lifelong journey that Thomas envisioned to solve the power problems facing individuals and businesses in Nigeria. It was something.
Homes and businesses in Nigeria have little to no access to affordable and reliable solar technology. This will reduce our dependence on grid-based electricity, which is plagued by inadequate generating capacity and unable to serve most of her 200 million people in Nigeria living in rural areas. Looking to off-grid solutions that use solar energy is an option for those who need electricity for simple necessities such as lighting, heating, and communications. Rotimi’s previous startup did just that. Aspire runs a power-as-a-service business model and has helped install over 500 solar systems for individuals and businesses. However, despite being marketed as a cheap option, rural electrification in the form of microgrids and photovoltaic systems can be expensive for these sub-consumers due to their low purchasing power.
“Customers have always asked us if there is a way to pay for their solar system in installments,” says Thomas. “So we went to the bank and tried to work with the bank to finance this kind of payment, but we realized there was a problem with the bank as well. We failed to destroy the trust of our customers when we offered them .We do not understand the technical risks involved in owning them.”
Further market research revealed that other solar producers were also facing the same problem of customers demanding installment payments. Thomas and his co-founders, his COO Tomiwa Igun and his CTO Olaoluwa Faniyi, decided to provide credit and began leasing these systems in the company that would later become his SunFi. . They say they are more likely to pay because they can manage the technical risks associated with solar PV systems all at once, and because their customers appreciate PV systems and see them as an important part of their power infrastructure. I believed.
please think about it. Retail solar systems are sold by word of mouth, but the fragmented distribution and minimal financing avenues make platforms like SunFi that act as aggregators attractive to customers. I’m here.
“The challenge facing solar operators is that customers are looking for solutions that allow them to make small payments. However, these solar platforms cannot deliver because banks fear the technical risks involved , we need something to talk to and work with good solar providers to do the installation work, while providing enough capital for customers looking for the right solution. Thomas said.
By mitigating the technology and credit risks associated with financing a portfolio of solar solutions, SunFi creates value for these clean energy investors and paves the way for financing as a service play for clean energy providers. Since its official launch last February, SunFi has had over 40 solar system vendors on the platform in various stages of review. 10 are its core providers, serving more than 129 customers. Over the past year, the year-old energy startup has deployed more than $600,000 of his money to these customers through partnerships with financial institutions.
A Nigerian-based energy company offers its customers two payment methods. A lease-to-owner model, where the customer pays for the solar system in installments after the initial deposit, and a subscription model, where the customer pays monthly for the solar system. SunFi’s revenue comes from the lease-to-own model’s margin and the latter’s subscription fees. The company said it is working on a third revenue stream to help solar producers with inventory financing.
Some start-ups are already funding solar systems with one or more entities such as Carbon. However, Thomas does not see them as competitors. The same applies to solar system providers. Instead, most of these platforms are partners because they already meet market needs and SunFi’s work brings them together. “Originally as a PV operator and having unique experience of witnessing the frustrations and challenges of installations in Nigeria, I will use all of my technical and credit knowledge to help our customers, PV operators , and built a system that works well for banks,” said the chief executive.
“SunFi also has a portal for solar providers to log in, build different types of products to market to their customers, and track and manage their business accessing funding. We have a dashboard to do and we can track how the money is being spent in terms of being deployed to manage portfolios and retail customers, so we have a clean market that does not exist in Nigeria. It is built as fintech for the tech space.”
sun phi team. Image credit: Sanphi
Cleantech, with its fintech capabilities, will use this funding to bolster its platform over the next 12-18 months. And as the team of 29 continues to grow, he plans to convert over 4,000 customers in the same period. Cleantech will raise additional third-party equity, possibly debt, from commercial banks and other financing partners to finance that through the system and fund all energy platform requests it will process this year. We are talking about
“SunFi has the ability to transform the way homes and businesses across Nigeria access clean energy by creating a marketplace for clean energy products combined with flexible payment options. It’s personalized for your financial and energy needs,” said Lyndsay Holley. -Factor Handler, Partner and Chief Venture Builder[e] About investment. “Such a platform has unlocked access to clean energy in other markets, but does not yet exist in Africa. This kind of innovation and disruption is why we decided to join him on his SunFi journey…”
