SunFi, the Nigerian clear tech startup that connects individuals and companies who need photo voltaic vitality entry to cost plans that match their wants, has raised $2.325 million in seed funding.
The self-described vitality monetary tech platform obtained backing from lead buyers Nairobi-based Factor[e] and Sterling Bank’s SCM Capital Asset Management and taking part buyers akin to Voltron Capital, Norrsken Impact Accelerator, Ventures Platform and Sovereign Capital.
On a name with TechCrunch, CEO Rotimi Thomas mentioned the funding will assist SunFi develop its operations and enhance its capabilities to suggest the very best methods on the lowest price to prospects.
SunFi isn’t Thomas’ first rodeo on the helm of an vitality startup. In 2018, he co-founded Aspire, a photo voltaic set up firm based mostly on the information he acquired in school on renewable vitality and dealing in a number of roles referring to vitality, fuel and energy tasks throughout Nigeria and different African international locations, together with a five-year stint at Siemens as head of market growth. Though this enterprise morphed into SunFi three years later, launching Aspire was the primary of a lifelong journey that Thomas had envisioned in attempting to repair the electrical energy points people and companies face in Nigeria, he mentioned on the decision.
Nigerian households and companies have little or no entry to reasonably priced and dependable photo voltaic know-how, which reduces their reliance on grid-based energy that suffers from inadequate era capability and fails to serve most of Nigeria’s 200 million individuals who dwell in rural areas. Turning to off-grid options that use photo voltaic vitality is an possibility for these individuals who want electrical energy for easy requirements like lighting, heating and communication. And that’s what Rotimi’s earlier upstart did. Aspire ran a power-as-a-service enterprise mannequin that helped set up greater than 500 photo voltaic methods for people and companies. But regardless of being marketed as an affordable possibility, rural electrification within the type of microgrids and photo voltaic methods may be costly to those sub-consumers due to their low spending energy.
“Customers would always ask us if there was a way for them to pay for the solar systems in installments,” Thomas mentioned. “Because of that, we went to the banks and tried to work with them to finance this kind of payment, but we realized that banks also had a problem: they couldn’t dash out credit to customers to finance retail solar systems when they didn’t understand the technical risks involved in owning them.”
Further market analysis revealed that different photo voltaic suppliers confronted the identical concern of consumers requesting to pay in installments. Thomas and his co-founders — COO Tomiwa Igun and CTO Olaoluwa Faniyi — determined to offer credit score and commenced leasing these methods in what later turned SunFi. They believed that as an outfit, they may handle the technical danger concerned with photo voltaic methods and that it was extremely doubtless that prospects would pay as a result of they valued photo voltaic methods and noticed them as crucial items of energy infrastructure.
Think about it. Retail photo voltaic methods are marketed through phrase of mouth, however with distribution being fragmented and minimal avenues to offer financing, platforms like SunFi that act as aggregators develop into interesting to prospects.
“The challenge customers face with solar providers is that they want solutions they can pay small for; however, these solar platforms can’t offer. Because banks are afraid of the technical risk involved, they need something in between to talk with good solar providers and do the installation work while providing good capital to customers looking for the right solution. We’re the guys in the middle of all this,” Thomas mentioned.
SunFi creates worth for these clear vitality buyers by de-risking the technical and credit score danger concerned in financing portfolios of photo voltaic options, opening avenues for lending as a service play for clear vitality suppliers. Since its official launch final February, SunFi has onboarded over 40 photo voltaic system distributors to its platform at numerous levels of vetting; 10 are its core suppliers, which have served greater than 129 prospects. Within the previous 12 months, the one-year-old vitality startup has deployed greater than $600,000 to those prospects through its partnerships with monetary establishments.
The Nigeria-based vitality firm supplies prospects with two cost strategies: a lease to personal, the place after an preliminary deposit, prospects make funds in installments earlier than owing the photo voltaic system, and a subscription mannequin, the place prospects pay to make use of the photo voltaic system month-to-month. SunFi’s revenues are from the margin on the lease-to-own mannequin and subscription charges from the latter. The firm mentioned it’s engaged on a 3rd income stream the place it’s going to help photo voltaic suppliers with stock financing.
Some startups already finance photo voltaic methods with one or a number of entities, akin to Carbon. But Thomas doesn’t regard them as opponents; the identical goes for photo voltaic system suppliers. Instead, most of those platforms are companions since they already fill a necessity out there and SunFi’s job aggregates them. “Because we have a unique experience having been a solar provider initially and seeing the frustration and challenges of installations in Nigeria, we’ve taken all that technical and credit knowledge to build a system that hopefully works for customers, solar providers and banks,” mentioned the chief government.
“SunFi also has a portal for the solar provider to log in, track and manage their business of building several types of products to market to customers and get access to financing. Investors have their dashboard to manage their portal to track how their money is spent in terms of being deployed to manage portfolios or retail customers. So we’re built as a fintech for the clean tech space, which doesn’t exist in Nigeria.”
The SunFi staff. Image Credits: SunFi
The clear tech with fintech options will likely be seeking to improve its platform over the following 12-18 months with this financing. It additionally intends to transform greater than 4,000 prospects inside that very same timeframe because the 29-person staff continues to develop. The clear tech is in talks to lift further third-party capital, almost certainly debt, from industrial banks and different financing companions to channel that cash by the system and finance all of the vitality platform’s calls for to handle this 12 months.
“SunFi has the ability to transform the way clean energy is accessed by households and businesses across Nigeria by creating a marketplace of clean energy products combined with flexible payment options — all of which are personalized to the customer’s financial and energy needs,” mentioned Lyndsay Holley-Handler, companion and chief enterprise builder at Factor[e] on the funding. “Platforms like these have unlocked access to clean energy in other markets but don’t yet exist in Africa. This type of innovation and disruption is why we decided to be part of SunFi’s journey…”