SunFi, the Nigerian clear tech startup that connects folks and companies who need photo voltaic vitality entry to fee plans that match their wants, has raised $2.325 million in seed funding.
The self-described vitality monetary tech platform acquired backing from lead buyers Nairobi-based Issue[e] and Sterling Financial institution’s SCM Capital Asset Administration and collaborating buyers akin to Voltron Capital, Norrsken Impression Accelerator, Ventures Platform and Sovereign Capital.
On a name with TechCrunch, CEO Rotimi Thomas stated the funding will assist SunFi develop its operations and enhance its capabilities to advocate one of the best techniques on the lowest value 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 data he acquired in faculty on renewable vitality and dealing in a number of roles regarding vitality, gasoline and energy tasks throughout Nigeria and different African international locations, together with a five-year stint at Siemens as head of market growth. Although 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 stated on the decision.
Nigerian households and companies have little or no entry to reasonably priced and dependable photo voltaic expertise, 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 techniques for people and companies. However regardless of being marketed as an inexpensive possibility, rural electrification within the type of microgrids and photo voltaic techniques will be costly to those sub-consumers due to their low spending energy.
“Clients would at all times ask us if there was a method for them to pay for the photo voltaic techniques in installments,” Thomas stated. “Due to that, we went to the banks and tried to work with them to finance this sort of fee, however we realized that banks additionally had an issue: they couldn’t sprint out credit score to prospects to finance retail photo voltaic techniques once they didn’t perceive the technical dangers concerned in proudly owning them.”
Additional market analysis revealed that different photo voltaic suppliers confronted the identical difficulty 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 started leasing these techniques in what later grew to become SunFi. They believed that as an outfit, they may handle the technical threat concerned with photo voltaic techniques and that it was extremely possible that prospects would pay as a result of they valued photo voltaic techniques and noticed them as essential items of energy infrastructure.
Give it some thought. Retail photo voltaic techniques are marketed through phrase of mouth, however with distribution being fragmented and minimal avenues to offer financing, platforms like SunFi that act as aggregators turn into interesting to prospects.
“The problem prospects face with photo voltaic suppliers is that they need options they will pay small for; nevertheless, these photo voltaic platforms can’t supply. As a result of banks are afraid of the technical threat concerned, they want one thing in between to speak with good photo voltaic suppliers and do the set up work whereas offering good capital to prospects in search of the fitting resolution. We’re the blokes in the course of all this,” Thomas stated.
SunFi creates worth for these clear vitality buyers by de-risking the technical and credit score threat 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 varied phases of vetting; 10 are its core suppliers, which have served greater than 129 prospects. Inside the previous yr, 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 offers prospects with two fee 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 corporate stated it’s engaged on a 3rd income stream the place it should help photo voltaic suppliers with stock financing.
Some startups already finance photo voltaic techniques with one or a number of entities, akin to Carbon. However Thomas doesn’t regard them as opponents; the identical goes for photo voltaic system suppliers. As a substitute, most of those platforms are companions since they already fill a necessity available in the market and SunFi’s job aggregates them. “As a result of we’ve got a novel expertise having been a photo voltaic supplier initially and seeing the frustration and challenges of installations in Nigeria, we’ve taken all that technical and credit score data to construct a system that hopefully works for purchasers, photo voltaic suppliers and banks,” stated the chief government.
“SunFi additionally has a portal for the photo voltaic supplier to log in, observe and handle their enterprise of constructing a number of forms of merchandise to market to prospects and get entry to financing. Traders have their dashboard to handle their portal to trace how their cash is spent when it comes to being deployed to handle portfolios or retail prospects. So we’re constructed as a fintech for the clear tech house, which doesn’t exist in Nigeria.”
The clear tech with fintech options will probably 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 time-frame because the 29-person crew continues to develop. The clear tech is in talks to boost further third-party capital, most probably debt, from industrial banks and different financing companions to channel that cash via the system and finance all of the vitality platform’s calls for to maintain this yr.
“SunFi has the power to remodel the best way clear vitality is accessed by households and companies throughout Nigeria by making a market of unpolluted vitality merchandise mixed with versatile fee choices — all of that are customized to the client’s monetary and vitality wants,” stated Lyndsay Holley-Handler, associate and chief enterprise builder at Issue[e] on the funding. “Platforms like these have unlocked entry to scrub vitality in different markets however don’t but exist in Africa. Such a innovation and disruption is why we determined to be a part of SunFi’s journey…”