Singapore-based Solarhome, an energy startup providing pay-as-you-go (PAYG) solar home systems for households living off the grid in Southeast Asia said yesterday that it has closed an oversubscribed Pre-Series A funding round.
The round raised US$625K, bringing its total funding to date to over US$1.1 million. It was led by Uberis Capital – an impact venture capital firm in Southeast Asia, as well as participation from Beenext Venture Capital and other regional investors.
According to Greg Krasnov, the Chairman of SolarHome, there are close to 27 million households in Southeast Asia that are living without electricity. Every year, these households burn an annual amount of US$3 billion of their income on kerosene, disposable batteries, and other sub-optimal energy solutions.
To this end, SolarHome brings the PAYG solar home systems with self-sufficient power generating systems for households, including solar-powered panels, batteries, and electronic.
The PAYG Solar business model provides off-grid customers a rent-to-own plans of energy service subscription, priced at US$3 to US$15 per month. Users also only need to make an initial down payment of US$10 for a SolarHome solar energy unit.
“Unlike other solar systems in the market which are difficult to assemble and expensive to maintain, SolarHome offers a two-year warranty – and this creates a unique value proposition,” Krasnov said.
The PAYG approach originated from East Africa and has been proven to be successful in bringing clean and affordable energy to millions of off-grid households in just a few years. SolarHome is the first company to successfully implement this business model in Southeast Asia.
Uberis Capital managing partner Nicolas de Boisgrollier said, “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$500 million 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.”
SolarHome aims to increase its installations to over 10,000 units next year from approximately 2,000 units by end-2017. “We expect the company to generate US$2 million to US$3 million run-rate revenue and become EBITDA positive by the end of 2018,” Krasnov said.