SunFi, Nigerian’s clean tech startup has raised $2.325 million in seed funding towards aiding financing and accessibility of solar energy by investors and customers respectively.
The company connects individuals and businesses who want solar energy access to payment plans that match their needs.
The $2.325 million fund raised by SunFi was possible with support of Nairobi-based Factor (e) lead investors, SCM Capital Asset Management and participating investors like Voltron Capital, Sovereign Capital, Ventures Platform and Norrsken Impact Accelerator.
This investment seeks to aid SunFi grow its operations and improve upon its capabilities to suggest the best systems with the lowest costs to customers – typical of every rational customer wanting to be offered the best quality in exchange for a small quantity, fee or charge associated with acquiring the facility, said Rotimi Thomas, Chief Executive Officer (CEO) of SunFi.
“Customers would always ask us if there was a way for them to pay for the solar systems in installments.
“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.”
Rotimi Thomas
Research conducted revealed that other solar providers have same challenges with customers’ numerous requests to be given room to make payments in installments.
As such, Thomas, in agreement with his co-founders – Tomiwa Igun, Chief Operating Officer (COO) and Olaoluwa Faniyi, Chief Technology Officer (CTO), decided to meet the needs of their customers by leasing their systems and this is how SunFi came into being.
Thomas and his team were confident that as a company, they had the capacity to handle the technical challenges associated with solar systems, and it was highly probable that customers would make payments due to their recognition of the value and importance of such systems as essential components of their power infrastructure.
This is because retail solar systems advertising is usually done by word-of-mouth, but with a dispersed distribution network and limited financing options, aggregator platforms like SunFi become an attractive solution for customers due to the ease of access and convenience they offer.
The remedy provided by SunFi to addressing the risks associated with making solar energy available to its customers is to reduce the technical and credit risk that is associated with financing portfolios of solar solutions and opening avenues for lending – as a service play for clean energy providers.
As a result, since its launch in February 2022, the company SunFi has integrated over 40 solar system suppliers onto its platform, with varying levels of screening. Of these, 10 are considered its primary suppliers and have served over 129 clients. The energy startup of SunFi was therefore able to provide over $600,000 to these clients through its collaborations with financial organizations, in the past 12 months.
SunFi’s payment plan for its customers
SunFi has eased accessibility of solar energy by offering its customers a two payment option: a lease-to-own option and a subscription model.
The former has to do with customers making an initial deposit and then proceeding to make payments in installment before fully owning the solar system whereas the latter, allows customers to pay a monthly fee to utilize the solar system.
SunFi’s income comes from the margin on the lease-to-own model and subscription fees from the latter. The company also mentioned that it is in the process of developing a third source of revenue by offering inventory financing support to solar suppliers.
Thomas opined not being threatened by competition from other startups who already finance solar systems but partners with them to meet a need in the specific area of their expertise.
“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.”
“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.”
Rotimi Thomas
Lyndsay Holley-Handler, Partner and Chief Venture Builder at Factor (e) stated that platforms like SunFi have unlocked access to clean energy in other markets but yet to exist in Africa.
“This type of innovation and disruption is why we decided to be part of SunFi’s journey…”
Holley-Handler
READ ALSO: Ghana Integrity Initiative Calls on Government To Resource Special Prosecutor To Fight Corruption
