SolarHome, a Singapore-based energy startup with presence in Myanmar, has raised a pre-Series A round that has now helped it secure a total of $1.1 million in funding.
Why This Matters
Rural areas in Southeast Asia and Africa have remained the most challenging to distribute electricity to.
More than 600 million people in Africa and an estimated 65 million people in Southeast Asia remain without electricity.
And of the 575 million in Southeast Asia that do have access to electricity, 250 million remain reliant on solid biomass (like dried wood) as their main cooking fuel.
Read MoreThe deal’s support of the Pay-As-You-Go (PAYG) payment model enables low-income customers in Southeast Asia to subscribe to SolarHomes’ “rent to own” energy plans for as low as $3-15 per month, increasing chances for the poor to access electricity.
The startup is operating in Myanmar as its maiden market, and plans the funds it has raised to increase its installations to over 10,000 units in 2018. SolarHome claims to be the first player in this area.
“We see the same tailwinds in Southeast Asia,” commented Nicolas de Boisgrollier, managing partner at Uberis Capital, the impact investment firm who facilitated the pre-Series A. “PAYGO is very scalable and operates profitably without subsidies, which makes this business model very attractive,” he added.
How SolarHome’s PayGo Works
Under a conventional PAYGo model, a low-income household can take home a solar home system by paying a downpayment or deposit – about 10% to 20% of a system’s cost of ownership – and committing to a certain number of ongoing payments by signing a solar lease with a PAYGo operator.
SolarHome’s PAYGo plan will allow its customers to purchase energy tokens for daily, weekly or monthly top-up credits, either through scratch cards or mobile money. The ownership of these systems will be automatically unlocked and transferred to the customer after two years.
Not Without Challenges
As with PayGo solutions being implemented in Africa and other regions, challenges remain, among which, scale is the main issue. A briefing note, PAYGo Solar: Lighting the way for flexible financing and services, examines this and four key industry challenges in more detail from a financial inclusion perspective.
Read Some More
“PayGo is Emerging as a New Payments Solution for OffGrid,” Invest Impactly, July 2017
“Uberis leads SolarHome Pre-series A,” Deal Street Asia, September 2017
“SolarHome lands in Myanmar with $25MM,” Deal Street Asia, April 2017
“SolarHome installs 1,000 PAYG systems in Myanmar,” PVTech, Q4 2017
