South African solar startup raises R150 million in funding
The power crisis in South Africa has led to more and more people seeking alternative, reliable forms of power generation – and as a result, a startup that aims to make solar energy more accessible to a wider audience has recently completed a record-setting seed-funding round.
South African startup Hohm Energy, which connects homeowners with installers and financiers to ease the process of installing rooftop solar panels, saw over R154.8 million ($8 million) raised from venture capitalists.
The investments, which include funders E3 Capital and 4DX Ventures LP, mark the largest seed round for a tech startup in South Africa (previously $5.3 million).
South Africa has been facing a crippling energy crisis, as issues at state-owned power utility Eskom have caused the country to face daily blackouts.
As such, solar installations in the country have boomed – with data showing that the amount of rooftop solar panels installed increased to 4,412 megawatts in South Africa as of June last year compared with 983 megawatts in March in the prior year.
Launched in 2021, Hohm Energy said that it looks to “revolutionise the entire end-to-end solar journey.” by creating its own software platform and marketplace to streamline the rooftop solar market for installers and buyers.
The company said that it provides solar installers with the opportunity to design and manage their own solar projects, while customers can get their properties’ solar energy requirements digitally and access credit financing, orders, and after-sales services like repairs.
Previously, solar installations were the preserve of affluent homeowners, requiring a large immediate payment. However, the company seeks to change that, sharing that the cost of solar installation has dropped by about 50% since 2022, making it more feasible for less affluent South Africans to install solar panels on smaller homes.
Hohm has secured deals to provide homeowners with financing options from banks, including Investec Ltd., Nedbank Group Ltd., FirstRand Ltd. and Capitec Bank Holdings Ltd, providing options that allow people to pay for the panels, inverters and batteries over several years.
CEO of the company, Tim Ohlsen said that “the energy system in South Africa is broken.” As such, he believes that “ClimateTech is key to solving the current challenges through the provision of a scalable and sustainable alternative.”
Over the past year, Hohm Energy has experienced a substantial increase in revenue, growing by over five times. Thus far, the company has generated 17,000 custom solar rooftop designs worth $190 million, with over $90 million in finance applications.
Ohlsen said that the software platform and fintech marketplace… “is pivotal in enhancing the efficiency of rooftop solar installations and ultimately mitigating the severity of load-shedding being experienced.”
Following the investment, the company will be launching the Hohm School program, designed to train local solar installers through the Hohm Energy Standard for Solar Systems Installations (HESSSI) across the country.
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