SolarNow, a Kampala-based solar asset finance company which supplies modular 50-500 Watt solar home systems to rural farmers has closed raised €2 million ($2.6 million) from Novastar Ventures and Acumen to help the firm expand its branch network, further upgrade its Management Information System (MIS), and invest in R&D.
Mauritius-based Novastar Ventures and US-based Acumen have invested €2,000,000, based on what they believe to be a great opportunity for scale into the region and product diversification. The funds investments lay groundwork for scaling renewable energy asset finance and distribution in East Africa and are expected to help meet massive demand for high-quality solar technology in East Africa.
SolarNow will be taking on similar but slightly different services such as Kenya’s M-KOPA Solar which issues basic home solar systems on credit allowing rural users to pay via Safaricom’s M-PESA mobile money and KaribuSolar and SolarKiosk among others. Comparing the two, M-KOPA Solar is bigger as it has sold over 100,000 units than SolarNow which has to date sold 5,500 solar systems.
In a statement, Willem Nolens, CEO of SolarNow, says that with this investment, SolarNow will focus on fulfilling the growing demands of its existing clients, expand to under-served areas of the country, and prepare for expansion into other East African markets in the medium term.
“Our business has high working capital demands. The more we sell the more money we need. We are buying the best components and selling them to low-income customers, with just a 20 percent deposit payment.”
SolarNow is not just a solar product company or a pay-as-you-go service provider but an asset finance and distribution company with a focus on renewable energy. Bringing together affordability and distribution with great products.
Andrew Carruthers of Novastar Ventures said: “We are impressed by SolarNow’s well-developed distribution network as well as the quality of equipment and service they provide. They raise the bar for low-income customers in terms of affordability, reliability and service guarantees. We look forward to working with them to scale rapidly into this poorly served market.
SolarNow has 45 branches in Uganda and runs under a franchise model seling a modular range of solar PV systems and appliances under an in house credit facility.
In February 2013, Invested Development, an emerging markets-focused social impact investment firm invested in the Dutch social enterprise to establish a strong distribution network.