SolarHome raises $13.7m debt from crowdfunding platforms

SolarHome aims to sell its "electricification-in-a-box" system to 100,000 Myanmar homes by the end of next year. Each box holds a solar panel with a battery that soaks up enough sunlight to power one household's electricity needs for about six hours
SolarHome aims to sell its "electricification-in-a-box" system to 100,000 Myanmar homes by the end of next year. Each box holds a solar panel with a battery that soaks up enough sunlight to power one household's electricity needs for about six hours every night.PHOTO: SOLARHOME

Start-up's unsecured debt comes with interest of less than 9% a year

The Singapore-based start-up SolarHome has turned to debt from crowdfunding platforms to fund its expansion.

The firm, which sells pay-as-you-go solar power systems to households in Myanmar, has raised US$10 million (S$13.7 million) in total unsecured debt that comes with an interest of under 9 per cent a year.

The debt comes from a group of international investors that include Crowdcredit, a cross-border crowdfunding platform based in Japan, and Trine, a Sweden-based crowdfunding platform for off-grid solar.

SolarHome said that the debt comes with a tenure, and varies according to different platforms. The tenure is usually 24 to 36 months.

Chief executive and co-founder Ted Martynov said in a statement on Wednesday that accessing debt finance on such a scale at this stage "has significantly outperformed our expectations".

The latest financing follows on the US$4.2 million in convertible note funding raised this year from international investors, including Trirec, Insitor Impact Asia, Beenext and a group of Singapore-based family offices.

The aim is to sell SolarHome's "electrification-in-a-box" systems to 100,000 homes in Myanmar by the end of next year. SolarHome has already installed close to 28,000 solar home systems in the country since its launch last year.

Chief executive and co-founder Ted Martynov said in a statement on Wednesday that accessing debt finance on such a scale at this stage "has significantly outperformed our expectations".

Households can pick systems with enough juice for lighting and phone-charging purposes, or buy more heavy-duty ones to watch TV. The basic units hold a small solar panel with a battery that soaks up enough sunlight to power a single household's electricity needs - including phone charging - for about six hours every night.

Each basic unit costs about US$40, and users are charged about US$3.70, or 5,000 kyat (S$4.45), per month for up to two years. The system is then transferred to the consumer, the firm said.

The charges translate to two to three days' income - and the price beats paying for candles and kerosene.

SolarHome also goes some way in helping users establish credit histories, which can give access to financial services. The aim is to offer credit scoring to global banks that are reluctant to open their balance sheets to the unbanked population.

The start-up's existing investors include noted Singaporean investor Koh Boon Hwee, who is said to have put some money on the table after a close relative piqued his interest on the investment idea.

The firm was founded by Forum, a Singapore-based fintech venture builder that focuses on emerging Asia.

A version of this article appeared in the print edition of The Straits Times on December 07, 2018, with the headline 'SolarHome raises $13.7m debt from crowdfunding platforms'. Print Edition | Subscribe