South Africa-based renewable energy startup Sun Exchange has raised $ 3 million to close its Series A funding round for $ 4 million.
The company operates a peer-to-peer, crypto enabled business that allows individuals anywhere in the world to invest in solar infrastructure in Africa.
How does this all work?
“You as a person are selling electricity through a solar panel purchased through the Sun Exchange at a school in South Africa,” explained Abe Cambridge – founder and CEO of the startup.
“Our platform measures the power output of your solar panel. Arrange for the purchase of that electricity with your chosen energy consumer, collect that money and then return it to your Sun Exchange wallet. “
It costs about $ 5 to transact in a South African rand or bitcoin.
Cambridge told TipsClear on a call, “The reason we chose bitcoin is because we need a universal payment system, which limits micro transactions to one million US dollars.”
He co-founded a Cape Town headquartered startup in 2015 to advance renewable energy infrastructure in Africa. “I felt that the opportunity for solar was huge, not only for South Africa, but for the entire African continent,” Cambridge said.
“What was needed was a new mechanism for Africa to get solar power.”
According to the International Energy Agency, large-scale landslides in sub-Saharan Africa have a population of about 1 billion people and only half of them have electricity.
Recently, South Africa, the main market of the Sun Exchange – which boasts some of the best infrastructure in the region – has been suffering from blackouts and power outages.
The Sun Exchange has 17,000 members in 162 countries that, according to company data, have invested in solar power projects for schools, businesses and organizations throughout South Africa.
The $ 3 million – which closed Sun Exchange’s $ 4 million Series A – came from the Africa Renewable Power Fund of London’s ARCH Emerging Markets Partners.
The startup with capital plans to enter new markets. “We are going to expand to other sub-Saharan African countries. We have got some clear opportunities on our roadmap, ”Cambridge said, referring to Nigeria as the markets in which the Sun Exchange has conducted research.
Africa’s top economic and technological hubs such as Kenya and Nigeria have several well-funded solar power startups. In East Africa, M-Copa sells solar hardware kits to households on credit, then M-Pesa allows installment payments via mobile phones using mobile money. The $ 161 million venture is backed by investors including Steve Case and Richard Branson.
In Nigeria, Rensource moved from a residential hardware model to building solar-powered micro utilities for large markets and other commercial structures.
The Sun Exchange serves as an asset-free model and operates in a different way than companies that install or manufacture solar panels.
“We are completely supplier agnostic. We are approached by solar founders who operate on the African continent. And then we partner with the best people, ” said Cambridge — who presented the model of the startup at Berlin’s TipsClear startup Battlefield in 2017.
“We are the marketplace that connects the solar panel user with the owner of the solar panel, the founder of the solar panel.”
According to the Sun Exchange Cambridge, by earning margins on solar panels sales and fees on purchases and kilowatt hours.
In addition to expansion in Africa, the startup’s expansion has been from middle to Latin America and Southeast Asia.
“There are also places that would really benefit from solar power, the speed at which it can be deployed and the environmental improvements going to solar,” Cambridge said.