Arnergy, a Nigerian cleantech startup, has raised a $3 million bridge round that came from All On, a Shell-backed off-grid energy impact investment company.
Founded in 2013 by Femi Adeyemo and Kunle Odebunmi, Arnergy is a distributed utility leveraging the Internet of Things (IoT) to provide reliable solar power for businesses in emerging markets
Femi Adeyemo, founder and CEO of Arnergy said: “I think one of the things that has been very important to Arnergy has been capital efficiency. We didn’t just want to raise for raising sake. We were waiting for some triggers like the removal of fuel subsidies, closeness to grid parity based on the grid price and diesel prices to go back into the market. So the combination of all of those more or less gave us signals based on triggers we set when we last raised money.”
This shift in market dynamics prompted Arnergy to raise new funding for scaling up operations and change its sales approach. Since its inception, the company has derived 75% of its business from outright sales rather than leases. Adeyemo explains that many customers found long-term leases, where pricing is amortized over a period, more expensive than petrol or diesel generators. However, with the significant increase in diesel prices, up to 5x higher, long-term leases now make more economic sense than they did in the past.
“We are now bullish on leases given that cost competitiveness now makes sense. We’ve tested and tried it, and the chance of default is now lower because of the monthly expense of petrol or diesel. You can more or less switch that for solar. It wasn’t the case four years ago where you will be paying higher even if you’re on a five-year lease to own solar.”
Caroline Eboumbou, All On CEO said: “We are proud of our partnership with Arnergy over the past years. With this partnership, we have achieved some of our goals to empower communities and create a cleaner future for Nigeria.
“Arnergy exemplifies the impact we strive to achieve at All On, innovative solutions, unwavering commitment to sustainability, and a relentless focus on social impact. This investment reaffirms our confidence in their ability to scale their operations and accelerate the adoption of clean energy in Nigeria and beyond.”
