Solar energy has continued to attract huge sums of investment across Africa, as the continent pushes to bridge its electricity gaps. Oolu, a Senegalese-based solar energy startup has raised $8.5 million in Series B equity investment.
The round was led by independent renewable energy developer, RP Global, backed by other investors including Persistent Energy Capital (PEC), Shell-seeded impact investor All ON, Gaia Impact Fund and DPI Energy Ventures.
Co-founder and CEO of Oolu, Daniel Rosa said the investment round at a time of pandemic like this shows that the company is offering value in its products.
“The strength of our business and industry during a challenging global pandemic has demonstrated the value that customers see in our products and service. RP Global’s financial expertise and experience in managing renewable energy business will enable us to accelerate our growth.
“All On’s unparalleled knowledge of the renewable energy sector in Nigeria will help us to further adapt our business to meet customers’ needs. In addition, we are excited to continue our successful collaboration with investors especially persistent,” he said.
The round is part of culminating funding that started in 2017 with a $3.2 million Series A investment led by PEC. Oolu was founded in 2015 by Daniel Rosa and Nilmi Senaratna to provide affordable electricity for the underserved using a pay-as-you-go business model. It attracted US seed-stage accelerator, Y Combinator who invested its $150,000 seed money in the startup while it was in the former’s 2015 Summer batch.
There was also an undisclosed investment made in the startup by GAIA Impact Fund, a Francophone-focused venture fund specializing in clean energy in 2018.
Techpoint noted that it was geared toward the Series B round which was expected to close in 2019, but was prolonged to 2020 for unknown reasons. So far, Oolu Solar has raised a total of $11.7 million.
West Africa has a staggering number of over 150 million people who lack access to electricity, and the global shift to cleaner energy has made the region a huge market for solar energy companies. While there has also been an increase in solar energy activity in East Africa, companies in Francophone West Africa have been drawing promising investments with the aim of securing a large market share in the emerging market.
The underserved scattered across rural areas of the market have been won over by the pay-as-you-go model that makes the energy supply affordable. Oolu said it has gained a large market share in the villages using the affordable business plan. According to the startup, over 60,000 solar systems have been installed at homes in its six markets since it was launched.
RP Global Africa disclosed that the recent investment will enable it to expand to non-Francophone West Africa, following the existing trajectory.
“We are looking forward to working with the most promising solar home systems provider in West Africa. Having found a partner with such an efficient structure and excellent management makes us optimistic that this will be our greatest venture in Africa to date” Leo Schiefermuller, Director of RP Global Africa said.
A report from business consultancy Kleos Advisory notes that over 600 million people, or one in two, in Africa still lack access to grid-powered electricity. The report said that over 5 million pay-as-you-go home solar systems have been sold in the continent but there is still a potential $24 billion market per year for off-grid solar systems.
“Given the ability of solar-fintech solutions to deliver power to African households along with affordable financing to pay for it, solar could be the breakthrough technology that finally connects Africa’s vast off-grid communities,” the report said, adding that the combination of solar and fintech is driving an economic transformation in Africa.
With untapped $24 billion off-grid market value, Africa has become a lucrative destination for solar investors, and startups like Oolu are stepping forward for the gain.