Bill Gates-backed Arnergy to expand solar access in Nigeria with $18M as demand surges

Summary

Demand for solar energy in power-starved Nigeria has soared in the last decade thanks to worsening grid reliability and rising fuel costs. That’s drawn investor interest to Arnergy, a cleantech startup meeting that need. The company just raised a $15 million Series B extension (on top of a $3 million B1 round last year), bringing its total for the round to $18 million. That surge in demand for solar systems follows significant policy shifts, most notably the removal of Nigeria’s decades-old fuel subsidy in May 2023 (the government’s decision—long debated—ended its practice of covering the gap between global and local fuel prices). Since then, petrol prices have jumped nearly 500%, making power generators, once seen as the more affordable alternative to unreliable grid power and solar systems despite environmental hazards, far costlier to run. Arnergy’s pitch has changed with the times. “When we started the business, we used to position solar as a way to get uninterrupted power, not necessarily to save money. It wasn’t part of a commercial conversation,” founder and CEO Femi Adeyemo told TechCrunch. “Now it is, because we can clearly show customers how our systems save them monthly whether using petrol, diesel, or even the grid.” Adeyemo launched Arnergy in 2013 to provide solar systems to homes and businesses across sectors like hospitality, education, finance, agriculture, and healthcare. What began as a resilience play is now a cost-savings strategy changing the economics of adoption for the cleantech backed by Bill Gates’s Breakthrough Energy Ventures (the firm led Arnergy’s $9 million Series A in 2019.) Lease-to-own increasing adoption That adoption is clearest in the company’s lease-to-own product, Z Lite, which became a core focus following Arnergy’s first Series B tranche last year. While outright purchases comprised 60% to 70% of revenue in 2023, they accounted for just 25% of sales last year. On the other hand, lease-to-own, where customers pay fixed monthl...