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Solar power startup SolarHome raises US$10m debt from crowdfunding, investors

SINGAPORE-BASED startup SolarHome – which sells pay-as-you-go solar power systems to households in Myanmar – has turned to debt from crowdfunding platforms to fund its expansion.

It told The Business Times it has raised US$10 million in total in unsecured debt that comes with an interest of under 9 per cent per annum.

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 told BT that the loans come with a tenure that usually varies between 24 and 36 months, said its spokesman.

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The latest financing follows on the US$4.2 million in convertible note funding raised in 2018 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 end of next year. As it is, SolarHome has already installed close to 28,000 solar home systems in Myanmar since its launch in 2017. (see amendment note)

Households can pick systems with enough juice for lighting and phone charging purposes, or purchase more heavy-duty systems to watch programmes on a TV set. 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 the users are charged about US$3.70 per month, or 5,000 kyat, for up to two years, following which the system is transferred to the consumer, the startup told BT in an interview this year. The charges translate to two to three days of income – and the price beats paying for candles and kerosene.

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

In a press statement, Ted Martynov, chief executive officer and co-founder of SolarHome, said accessing debt finance on such a scale at this stage “has significantly outperformed our expectations”.

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

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

Amendment note: The article has been corrected to say that SolarHome intends to sell its “electrification-in-a-box” systems to 100,000 homes in Myanmar by end of next year, and not this year.