Nigerian cleantech startup Arnergy secures $3 million to accelerate its adoption. This very news is following the $9 million Series A round raised by the company back in 2019 from All On, Breakthrough Energy Ventures, NorFund, and ElectriFI.
The firm is also preparing itself to raise funds in its Series B round, which is expected to close this very quarter, in a bid to expand operations and to also increase the adoption of its renewable energy products and solutions.
Nigerian Startup Arnergy Secures $3 Million
Founded in 2013 by Femi Adeyemo and Kunle Odebunmi, Arnergy specializes in distributed renewable energy products and services tailored for businesses and homes. Operating primarily in Nigeria, the startup aims to continue serving customers across all 36 states through partnerships with mini-grid developers.
Arnergy has a track record of installing over 2 MW of electricity for more than 2,000 customers. In 2019, it secured $4 million in debt financing from both local and foreign lenders, including Nigeria’s Bank of Industry. Notably, Arnergy was recognized on Bill Gates’s Breakthrough Energy Ventures Top 5 Cleantech list in 2021.
Arnergy’s Focus Extends Beyond Fundraising
In a recent interview, CEO Femi Adeyemo emphasized that Arnergy’s focus extends beyond fundraising. The company is strategically waiting for specific triggers, such as the elimination of fuel subsidies and approaching grid parity based on electricity prices and diesel costs. The last fundraising round for Arnergy occurred in 2019, highlighting the company’s commitment to capital efficiency.
Adeyemo highlighted the increased demand for solar systems since 2019, a period when many Nigerians did not view them as economically viable. Despite global reductions in solar panel and lithium battery prices, Nigeria’s exchange rate fluctuations have somewhat mitigated the cost benefits. The recent surge in foreign exchange fluctuations, with the Naira exceeding ₦1500 per $1, has particularly impacted local markets.
Arnergy Favoring Outright Sales over Leases
Arnergy, which has historically favored outright sales over leases, is currently bullish on lease agreements. Nigeria’s unreliable grid infrastructure, exemplified by a late 2023 blackout that caused power output to plummet to 93.5%, is driving interest in off-grid alternatives.
In Q2 2022, Nigeria recorded the highest solar sales in West Africa, representing 78% of all sales. Furthermore, Nigeria experienced a remarkable 450% increase in solar product sales between 2017 and 2022, reflecting a growing trend towards renewable energy adoption.
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