Arnergy, a Nigerian startup specializing in clean tech solutions, has successfully garnered $3 million funding from All On – an investment company focusing on off-grid energy impact. This funding aims at enable Arnergy to scale up its operations and speed up the broader adoption of its services.
This financial boost comes on the heels of Arnergy’s prior successful Series A funding round in 2019, where the firm raised $9 million courtesy of All On, Breakthrough Energy Ventures, ElectriFI, and Norfund.
Currently, Arnergy is geared towards another fundraising effort, specifically pertaining to its Series B round. This round is expected to close within the current quarter and its proceeds are earmarked for operational expansion and enhancing the uptake of Arnergy’s renewable energy products and solutions.
Founded in 2013 by Femi Adeyemo and Kunle Odebunmi, Arnergy specializes in the provision of distributed renewable energy services and products adapted for homes and businesses. The enterprise primarily targets Nigeria as its chief market and plans to remain consistent in supplying services across all of Nigeria’s 36 states, effectively doing so through mini-grid developers.
Arnergy takes pride in having already installed over 2 MW of electricity, benefiting over 2,000 customers. In 2019, the firm successfully secured $4 million in the form of debt financing from both local and international lenders, featuring Nigeria’s own Bank of Industry among them. Furthermore, Arnergy engraved its name on Bill Gates’s Breakthrough Energy Ventures Top 5 Cleantech list in 2021, showcasing its commitment and innovation in the sector.
In a recent interview, Arnergy’s CEO, Adeyemo, revealed that the company’s focus extends beyond merely raising capital; they also anticipate certain triggers, such as the abolition of fuel subsidies, achieving grid parity based on grid and diesel prices. This caution in financial moves reflects Arnergy’s emphasis on capital efficiency, with their last fundraise occurring in 2019.
Adeyemo further disclosed that the perception towards solar systems among Nigerians has significantly shifted since 2019. Initially, many Nigerians did not view these systems as economically feasible. However, demand for these systems has surged, indicating a changing attitude towards renewable energy solutions in the country.
In addition, Adeyemo mentioned that while the global prices of solar panels and lithium batteries have decreased, their costs would have been notably lower in Nigeria if not for the effects of foreign exchange rate fluctuations. Recently, the country has experienced an increased instability in foreign exchange, with the Naira now standing at over ₦1500 against $1.
Arnergy, which has predominantly practiced outright sales, accounting for about 75% of their operations since its origin, disclosed they are currently more interested in leases.
Alternatives are emerging due to Nigeria’s unpredictable power grid situation, with power output plummeting to 93.5% in late 2023, resulting in a blackout. Considering off-grid solutions, Nigeria led the pack in solar sales in the second quarter of 2022, contributing to 78% of all sales across West Africa. The sales of solar products in Nigeria witnessed a substantial 450% growth between 2017 and 2022.
