Sun Exchange looking to raise $3m in round led by US digital asset investment fund Alphabit

Blockchain-based solar micro-leasing marketplace Sun Exchange is looking to raise $3-million in equity funding in a round led by the startup’s largest investor, US-based cryptocurrency and digital asset investment fund Alphabit.

Responding to Ventureburn questions last Friday (12 April), Sun Exchange founder and CEO Abe Cambridge (pictured above) said $750 000 had already been committed in the round. It is not clear when the round will be closed.

Cambridge pointed out that as of December 2018, the startup which he founded in 2015, had raised $1.9-million through its Sunex token sale event, as well as from angel investors, seed investors, and tech incubator partners since 2016. Alphabit invested $500 000 in Sun Exchange in September 2018.

Sun Exchange completed its eight solar project last week after it sold 7 344 solar cells in a crowdsale that lasted seven hours

Last week Sun Exchange completed its eighth solar project at Protea Heights Academy in Cape Town. The project saw Sun Exchange sell 7 344 solar cells in a crowdsale in which 112 people from 20 countries spent a total R609 552 on 34 kilowatts of solar cells.

Cambridge said the project was sold out in a record seven hours.

“Our first project in 2016, that was half the size, took us a whole six weeks to sell out, so I think it’s safe to say Sun Exchange has come a long way

“This isn’t only testament to the growth of Sun Exchange, we now have over 6000 members in 126 countries, but it also shows that the world is waking up to the economic, environmental, resilience and social benefits of distributed solar power,” he said.

Cambridge said installation of the cells will be done when the school breaks for the winter holidays. He expects the project to be completed and operational between 7 and 14 days after construction begins.

“Over its 20 year lease period, the solar cells powering Protea Heights Academy will offset an estimated 919 860kg of CO2,” he explained.

He said the startup wants to reach as many schools as it possibly can as schools can “deeply benefit” from the opportunity to reduce their energy costs and model climate leadership and innovation to young people.

Sun Exchange, he stated, will run a similar project with Wynberg Boys’ High School next. “We’ll be running their crowd sale very soon. We’re in advanced discussions with another six schools but can’t disclose any additional details on those yet,” said Cambridge.

The startup’s first project was for The Stellenbosch Waldorf School in 2016, last year Sun Exchange ran a solar project for Sacred Heart College in Johannesburg.

How projects are selected

Cambridge explained that projects hosted on the Sun Exchange marketplace undergo a technical, economic and social as well as environmental review by a team of solar engineers who he said apply industry standard due diligence methodologies.

This review process, he said, gives the startup and its members confidence that projects on its marketplace will operate reliably and generate long term value.

“As part of the due diligence process, the company also reviews each offtaker’s historical financial performance and makes an independent assessment of its potential to meet financial obligations under the solar lease contract terms,” he explained.

‘Aiming for $2.5m revenue’

Cambridge said last year Sun Exchange’s sales revenue exceeded $800 000. In contrast, the startup’s revenue the previous year was as he put it “just shy” of $40 000. “So that is a 20x increase. Our goal for 2019 is $2.5-million,” he said. The startup currently employs a staff complement of 14 employees.

The startup plans to breakeven in the next one to two years.

“Having profit margins exceed our operating costs which is achieved once we hit the three megawatts of installed capacity, a target we are well on our way to achieving and is what our seed investment round will get us to,”said Cambridge.

He explained that Sun Exchange intends to expand outside of South Africa with upcoming launches of solar projects in Kenya and Moldova in the next six months. In addition, the startup also wants to partner with an additional equity investment partner that will bring both operating capital as well access to solar projects.

“The goal for the next five years is to capture 10% of the African market share to generate more than $60-million revenue

“We also aim to enter the emerging markets of India, Eastern Europe, South East Asia and Latin America to compound growth and establish Sun Exchange as the global platform for solar panel ownership,” he added.

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Featured image: Sun Exchange founder and CEO Abe Cambridge (The Sun Exchange via Twitter)