Deals

Clean Power Finance drinks $37M to cure ‘solar hardware hangovers’

Clean Power Finance is trying to be the Bloody Mary of the solar world. Today, the company announced chugging down $37 million to cure “solar hardware hangovers.”

Its mission is to “drive the mass-market adoption of residential solar.”  CPF provides a business-to-business marketplace that connects professionals in the solar industry with people looking to invest in it. The platform also offers white-labeled software-as-a-service tools to create proposals, and drive sales and customer engagement.

The solar sector has had (and caused) some headaches over the past few years. Some companies have struggled to become gain market traction and generate revenue, while other publicly traded companies saw their share value drop as global oversupply and decreased production costs pushed down the price for panels. With people like President Obama and Warren Buffett emphasizing the future of the space (and the impending doom of climate change), the solar industry clearly isn’t going anywhere.  The challenge is to find sustainable business models that make solar technology cost-effective for both businesses and consumers, while also lucrative for the companies behind it.

CPF describes itself as a “familiar enterprise software and financial services company” with a marketplace that is “capital-light, high-scale, and high-margin.” Solar companies provide opportunities for distributed solar financing on the site and CPF connects them with interested investors. It has three sources of revenue- transaction fees for marketing and underwriting services, software licensing fees for the tools, and assets management fees for the people investing in the projects.

“Our investor partners earn favorable returns on stable investments with managed risk,” the company said on the site. “Our solar partners gain access to solar leases power purchase agreements (PPAs) that they can brand and sell to homeowners who want the benefits of solar without the cost and hassle of owning and maintaining a system.”

The marketplace currently has more than 100 solar partners and manages more than $500 million on behalf of its invest partners. It has experienced 325% revenue growth, and thus also provides desirable opportunities for venture capital firms and utility holding companies. Existing investors Google Ventures, Kleiner Perkins Caufield & Byers, Claremont Creek Ventures, and Sand Hill Angels participating in this round, along with new investors Edison International and Hennessey Capital. There are also two more utility holding companies that invested, which do not want to be public at this time.

The fact that utility holding companies are becoming increasingly interested in solar could provide a boost for this market, which at the moment has seen a decline in deal activity. CPF’s platform helps them come into the solar market. With this $37 million, CPF will continue to accelerate development of software products and services.

CPF was founded in 2006 by Match.com founder Gary Kremen. It is based in San Francisco and has raised more than $65 million to date. Read the press release.

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