Spanish solar energy startup SolarMente has raised €50m in debt and equity as part of a special purpose vehicle (SPV) to scale its solar panel subscription service for homes. The round was raised entirely from energy-focused Barcelona private equity firm GNE Finance and was mostly debt, according to founder and CEO Wouter Draijer, who declined to give an exact breakdown.
Y Combinator alum SolarMente joins a wave of European startups looking to ride the solar energy surge as the world looks to transition to cleaner energy sources. “We’re at the beginning of a solar revolution,” says Draijer.
SolarMente is one of a number of increasingly well-funded European startups that have cottoned onto the opportunity in the past couple of years. The sector was one of the few in European tech that raised more in 2022 than it did the previous year, picking up $2bn, according to Dealroom.
Just last month, Sunhero, another residential solar energy startup targeting the Spanish market, picked up €10m, while France’s Effy — which sells energy-saving solutions including solar panels — raised $22m from Felix Capital and Estonian solar roof startup Roofit.solar raised €6.5m. The biggest raise in 2023 has been Berlin-based Enpal’s €215m Series D in January.
SolarMente sells solar energy systems — including solar panels, energy storage, electric vehicle (EV) charging and heat pumps — to private homeowners. Solar panels currently make up 80% of its sales, with EV charging points and heat pumps the remaining 20%.
The entire €50m raise will be used to scale the subscription side of the business, which currently makes up half of SolarMente’s revenue. The subscription costs €40 a month for a 20-year subscription, and if someone stops being able to pay SolarMente sells the electricity their panels create to the national grid.
The other half of SolarMente’s revenue comes from selling solar panels outright, which cost the consumer about €10k for a full installation. By the end of 2023, 80% of revenue will come from subscriptions; eventually SolarMente wants to shift entirely to subscription sales.
The majority of consumers think twice before shelling out thousands on solar panels and taking years to accrue savings can put some people off, says Draijer. “Our model means that [consumers] don’t need to even think about whether or not it makes sense because it makes sense from the first day.”
SolarMente is currently installing 80 solar energy systems a month in Spain — the only market it’s currently active in and one of the fastest-growing solar markets in the world. It hopes to hit 400 installations a month in the country by the end of 2023.
Draijer says the startup will expand to Portugal in the next 12 months, and has its sights set on Italy and France a little further down the line. SolarMente hit profitability last month and is also planning on raising a Series A round in the next few months.