In the midst of South Africa’s deepening energy crisis, the threat of a nationwide power grid collapse looms as a real possibility. With crippling power shortages becoming a regular occurrence, implementing daily electricity rationing has become a critical measure to prevent a disastrous outcome. The country’s largest power supplier, state-owned Eskom, has reported a significant deficit of over 6,000 megawatts at times, further exacerbating the issue.
This energy crisis is not unique to South Africa, as many other African nations are facing similar challenges. This has led to a surge in demand for solutions offered by clean technology startups across the continent. In the most recent development, Hohm Energy, a three-year-old company based in South Africa, has secured a staggering $8 million in seed funding.
According to Hohm Energy, this is the largest round of funding secured by a tech startup in South Africa. The investment was led by E3 Capital and 4DX Ventures, with participation from notable firms such as Breega, E4E Africa, and Climate Capital Ventures.
Hohm Energy’s platform connects homeowners and businesses with accredited solar installers, product suppliers, and embedded solar finance options. The company aims to provide an alternative and sustainable energy source for over 7 million households currently connected to the national grid in South Africa. Founded in 2021 by Tim Ohlsen and Emir Gluhbegovic, Hohm Energy operates a software and marketplace model that streamlines the entire process of installing rooftop solar systems, making it more accessible for buyers and more efficient for installers.
In an interview with TechCrunch, CEO Tim Ohlsen stated, “Our goal is to empower homeowners and businesses to harness clean, renewable energy, despite the complexities and technicalities of the industry. By using our platform, customers can confidently make this costly investment without having to navigate the intricacies of the market.”
One of the standout features of Hohm Energy’s platform is the “Home Ranger” feature. This provides each installation with a dedicated supervisor who ensures compliance with technical and legal standards, giving customers peace of mind knowing their solar system is being expertly installed and managed.
Essentially, Hohm Energy offers a complete solution for solar installers, handling every aspect of the project from design and management to financing and procurement. At the same time, customers have access to a digital platform that assesses their property’s solar needs and offers credit financing options. Hohm Energy also facilitates the entire fulfillment process, including post-sales services such as repairs and maintenance.
Ohlsen explained, “By working closely with our trusted solar partners and providing them with cutting-edge SaaS tools and workflows, we are able to streamline the entire process and reduce friction for all parties involved. This ultimately unlocks new growth potential for the solar industry.”
Before founding Hohm Energy, Ohlsen previously ran a digital utility and solar installation company in South Africa. However, the vertical integration model proved to be challenging to scale across the continent due to the intensive labor and resources it required. To overcome these limitations, Hohm Energy was built as a platform-based, asset-light business that leverages software to automate processes and connect stakeholders.
Hohm Energy’s initial process involved customers using the platform’s software to design their solar system and select components. This was followed by a consultation with an energy advisor and the presentation of a final engineering proposal to the company’s banking partners for financing approval. However, redirecting customers to third-party portals with retail banks often resulted in friction and drop-offs. To combat this, Hohm Energy has partnered with some of South Africa’s top retail financial institutions, giving their customers access to three structured financing options.
So far, Hohm Energy has created over 17,000 customized solar rooftop designs with an estimated value of $190 million. Additionally, they have facilitated over $90 million in finance applications to their retail banking partners. CEO Ohlsen shared that since their launch, the company has experienced a 4x to 5x increase in gross merchandise value and revenue.
“The uniqueness of Hohm Energy in the South African market lies in our comprehensive approach to helping customers purchase solar systems. By working with banking partners, we offer our customers the most streamlined and efficient process possible. We are also the only software-first business and marketplace in the country, making us stand out in the industry,” commented Ohlsen on the company’s unique position.
Ohlsen also acknowledged the scalability of their software and marketplace model to other markets in Africa and emerging economies facing similar energy challenges. However, the company’s main focus is to deepen their presence in South Africa, especially due to the ongoing power crisis. With the latest funding, Hohm Energy aims to achieve sustainable profitability this year and expand their climate fintech strategy, enhance their technology, and launch a program to train local solar installers.
“We are incredibly excited to announce our inaugural investment in Hohm Energy. Being at the forefront of South Africa’s green energy revolution with their tech-driven approach, the company is uniquely positioned to become the go-to destination for all sustainable energy solutions for residential customers,” said Vladimir Dugin, senior partner at E3 Capital, expressing his excitement about the investment.
