Solar panels practically sold themselves in Europe after the Russian invasion of Ukraine sent electricity prices soaring. Now, as prices have started to fallsolar installers have been seen spending more about marketing to attract customers.
A proven way to get more business has been to offer financing. But small businesses typically don’t have the resources to finance new installations, which cost tens of thousands of euros each, forcing customers to go to the bank. The problem is that many customers switch installers “because on the way to the bank, five other providers contact them,” Jodok Betschart, co-founder and co-CEO of Cloover, told TechCrunch.
For Betschart and its co-founders, Peder Broms and Valentin Gönczy, the answer was not only better project bidding software, but also financing to help small installers provide loans themselves. “In a single conversation, installers get a real-time credit and underwriting decision,” Betschart said.
His Europe-based startup Cloover has developed software that incorporates customer data to assess not only their ability to repay a loan, but also how much money they spend on energy. In many cases, the monthly payment for solar panels will be less than what someone pays for their electricity bill.
“But a bank doesn’t really integrate these energy savings into their models,” Betschart said. “A lot of times, we can allow financing where a normal bank said they couldn’t.”
To underwrite those loans, Cloover recently raised $108.5 million in debt along with a $5.5 million seed round led by Lowercarbon Capital with participation from QED’s 9900 Capital and Fontes, the company exclusively told TechCrunch . The startup will own the loans in a special purpose vehicle that will be funded through senior debt providers and cover a small portion of them through equity, Betschart said.
The company charges installers a transaction fee for each loan they originate and also claims a percentage of each loan payment. When Cloover releases software later this year to allow owners to use their batteries to sell electrons to the grid, it will also receive a cut.
Cloover will use the funds to hire sales and customer success teams to train installers on how to use financing for energy upgrades, Betschart said. The company currently works with about 200 installers, although he added that there are thousands more who could use their service.
Giving small installers access to financing should help accelerate the adoption of climate-friendly technologies, Betschart said.
“85 percent of all renewable energy installations, such as solar energy storage, heat pumps, energy management systems, etc., are carried out by local installers and SMEs,” he said. Large companies already have sophisticated platforms to assess clients’ financial capabilities, he added. “The only way to achieve the energy transition is to offer exactly the same option to SME installers.”