Renewable energy company, Rensource, on Wednesday announced it has secured $20 million in Series A equity round. This represents the largest ever funding for a Nigerian renewable energy start-up, the company said in a press release.
Since its commercial launch in 2016, the firm has been providing energy and tech-enabled value services to small and medium-sized enterprises. The goal is to address West Africa’s power crisis – starting with Nigeria – by delivering renewable-based decentralized energy, with a primary focus on SMEs.
Nigeria, which is Africa’s most populous country, only has 12 gigawatts of installed grid capacity. Just one in four Nigerians is connected to the national power grid, according to the firm. In contrast, South Africa has 50 gigawatts.
“We believe that simultaneously greening and decentralizing its power infrastructure is the only way to navigate Nigeria out of its current state of energy poverty,” said Ademola Adesina, Founder and CEO of Rensource. “Pursuing this with a focus on the millions of small businesses that drive our economy creates a massive multiplier effect whose benefit accrues to all.”
With the financing, the company plans to expand its presence across Nigeria, it said. Currently, Rensource is active in marketplaces that serve over 30,000 SMEs, operating in seven clusters across six states in Nigeria – Lagos, Kano, Ogun, Ondo, Oyo, and Edo state.
It builds and operates solar hybrid micro utilities – a type of energy services provider that localizes energy generation, distribution, and customer service to each community it serves. Rensource has a target of expanding into 100 markets in the country over the next three years.
The fresh cash injection will also be deployed as investments in additional technology infrastructure beyond energy, as Rensource rolls out new tech-enabled products and services for its merchants.
The startup is entering Nigeria’s nascent offline to online (O2O) space with the launch of its new B2B platform, Spaces O2O, a project created to address the holes in Nigeria’s fragmented supply chain.
Some of the identified gaps in the distribution value chain include lack of access to credit, expensive transportation and warehousing, inaccurate data and limited product availability, underpinned by a highly fragmented and multi-layered value chain. With the new platform, merchants will be able to access services that accelerate their productivity growth.
“Our push into O2O is a natural step that leverages our existing infrastructure to further empower the merchants we serve,” the CEO said, adding that Rensource aims to connect over one million merchants in the next five years.
“Rensource’s goal is to offer solutions to the many challenges faced by SMEs in Nigeria, starting with power and expanding to other value-added services,” said Pardon Makumbe, Co-founder and Managing Partner of CRE Venture Capital, an existing investor in the startup and a leader in the financing round.
“It is a bold and worthwhile undertaking that is creating value for all stakeholders. We are excited to continue this journey with the hyper-competent team at the helm,” Makumbe added. The funding was co-led by the Omidyar Network, with participation from Inspired Evolution, Proparco, EDPR, I&P, Sin Capital, and Yuzura Honda.
Founded by Ademola Adesina and Jussi Savukoski, Rensource is a leading renewable energy and merchant services company revolutionizing energy provision in Africa by building and operating clean energy-based micro utilities for SME clusters in Nigeria.
Rensource has historically worked with a variety of stakeholders to build renewable energy projects across Nigeria. In 2018, the company partnered with the federal government’s Rural Electrification Agency, to develop a project in Kano which resulted in thousands of merchants connecting to Nigeria’s first solar micro utility.