Joy Agwunobi
Arnergy, a Nigerian startup dedicated to providing clean energy solutions, says it has closed a $3 million funding round led by All On, a venture capital firm focused on scaling off-grid energy access in Africa.
The new funding will be used to expand Arnergy’s reach in Nigeria, enabling the company to provide clean energy solutions to more people and businesses across the country.
This latest investment brings Arnergy’s total funding to date to $12 million, making it one of the best-funded cleantech startups in Nigeria. The company’s first investment round was a $9 million Series A in 2019, which was followed by a series of smaller funding rounds.
Femi Adeyemo, Arnergy’s CEO and co-founder, pointed out that the company’s recent fundraising is not just about raising capital. Rather, it’s about positioning the company for growth in the face of key market trends. These include the removal of fuel subsidies, the approach of grid parity in terms of grid prices, and fluctuations in diesel prices.
According to Adeyemo, since Arnergy’s last fundraising round in 2019, the company has seen a significant increase in demand for solar systems, as more people have come to see them as a viable and cost-effective alternative to traditional sources of power.
“We are now bullish on leases given that cost competitiveness now makes sense. We’ve tested and tried it, and the chance of default is now lower because of the monthly expense of petrol or diesel. You can more or less switch that for solar. It wasn’t the case four years ago where you will be paying higher even if you’re on a five-year lease to own solar,” he said.
Adeyemo also said that Arnergy plans to maintain its service provision across all 36 states in Nigeria through partnerships with mini-grid developers. In addition, the company is preparing to raise its Series B funding round, which is expected to close in the current quarter. The additional capital will enable Arnergy to expand its operations and accelerate the adoption of its renewable energy products and solutions both in Nigeria and beyond.
Caroline Eboumbou, chief executive officer, All On, commended Arnergy’s achievements and the role the company has played in advancing the clean energy sector in Nigeria. She highlighted Arnergy’s innovative approach, commitment to sustainability, and focus on social impact as key factors that align with All On’s mission.
Eboumbou stated that the partnership with Arnergy has helped the company make significant progress toward its goals of empowering communities and creating a cleaner future for Nigeria.
The All On’s CEO expressed confidence that the new investment will enable the company to scale and achieve even greater impact in the future.
“This investment reaffirms our confidence in their ability to scale their operations and accelerate the adoption of clean energy in Nigeria and beyond,” she said.
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