In a significant move to combat South Africa’s escalating energy crisis, Hohm Energy, a three-year-old clean tech startup, has successfully raised $8 million in seed investment. The funding, led by E3 Capital and 4DX Ventures, marks the largest seed round for a tech startup in South Africa, according to Hohm Energy.
Amidst severe power shortages exceeding 6,000 megawatts, state-owned power generator Eskom has emphasized the urgency of implementing daily electricity rationing to prevent a nationwide grid collapse. The energy crisis is not unique to South Africa, as many African countries face similar challenges, fostering a growing demand for innovative solutions.
Hohm Energy positions itself as a crucial player in this landscape by connecting homeowners and businesses with accredited solar installers, product suppliers, and embedded solar finance. The startup’s model, which integrates software and marketplace functionalities, aims to provide an alternative and sustainable energy source for over 7 million households connected to South Africa’s national grid.
Founded in 2021 by Tim Ohlsen and Emir Gluhbegovic, Hohm Energy streamlines the rooftop solar market value chain, offering design, scheduling, and procurement services for installers while enhancing accessibility for buyers.
CEO Tim Ohlsen highlighted the challenges homeowners face in navigating the complex solar industry. “Purchasing a solar system can inevitably be a very costly investment. Our average order value ranges between $8,000 [and] $12,000,” said Ohlsen. The startup addresses this challenge by matching users with trusted solar installers through extensive research and a unique feature called “Home Ranger,” which supervises each installation to ensure technical and legal compliance.
Hohm Energy’s platform not only empowers customers to harness clean, renewable energy but also provides solar installers with tools and workflows to streamline their processes. The startup aims to reduce friction for all stakeholders involved and unlock new growth potential in the solar industry.
Before founding Hohm Energy, Tim Ohlsen faced scalability challenges with a vertically integrated solar service provider model. In response, Hohm Energy adopted an asset-light approach, focusing on software automation to reduce friction and connect stakeholders more efficiently.
The startup has achieved significant milestones, including generating over 17,000 tailored solar rooftop designs valued at $190 million and facilitating over $90 million in finance applications to retail banking partners. Hohm Energy has witnessed a 4x to 5x increase in GMV (gross merchandise value) and revenue since its launch.
While acknowledging the scalability of its model to other markets facing similar energy challenges, Hohm Energy remains committed to deepening its presence in South Africa. With the recent funding, the startup aims to attain sustainable profitability, strengthen its climate fintech strategy, enhance its technology, and launch a program to train local solar installers.
Vladimir Dugin, senior partner at E3 Capital, expressed excitement about the investment, stating, “With its tech-driven approach, Hohm is at the forefront of South Africa’s green energy revolution.” The startup’s unique position as a software-first business and marketplace sets it apart in the country’s landscape.
As South Africa grapples with ongoing power disruptions, Hohm Energy’s innovative solutions could play a pivotal role in shaping the future of sustainable energy in the region.