MICROCAPITAL BRIEF: SolarNow Raises $2.5m from Novastar Ventures, Acumen Fund

SolarNow, an Ugandan-based company selling solar electric home systems, recently raised EUR 2 million (USD 2.53 million) by selling equity shares to Novastar Ventures, a Mauritius-based fund investing in new businesses with ‘innovative’ business models in Africa, and Acumen Fund, a New-York based nonprofit venture fund. Neither the individual amounts invested by each fund nor the size of the stakes acquired have been disclosed.

The equity investment is expected to provide liquidity to meet SolarNow’s working capital requirements, expand its distribution network, upgrade its management information system and enable investment in Research and Development. The investment is further expected to help SolarNow expand to other East African markets in the next several years.

SolarNow operates 45 branches from which it has sold 5,500 solar systems since 2011. Financial information on the firm is not available.

As of October 2014, Novastar Ventures had a target size of USD 80 million to invest in companies. The amount from the fund already invested is not available.

As of July 2013, Acumen has raised USD 368 million in follow-on and co-investment capital since its inception in 2001. As of 2012, Acumen had total assets of USD 103 million.

By Simon Pfanner – Research Associate

About SolarNow

SolarNow is an Ugandan company established in 2011, which provides solar electric home systems. Clients of SolarNow can take a loan to be repaid over the course of 18 months to fund their purchases. SolarNow operates 45 branches from which it has sold 5,500 solar systems since 2011. Financial information on the firm is not available.

About Novastar Ventures

Novastar Ventures is a fund that invests in new businesses with ‘innovative’ business models in Africa. It was established in 2013 and is based in Mauritius. The companies that Novastar invests in are led by entrepreneurs aiming to generate adequate returns, while benefiting low-income households. The main sectors Novastar invests in are education, healthcare, small-scale agri-businesses, and access to food and water. As of October 2014, Novastar Ventures had a target size of USD 80 million to invest in companies. The amount from the fund already invested is not available.

About Acumen Fund

Founded in 2001 with seed capital from the Rockefeller Foundation, the Cisco Systems Foundation and individual philanthropists, the Acumen Fund is a nonprofit venture fund based in New York. The organization operates from offices in Accra, Karachi, Mumbai, Nairobi and New York. Acumen raises charitable donations with the aim of investing long-term debt or equity in companies, entrepreneurs and concepts that promote the alleviation of poverty. It advocates the use of entrepreneurial approaches to tackle poverty, focusing on early-stage debt or equity investments in enterprises that provide low-income customers with access to healthcare, water, housing, alternative energy or agricultural inputs. Commitments generally range from USD 300,000 to USD 2.5 million per investee with an expected payback time frame of five to seven years. As of July 2013, Acumen has raised USD 368 million in follow-on and co-investment capital since its inception in 2001. As of 2012, Acumen had total assets of USD 103 million.

Sources and Additional Resources

[1] SolarNow News, SolarNow closes Equity funding with Novastar Ventures & Acumen

MicroCapital, May 26, 2014, Acumen Fund, Adolf H Lundin Charitable Foundation Invest $1.5m in Farmer Information Service Esoko Networks of Ghana to Expand into East Africa

MicroCapital, July 30, 2013, From Blueprint to Scale: The Case for Philanthropy in Impact Investing;” by Harvey Koh, Ashish Karamchandani and Robert Katz; Published by Monitor Group and Acumen Fund

MicroCapital Universe Profile: SolarNow

MicroCapital Universe Profile: Novastar Ventures

MicroCapital Universe Profile: Acumen Fund

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