Clean energy financing platform Wirewatt has raised a $4 million investment from MGM Innova Capital to fund solar projects in Mexico and Latin America.
The Monterrey, Mexico-based company, founded by brothers Andres Garcia-Galan and Joel Garcia-Galan in 2015, works with a network of more than 1,000 green contractors quoting more than $5 million in projects every month. Wirewatt provides loans to homeowners and small and medium businesses to finance solar, battery and other energy-efficiency improvement projects.
“Right now, with this winter storm, it is more important that we think about that here in Mexico — to be energy independent,” Joel Garcia-Galan, CEO, told Crunchbase News.
Electricity and other utility costs in Mexico remain among the highest in the world, with Mexicans paying, in some cases, nearly 50 percent more for electricity than Americans, driven by reasons, such as low generation capacity and regulatory restrictions. A segment of more than 4.5 million small businesses and homeowners saw an 8.4 percent increase in costs during the global pandemic, according to Garcia-Galan.
Meanwhile, the distributed solar market is poised to grow to $13 billion by 2025, according to banking industry group Asociación de Bancos de México. Though purchasing solar or energy efficiency was expensive for the last five years, solar prices are coming down, making the economics more within reach for that business and homeowner segment, he added.
“Sometimes the end customer, the homeowner or business, cannot pay for the solar project or renovation in cash,” Garcia-Galan said. “The contractor can go to our platform and get a loan in 15 minutes. We pay the contractor as the project goes on, and the customers pay us on a monthly basis.”
Wirewatt has two products: a “buy-now pay-later” 12-month interest free installment product, and an “immediate savings” 10-year lease, which enables most customers to pay for their lease with savings achieved by the solar or energy efficient projects.
The new financing, which brings the company’s total funding raised to date to $5.5 million, is expected to fund more than 1,500 loans and will also accelerate Wirewatt’s efficient refrigeration lending business by providing technical assistance and funding, Garcia-Galan said.
The strategic investment from MGM also places Wirewatt in position to raise an additional $2 million of pre-Series A money to fund its growth, as well as expand into other countries, such as Colombia and Chile, in the next two years, Garcia-Galan said.
Patrick O’Doyle, senior managing director of MGM Innova Capital, said in an interview that in addition to solar, MGM was attracted to Wirewatt because of its financing of energy-efficiency projects like the leasing of efficient refrigerators to replace old refrigerators in a convenience store or a mini-super market.
“Energy efficiency has been a big growth area in many countries in Latin America,” O’Doyle said. “We are particularly excited about battery technology. We have been watching Wirewatt for a few years and see their success in building this market.”