Mumbai-based solartech company Aerem has managed to raise $15 million in a new funding round to enhance its mission to bring about full-service solar financing solutions. The round was led by SMBC Asia Rising Fund, the venture capital division of Sumitomo Mitsui Banking Corporation. This massive capital injection will represent a turning point in the company since it aims to overcome the barriers to the uptake of solar energy among micro, small, and medium enterprises in India due to financial constraints.
The primary focus of this investment is to improve the current technology platform of Aerem and increase its penetration in the Indian market. The new capital will enable the startup to simplify the credit approval procedure for companies considering switching to solar energy.
Aerem is an intermediary between financial bodies and companies so that the change towards renewable energy can be not only environmentally friendly but also economically feasible to smaller businesses that can’t always afford installation expenses and have difficulties with obtaining borrowed funds.
One of the primary elements of the Aerem business model is its commitment to the MSME sector. SMEs are the support of the Indian economy, yet can be very problematic in terms of the cost management of operation with electricity bills being one of the highest costs.
The solutions by Aerem will assist these enterprises in utilizing the potential of solar energy, which can potentially save them a significant percentage of their electricity bill. Through personalized financing solutions, the company is transforming MSMEs into rooftop solar projects by making them affordable.
The startup will operate on the strategy of establishing a continual ecosystem that will join different stakeholders, such as engineering, procurement, and construction companies, and financial institutions. By incorporating these players on one platform, Aerem will guarantee that businesses have an end-to-end solution not only in terms of initial technical evaluation and installation but also in terms of overall financing and commissioning of the solar assets. This integrative approach lessens the friction that is normally related to large-scale renewable energy projects.
Aerem has now acquired a new $15 million fund and is set to expand its operations by a large margin. Some of the funds will be used to enhance the proprietary technology of the company, which uses data-driven information to determine the creditworthiness of a potential borrower and the technical viability of solar installations. This technological advantage enables Aerem to provide competitive interest rates and flexible repayment conditions, so the solar adoption may seem to be an appealing offer to business owners.
The growth strategy will involve the expansion of the company into different geographical locations within India. The potential market in Tier II and Tier III cities is huge as the government drives more towards higher renewable energy goals. Aerem will utilize its resources to establish a more robust ground presence in these regions with the help of local installers and distributors so that the best solar technology is available to even the most remote group of industries.
The funding round will be timed with the climate finance achieving unprecedented momentum around the world and in India. Investors are seeking scalable business models that will help decarbonise the economy. The Aerem emphasis on solar financing is in line with the national objective in terms of renewable power capacity. The company is playing a significant role in ensuring that India is on the right path towards its green energy milestones by enabling the movement of capital into rooftop solar projects.
The role of fintech can also be discussed as a shifting one in the climate space, which is emphasized by this investment. Aerem is proving that large-scale behavioral changes in energy consumption can be triggered with the help of highly specific financial products such as solar lending, which is a niche but essential vertical. This flexibility in offering debt and lease-based financing opportunities provides businesses with the opportunity to select a model that best suits their cash flow needs, eliminating the so-called sticker shock that many green energy transitions feature.
The fact that Aerem has successfully raised $15 million in a funding round is a testament to the feasibility and the need for specialized funding of solar in the current economy. The startup is addressing the barriers to solar adoption by paying attention to the special needs of MSMEs and creating a solid ecosystem of partners. The company is poised to be a direct stakeholder in the transformation of India to be more sustainable and energy-dependent as it carries on its innovation and expansion.