Sydney-based home energy-funding platform Brighte intends to hire new staff and increase its foothold in Australia, after completing a $4 million Series A funding round led by Atlassian co-founder Mike Cannon-Brookes.
The startup, which was last year named an ’emerging star’ of the fintech sector, offers on-the-spot financing and zero-interest payments for customers looking to install solar panels and batteries in their home, in a bid to make renewable energy more affordable for Australian families.
Brighte founder Katherine McConnell left her job as senior manager at Macquarie Bank in 2015 to found the startup, after being inspired to help consumers “cut energy bills dramatically” and change the solar power and battery industry in a way that “benefits a range of vendors”, from the retailers and merchants to the customer.
“Those [solar and battery] merchants have been looking for fast, easy, affordable finance options; our mobile app offers customer payments plans on the spot, and in a matter of minutes takes a finance application and gets an instant credit outcome,” McConnell tells StartupSmart.
“For families in Australia it just makes sense … it cuts energy bills dramatically. We’re creating our own energy and storing it. It’s great to be able to live a sustainable life.”
The startup previously raised $3.5 million in seed funding in September last year from high net-worth investors, after which McConnell met Jeremy Kwong-Law, an analyst at the investment fund established by Mike Cannon-Brookes, Grok Ventures.
While Brighte’s seed round had already closed and there was “no opportunity to get involved at that stage”, McConnell took this time to meet with the fund to understand its objectives. Luckily, “Mike’s passion for clean energy” meant there was a clear alignment between the two, she says.
“There was a great alignment between what Grok was trying to achieve, in terms of investing in businesses of tomorrow, [and Brighte’s offerings]” McConnell says.
In December 2016 the fund had committed to investing in Brighte’s debt issuance which further “enhanced the relationship”, according to McConnell, and led to this $4 million funding round. Existing shareholders also contributed to the round, including former Radio Rentals chief executive John Hughes.
The funds will be used to further develop Brighte’s technological platform to “reduce friction” and make it easier for vendors to use the software, McConnell says. The startup is also looking to grow its team to 25 staff members across Australia and nine in Manila, a rapid increase from the eight team members the startup had after its first year.
Brighte launched its financing offerings to homeowners in October last year, and McConnell hopes to achieve $100 million in annual sales within two years, adding that if current growth rates are sustained, “that will be achieved a lot sooner.”
“Our month on month [consumer loans] growth rate is 49%. With that type of growth rate and strong endorsement from consumers and vendors, we will see it [$100 million in sales] realised in less than two years,” she says.
McConnell says Brighte is “100% focused on Australia” for the time being, but says that she would be “open to [expansion] opportunities down the track, particularly in Asia”.
Securing strategic investors
For McConnell, securing investment from one of the biggest names in tech came down to one important factor: patience.
“I think its important to develop a relationship,” she says.
“It’s been a year from the point where I first met Grok Ventures to when we documented and accepted these funds.”
While for many founders “when you start off you just need money”, McConnell encourages startups to think strategically about “who is the best fit to help you grow” rather than accepting funding from every interested party.
“When you’re a startup everything moves really fast but you need to think longer term about strategic alignments that will help best advance your business,” she advises.
Startups leading the way for a greener future
There has been a flurry of activity from startups in the energy sector in recent weeks, with the likes of Thinxtra, Wattwatchers and Power Ledger all completed multimillion-dollar funding rounds, yet this hasn’t necessarily meant that competition in the space has increased.
In fact, McConnell has found these new arrivals in the market are interested in collaboration.
“I have lots of different friends that I’ve met over the years that are [founding] startups focused on energy, alternatives to smart metering, allowing renters access to solar,” says McConnell.
“We all really look at how we can leverage off each other.
“It’s quite collaborative, we discuss how we can drive leads; even startups you think might be a competitor have been really supportive,” she says.
With the debate over rising energy prices still raging, McConnell observes the increased startup presence in the traditionally incumbent-dominated energy space is “driven by consumer demand” for better, more sustainable energy offerings.
“When people start a startup they look at the market opportunity — there’s an obvious opportunity for consumers whose energy bills keep increasing,” she says.
McConnell believes the future of Australia’s energy is a “really big story” that has captured national interest, and the energy sector is “a great one to tackle because there are some really obvious ways you can look to create change”.
“With the blackout in South Australia, energy companies and the government are looking at decisions around investment in energy for future generations. People in this time are looking at more altruistic approaches to life, how to make the world a better place for yourself and your children,” she says.