Solar Financing Startup Aerem Bags INR 100 Cr

Aerem, which offers financing for solar projects, has secured INR 100 Cr (around $12 Mn) in a Series A funding round led by Japan’s University of Tokyo Edge Capital Partners.

The round also saw participation from British International Investment, SE Ventures and Riverwalk Holdings, along with existing investors Blume Ventures and Avaana Capital.

The startup said it also raised a debt from IDFC, AU Small Finance, Axis Bank, Northern Arc, MAS Financials and Vivriti Capital.

Aerem plans to use the fresh capital to boost its presence in the existing markets, expand lending portfolio and further build tech stack for the solar marketplace.

Founded in 2021 by Anand Jain and Vikesh Agrawal, Aerem provides loans to businesses and homeowners for solar installations and also caters to solar equipment, engineering and procurement (EPC) companies with supply chain financing solutions via its NBFC arm NetZero Finance.

Apart from that, the Mumbai-based startup also has a B2B marketplace for solar equipment called SunStore which offers competitive pricing to its customers.

The latest funding also comes nearly two years after the startup raised $5 Mn in its Pre-Series A funding round led by Avaana Capital.

According to Tofler, Aerem’s consolidated revenue from operations jumped almost 100x to INR 175 Cr in the financial year ending March 31, 2024 (FY24) from INR 1.84 Cr in the previous fiscal year. However, its net loss increased 26% to INR 3.57 Cr for the period in review from INR 2.82 Cr in FY23.

With various Centre-led initiatives namely Solar Park Scheme, Grid Connected Solar Rooftop Scheme and Bundling Scheme among others, the Indian solar equipment sector has received a huge push. As of 2023, India was the 5th largest country globally in terms of deployment of solar equipment with a capacity of 70.10 Gw.

According to research, the solar energy market in India is expected to be valued at $50.4 Bn by 2031 growing at a CAGR of 22%.

Despite a push from the government, investors have been bearish on the Indian cleantech sector with declining funding trends. According to Inc42’s annual funding report, the total funding in the sector declined almost 4% to $829 Mn in 2024 from $861 Mn in the previous year. Besides, total funding in the sector plunged almost 25% from $1.1 Bn in the last two years.