Solar Ladder aspires to build a managed marketplace that includes everything from procurement, sales, installation, after-sales services, working capital loans and long-term financing, built atop a layer of SasS
To fuel its ambitions, the startup announced that it raised INR 11 Cr from Axilor Ventures, Titan Capital, DeVC, Stride Ventures and several angel investors, including Varun Alagh
Solar Ladder operates in an industry that is expected to reach $50 Bn in size by 2030 but is fettered by issues like a dearth of working capital and high fragmentation
India is rapidly progressing towards establishing itself as one of the leading solar energy-producing nations. As of April 12, 2023, the country boasts an impressive installed capacity of 66.78 gigawatts (GW), positioning it as the fourth-largest country in terms of solar energy capacity.
Notably, in the first quarter of 2022, India added 456 megawatts (MW) of rooftop solar capacity, up 13% quarter-on-quarter (QoQ) and 34% YoY. With this kind of adoption, the industry is set for a bright future, especially when the country’s potential for rooftop solar is estimated at 200 GW.
However, supply chain issues, a lack of working capital financing and high fragmentation have fettered the growth of the industry, which is expected to reach $50 Bn in size by 2030.
Realising the potential that the nation’s solar energy industry holds, along with the challenges denting its current state, Manan Mehta, Abhishek Pillai and Farhan Ahmed founded cleantech startup Solar Ladder in 2021.
The startup’s approach is simple – help the thousands of small businesses operating in the rooftop solar industry scale and boost solar adoption in India.
“We are sitting on one of the biggest opportunities of our lifetimes. This is because rooftop solar is one of the first commercially viable and decentralised sources of energy,” Mehta, the cofounder and CEO told Inc42 in an exclusive interaction.
Charging Up The Supply Chains
“We realised that most of the bottlenecks lie in the supply chain and financing,” Mehta said, adding that although a solar business appears to be primarily focused on technical aspects, it requires a lot of working capital. “Whether it’s a manufacturer, distributor, EPC provider, or an end user, access to working capital is crucial for scaling operations.”
In the solar industry, EPC means engineering, procurement, and construction. It is a term that is used by companies that provide end-to-end solar energy services, including design, procurement and installation of rooftop solar energy systems.
The CEO added that the core of the bottleneck was financing and the complex web of suppliers and manufacturers an EPC provider has to go through.
Essentially, Solar Ladder employs a typical margin differential playbook, where it earns money by procuring components from manufacturers in China and India in bulk and then selling them to EPC providers and rooftop solar companies.
Having partnered with five NBFCs, the Mumbai-based startup also offers collateral-free financing to both EPC installers and end users. The founders said that they have offered credit to 50+ SMEs and 50+ end users to the tune of INR 8 Cr and INR 1 Cr, respectively, since the second half of 2022.
Climbing India’s Sun-Rich Rooftops With Solar Ladder
The full-stack supply chain platform for solar installation companies provides software which solar installers use to run their business.
“On top of that is a layer of procurement, which allows them to procure the required equipment,” Mehta said.
Interestingly, the company built its software solution first and then pivoted to offering supply chain solutions.
Speaking about the cleantech startup’s current plans, cofounder Pillai said digitalising EPC installers was a priority, as many of them were using traditional methods like spreadsheets or, at best, run-of-the-mill CRM software to manage their operations.
“Solar Ladder offers a free SaaS tool that includes modules such as sales, marketing, installation, accounts and project management. It gives EPC installers more visibility into a business’s various functions such as ongoing projects, inventory and payments,” the cofounder said.
While the sales module is free to use, EPC providers are charged for more premium modules as they scale.
This also couples with the startup’s procurement business and working capital loans and augments EPC providers’ inventory and capacity to handle more concurrent projects, allowing them to scale up rapidly.
The cofounder said that Solar Ladder’s SaaS solution has onboarded 300+ users since 2021, including big names such as Mahindra Solarize and Fourth Partner Energy.
“However, despite witnessing 5X growth over the past year, the SaaS solution is only a small part of our revenue compared to our supply chain solutions, which dominate our balance sheet. Plus, we are PAT positive,” Mehta told Inc42.
Solar Ladder Raises INR 11 Cr To Fuel Its Ambitions
Solar Ladder aspires to build a managed marketplace that includes everything from procurement, sales, installation, after-sales services, working capital loans and long-term financing, built atop a layer of SasS.
To fuel its ambitions, the startup recently announced that it raised INR 11 Cr from Axilor Ventures, Titan Capital, DeVC, Stride Ventures and several angel investors, including Varun Alagh.
“Solar Ladder is one of the most capital-efficient and frugally innovative teams we’ve invested in. The founders have been passionately working on the ground and understanding every facet of the industry. Their early set of customers have grown manifolds and we are excited to see them replicate the business model on a larger scale,” said Bipin Shah, a partner at Titan Capital.
With a profitable business model set to consolidate one of the most important industries in the energy sector in coming years, Solar Ladder looks set to maximise the $50 Bn potential India’s rooftop solar sector has to offer.
The cleantech startup competes with the likes of Blume-backed Aerem, although the cofounders do not consider it a direct competitor.
Solar Ladder has raised funding at a time when the Indian government has set a goal of achieving 100 GW in installed solar capacity in the next few years. In the first quarter of 2023, the cleantech segment bagged more than $6 Mn in funding across five deals, down 32% and 44% compared to Q1 2022.