Otovo secures €10m in series B funding, accelerating European expansion
(Oslo, Monday October 29) Norwegian solar platform Otovo has secured another equity raise in a funding round led by Nysnø, the The Norwegian sovereign wealth fund geared toward climate investments, and the KLP pension fund.
Otovo enables homeowners to get tailor made, instant quotes for solar panels on their roofs, while hosting a marketplace with hundreds of installers who algorithmically bid for the projects generated. The Norway-based distributed energy sales and installer platform currently covers Norway and Sweden and will use the current funding round to expand to more European countries.
Higher electricity prices in Europe
- We are very happy to have secured funding for our European expansion by solid investors with a long-term perspective. We believe our system is superior to other ways of selling and installing small renewable energy units. Now it is time to put what we have learned in the tough markets of Norway and Sweden to use in countries further south, where the sun is more plentiful and electricity prices typically are higher, says Andreas Thorsheim, CEO at Otovo.
Existing shareholders, among them Agder Energy Ventures, Akershus Energy, and OBOS also participated in the round.
The best solutions to climate change
- Nysnø's objective is to invest in companies with the smartest solutions to the challenges of climate change. Nysnø has a long-term perspective and will invest in companies and funds, alongside private investors, in order to accelerate the green transition globally. The Otovo team has created a unique technology platform that sells solar panels, facilitates installations, and compares cost of dozens of local installers in an instant. Their platform will contribute to an efficient roll-out of residential solar power on a large scale, and the planned European expansion is likely to accelerate the transition to more distributed solar energy and a greener economy, says Eivind Egeland Olsen, Investment Director at Nysnø.
Expanding to Europe
- We believe residential solar energy will be a rapidly growing part of the energy mix going forward. Our investment in Otovo marks the start of what will become a portfolio of long-term investments in technologies and businesses that contribute to reducing greenhouse gas emissions. We believe Otovo is positioned to create positive ripple effects in society and accelerate the green transition with their move further south in Europe, says Siri Kalvig, CEO at Nysnø.
Potential for a low-emission society
- Otovo is well positioned to take part of a growing European solar market and we look forward to joining the expansion. The KLP Group has a clear goal of increasing climate-friendly investments, and Otovo is a good example of a business model that shows the potential for a low-emission society, says John Harald Henriksen, Portfolio Manager at KLP Capital Management.
In Europe, an estimated 5 million homes will install solar panels in the coming five years, according to data from Solar Power Europe. Solar PV systems have gained attractiveness as the EU has removed tariffs on Chinese imports and set more ambitious renewable energy targets this year, triggering liberalization of solar installation regimes and improved subsidy schemes in several European countries in 2018.
- It’s amazing to see the increased interest in residential solar all across Europe. The Netherlands and Sweden are booming, while France has recently introduced new self-consumption incentives and Spain is turning to solar in a big way. This will be massive, and we want to be the ones lifting this market, says Thorsheim.
Reduced payback time
Payback times for solar PV systems on European homes have come down drastically the last few years. In many regions, homeowners can expect to have their money back in 7-8 years or less, and then get energy for free for decades as solar panels typically last 30 years or more.
Otovo was founded in 2016 by former executives from the software, consumer retail, and renewable energy industries. The company has raised €20m to date and has 30 employees. The company is expected to have a market share of 50-60% in Norway and 10% in Sweden in the fourth quarter of 2018.
Nysnø Climate Investments (Fornybar AS) was established by the Norwegian Ministry of Trade, Industry and Fisheries in December 2017, and has been operational since October 2018. Nysnø invests in technology, solutions, and services that moves Norway faster towards the low-emission society while contributing to global greenhouse gas cuts. Nysnø is a commercial player looking to create long-term returns on our investments. Long-term returns require that companies have a sustainable business strategy and that they are part of the solution in the future low-emission community.
KLP is Norway's largest private pension fund with more than €65bn under management. The fund has almost 1000 employees and manages pensions for more than 450 000 employees and 278 000 pensioners. KLP is consistently recognized as a global leader in sustainable investments.
SpareBank 1 Markets AS acted as sole financial advisor in the Private Placement. Advokatfirmaet Thommessen AS acted as legal advisor for Otovo in connection with the Private Placement.