Former Facebook worker and present enfant horrible of excessive finance Chamath Palihapitiya is making information once more with a $1.three billion twofer SPAC and PIPE deal into the photo voltaic power financing firm, Sunlight Financial.
Sunlight Financial is actually a lending firm that offers photo voltaic installers a approach to offer loans to householders to finance solar energy and battery installations and different residence enchancment tasks.
While it could be one other indication of the Roaring ’20s come again to hang-out world monetary markets within the lead-up to a catastrophic meltdown of the worldwide monetary system, there’s a minimum of some technique to the insanity with Sunlight.
That’s as a result of there’s a number of tailwinds behind a enterprise that’s lending cash to offer higher entry to solar energy, power storage and power effectivity upgrades.
A Biden presidency doesn’t want a Green New Deal to make progress on local weather change
The funding, alongside Coatue, Franklin Templeton and BlackRock, will worth the lender at $1.three billion. A wholesome determine, however one which’s not astronomical, particularly given the $705 million in financing that Sunlight Financial has raised over its historical past, based on Crunchbase.
As Alex Wilhelm famous earlier at this time, Sunlight Financial would have doubtless tapped public markets ultimately, given a reasonably stable monetary efficiency — even through the pandemic:
Looking on the numbers, it’s considerably clear that the corporate may have gone public in a 12 months or two; one other 12 months’s development, and it could have had sufficient income to pursue a standard debut. Via this SPAC-led deal it can get out sooner and have extra cash whereas it scales. Perhaps that’s the worth of the SPAC right here for Sunlight.
Sunlight additionally has the good thing about being a publicly traded renewable power play at a time when these corporations are in brief provide and excessive demand from institutional buyers.
Over the course of 2020, massive cash moved to seek out methods to assist companies that may assist mitigate the results of local weather change or sluggish the quickly warming temperatures on the planet.
“Industry commitments to mitigate local weather change danger is offering buyers with visibility that there’s momentum amongst decision-makers to drive change,” stated Richard Manley, the managing director and head of sustainable investing at CPP Investments, in an interview final 12 months. “There’s an appreciation inside the public markets that the thrilling transition options both inside core working subsidiaries or investments within the VC arms of company corporations haven’t supplied public fairness buyers the actually centered alternatives they’ve needed.”
What’s behind this 12 months’s increase in local weather tech SPACs?
With the launch of Palihapitiya’s newest SPAC, that development appears set to proceed in 2021. As Rob Day, a longtime investor in local weather tech wrote in a direct message late final 12 months:
“[The] present wave [of SPACs] is as a result of over the previous 24 months the institutional investor universe has come absolutely into believing that local weather options are going to be a significant development space within the 2020s and past, however they weren’t seeing choices out there to them for investing into,” based on Day.
“The out there publicly traded ‘inexperienced’ corporations had been already getting actually purchased up, and the non-public fairness choices had been underwhelming as nicely (smallish within the case of VC, low returns within the case of large-format tasks). Throw in a Robinhood market of retail buyers with a number of enthusiasm for EVs and such, and you’ve got a pleasant recipe for this to occur.”