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June 04, 2014

An Off-Grid Solar Angels List?

 Embark EnergyFinance, finance, finance. That’s the number one obstacle between where our energy market is today

and where we need it to be: clean energy services for all 1.2 billion people currently without energy access around the world.

But to deploy this finance, we need to marry supply and demand. While the industry continues to beat the drum for a new $500 million dollar fund to solve the former, the latter is just as important -a pipeline of companies capable of deploying it. With $45 million flowing into off grid solar in just the past four months, a pipeline clearly exists. But Embark Energy is taking a stab at a longer term - upstream and downstream - solution for deepening that pipeline with a potentially important innovation - an off-grid Angels Investor list.

Embark has a pretty simple mission: empower “thousands of clean energy entrepreneurs to sell and service clean energy products around the world.” They uniquely achieve this mission by offering trainings, one-on-one coaching, and  links to seed funding for their entrepreneurs through an incubator program.  By using this incubation program, companies are able to graduate into more mature investments from partner institutions thereby creating a pipeline of viable companies in this rapidly growing market. It’s the last step of this process that is particularly interesting.

The match-making role Embark would like to play is particularly important for this sector. If you talk to any entrepreneur in this market, they’ll bemoan the lack of transparency and information that ultimately make raising money an incredibly time intensive task. No one knows where the money exists, let alone how to tap into it. So it’s easy to see how this kind of clearinghouse that Embark Energy has proposed would be enormously beneficial for startup companies.   

But it’s not just their creative approach to this problem that makes Embark Energy an important  company to know. It’s also their history.

Embark Energy emerged as a successor to E+Co (founded by Philip LaRocco), a nonprofit financial institution which financed over 250 small enterprises during its nearly two decades of existence.  For those who know, the market E+Co worked in for many years was sowing the seeds for the distributed off-grid solar revolution we are currently watching unfold.

Embark is now leveraging that history and expertise in finance, energy, and development to fill a pipeline gap by “connecting the dots” from seed to incubation to long term investment.

Once the expectations of investors align with the different stages of market growth, a more robust version of the Angels list will emerge.  From their perspective, if you want to pick cherries later, you first need to invest in a portfolio of seedlings now and understand that some of the resulting cherry trees will grow and succeed and some will remain small and grow more slowly.

Of course that’s not the only value Embark plans to provide. They also offer a web-based, highly-interactive training curriculum for entrepreneurs called MyBusinessPlan which helps in the creation and scaling-up of clean energy businesses.  This training incorporates strategic examples from around the world drawn from the experience of the four founders. This unique program also offers one-on-one coaching and provides seed capital matchmaking in addition to access to products and technologies.  

But at the end of the day, with so many cash-starved startups already in existence, Embark Energy filling this matchmaking and clearinghouse role could be incredibly valuable. With Embark drawing on its history of connections to impact investors and foundations who care about the space, we might just see an off-grid version of an Angels Investor list emerging soon.

--Justin Guay, Associate Director, International Climate Program, and Vrinda Manglik, Associate Campaign Representative, International Clean Energy Access

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