The tide has turned, the turnaround in interest rates has also hit the tech sector and is having a massive impact on the way corporate growth is financed. The new catchphrase that is being read and heard more and more often is “debt funding” – i.e. outside capital that is usually made available by banks.
The German solar unicorn Enpal is also about debt funding this Friday, and on a grand scale. Because the landlord and seller of PV systems and recently also heat pumps announced on Friday that he had received a fresh 430 million euros in loan commitments. The DWS Group, i.e. the listed asset manager of Deutsche Bank, and the British Phoenix Group are new investors, and ING Germany and the asset manager BlackRock are also back.
“The addition of the latest senior lender, DWS, with a further EUR 100 million has brought Enpal’s total refinancing commitments to more than EUR 1.9 billion. This milestone represents the largest renewable energy financing activity in Europe to date. The fresh refinancing capital will enable Enpal to install more than 13,000 new renewable energy solutions, including solar systems, storage units and charging stations for electric vehicles -Emission. At the end of 2022, the company had already received financing commitments of EUR 855 million from funds managed by BlackRock Alternatives, ING, Pricoa Private Capital, Unicredit and Infranity.
Venture Debt: The new financing trend for scale-ups
Tough competition for a booming market
Enpal is in an intense race with other companies such as 1Komma5° from Hamburg for the fast-growing German solar market. According to its own statements, the company around CEO Mario Kohle has won around 40,000 customers in Germany so far. Due to the energy transition, which is also politically driven (zero percent sales tax for photovoltaic systems since the beginning of 2023), the market for PV systems in private homes has become even more attractive, and Enpal also wants to tap into the boom in heat pumps as a replacement for old oil and gas heating systems.
The fight for this market was already blossoming. Enpal was caught by Trending Topics for offering an alleged comparison platform under the name “Deutsche Solarberatung”. The pricing model for renting out PV systems has also come under criticism. Above all, there is a clearly noticeable rivalry with 1Komma5° in Hamburg, which is also a very expansive supplier of PV systems, heat pumps, etc.
Solar unicorn Enpal presented itself as a “German solar consultancy”.