UrbanVolt, a Dublin-headquartered energy-saving LED lighting firm whose backers include rugby star Jamie Heaslip, has signed a €30 million funding deal with SUSI Partners, a Swiss green energy private equity outfit.
UrbanVolt, which was co-founded by former Merrill Lynch banker Kevin Maughan, invests its capital installing energy-efficient lighting for businesses free of charge, with an agreement to split the energy savings between both parties over five years.
The deal with SUSI will see the Irish company bundle groups of its clients into portfolios, with each bundle representing an installation outlay by Urban Volt of €1 million. SUSI will then take equity stakes in the bundles, freeing up cash for Urban Volt.
Mr Maughan likened the unorthodox funding deal to the securitisation of future cash flows. “It isn’t common in this industry at all. It is very much a sort of corporate finance structure,” he said.
The company began trading last April and Mr Maughan said it had signed up for about 100 projects so far. He said said it was “very much focused on” the Irish market currently, although it was also assessing opportunities in the German and Austrian markets.
UrbanVolt was recently featured in New Yorker magazine. Mr Maughan said it had already had inquiries from potential customers in the US, although it did not envisage entering the market there until next year at least.
UrbanVolt said most customers will record a reduction in their lighting costs of at least 50 per cent. The company targets small and medium enterprises for its lighting solutions, as well as such as manufacturing plants, warehouses and car parks.
Last September, it signed a three-year deal with Bord Gáis Energy to become the preferred lighting supplier to the utility’s 30,000 commercial customers.
Heaslip, who plays for Leinster and Ireland, invested in UrbanVolt over the Christmas holidays last year.
“SUSI has funds available of up to €250 million and they have been very clear to us that they are keen to co-invest with us on all suitable projects, so we see this as an exciting long-term relationship,” said Mr Maughan. “Because we fund solutions for our customers up front, the business requires significant finance in its early years. This deal will ensure that we have more than sufficient funding to support our roll-out across Ireland over the coming years.”
SUSI said UrbanVolt’s Light as a Service business model was “transformative for the energy efficiency market”.