South African Solar Provider Faces Turbulent Times
Hohm Energy, a leading solar power provider in South Africa, has recently halted operations and entered business rescue due to severe financial difficulties. The company, known for its significant contributions to the renewable energy sector, is now grappling with debt management issues that have led to operational shutdowns and employee layoffs.
Operational Halt and Business Rescue Proceedings
The financial strain has compelled Hohm Energy to cease its operations temporarily. A business rescue practitioner has been appointed to assess the situation and devise a strategic plan for the company's future. Franc Gray, CEO of Spark Energy Services, Hohm Energy's parent company, confirmed that the firm is currently inactive in the market as it seeks legal advice on possible next steps.
“We are working with legal counsel to get a better understanding of a way forward, but Hohm is currently not trading,” said Franc Gray, highlighting the uncertainty surrounding the company’s future.
Leadership Changes Amid Financial Crisis
The financial challenges have also triggered significant leadership changes within Hohm Energy. CEO Tim Ohlsen resigned last week, and Managing Director Ryan Steytler stepped in to lead the company. Steytler's first major decision was to place the business into rescue proceedings, a move he made independently, against the advice of shareholders, according to Franc Gray.
Hohm Energy’s Journey
Hohm Energy’s journey began in 2013 when it launched a solar installation and engineering subsidiary in South Africa. Recognizing the limitations of scaling in the solar engineering sector, the company shifted its focus to developing a scalable tool designed to enhance its business growth. By combining industry knowledge with software development, Hohm Energy created a system for generating customized solar proposals and automating workflows to accelerate the solar sales and deployment process.
In 2020, the company rebuilt its source code, and by 2021, it had spun out of Hohm as a standalone climate-tech startup. Hohm Energy's mission evolved to support the broader solar industry, aiming to build a global solar network to drive the renewable energy transition.
A Record-Breaking Seed Round
Earlier this year, Hohm Energy achieved a significant milestone by securing $8 million in its final Seed round, the largest ever for a tech startup in South Africa. The round was led by E3 Capital and 4DX Ventures, with participation from new investors such as Breega, E4E Africa, TO.org, and others.
The funds were intended to accelerate the adoption of rooftop solar across the region. Hohm Energy planned to enhance its climate fintech strategy, advance technological and product innovations, and expand solar installer skills development to make solar energy more accessible and affordable.
Uncertain Future for Hohm Energy
Despite its recent success in fundraising, Hohm Energy now faces an uncertain future as it navigates through financial challenges and business rescue proceedings. The company’s next steps will be crucial in determining whether it can overcome its current difficulties and continue its mission to accelerate the renewable energy transition in South Africa and beyond.
