Financial Troubles Lead to Liquidation
South African climate-tech startup Hohm Energy has filed for voluntary liquidation with the Companies and Intellectual Property Commission (CIPC). This comes after the company ceased operations in August 2024 due to financial difficulties, including struggles to manage existing debts.
Hohm Energy has informed its creditors that those with claims over R1,000 ($56.66) are eligible to nominate a liquidator to oversee the process. The move marks a significant shift for the startup, which was once seen as a promising player in the renewable energy space.
The $8 Million Seed Fund Confusion
In February 2024, Hohm Energy announced an $8 million seed funding round intended to drive its climate fintech strategy. The startup planned to use the funds to invest in technological advancements, product innovation, and solar installer training as part of its mission to connect homeowners and businesses with solar solutions. However, confusion around the allocation of this funding has since come to light.
Spark Energy, Hohm’s parent company, clarified that the $8 million was not exclusively raised for Hohm Energy. According to Franc Gray, CEO of Spark Energy, the funding was secured over a period of two-and-a-half years, benefiting multiple projects, not just Hohm. While Hohm Energy did receive a portion of the funds, it became clear that the startup’s financial struggles persisted despite this support.
Impact of Load-Shedding and Drop in Demand
Hohm Energy had positioned itself to capitalize on South Africa’s load-shedding crisis, anticipating a surge in demand for solar energy solutions. Load-shedding, or rolling blackouts, had driven interest in renewable energy as homeowners and businesses sought alternatives to unreliable grid power. However, as load-shedding eased toward the end of 2023 and into 2024, demand for solar installations began to decline.
This sudden market shift, combined with existing financial challenges, left Hohm Energy unable to recover. The company’s plans for growth stalled as the need for its services diminished, contributing to its eventual decision to liquidate.
Connecting Homes and Businesses to Solar Solutions
Founded in 2021 by Tim Ohlsen and Emir Gluhbegovic, Hohm Energy aimed to simplify the process of adopting solar energy for homeowners and businesses. The company built a platform that connected clients with accredited solar installers, product suppliers, and financing options, positioning itself as a key player in South Africa’s renewable energy market.
Despite the vision and early promise, the company’s financial struggles and market miscalculations ultimately hindered its ability to sustain operations.
