Aerem, an Indian solar financing startup, has secured $5 million (~₹413 million) in a pre-Series A funding round to help finance its upcoming product offerings. The investment was led by Avaana Capital, a climate-technology investor, and also included participation from Blume Ventures.

The funding round involved $1.5 million (~₹123.92 million) in debt financing from financial institutions.

Aerem plans to use the funds to broaden its range of creative solar tech and financing options. It also aims to establish a network that brings together financial institutions, engineering, procurement, and construction firms, and micro, small, and medium enterprises (MSMEs) to facilitate complete solutions for rooftop solar projects.

The company aims to overcome the barriers that hinder the adoption of rooftop solar by MSMEs. Through its technology platform, Aerem verifies the quality of the installation process and enables safe payment to installers.

Founder & CEO of Aerem Anand Jain said, “The solar industry in India has been growing rapidly in recent years, driven by increased awareness of the benefits of renewable energy. India has set a target of ~300 GW of solar energy capacity by 2030, requiring both rooftop and utility-scale to fire. Aerem’s innovative solutions are well-positioned to capitalize on this trend and help accelerate the transition to a more sustainable future.”

Anjali Bansal, Founding Partner at Avaana Capital, said rooftop solar would play a crucial role in India’s green growth transition. “There are several enabling factors, including declining technology cost curves, significant location advantage with 300 days of sunshine in a year, and increasing policy support such as net metering to progress towards the 50% renewable energy capacity targets. Aerem is building a unique technology-enabled platform to accelerate the adoption by MSMEs and enable them with energy access and independence, as well as equip MSME installers on the supply side. We’re excited to work with Anand and the rest of the Aerem team and support them on this journey.”

The company also provides loans through its in-house non-banking financial company and partner banks.

In July last year, Aerem had raised $2.5 million in pre-Series A funding to build a technology platform to enable end-to-end seamless interaction with various stakeholders. The funding round was led by  Blume Ventures.

Global corporate funding for solar companies, including from venture capital, private equity, debt financing, and public markets, amounted to $24.1 billion in 2022, according to Mercom Capital’s 2022 Solar Funding and M&A Report.