Summary
We are excited to announce our investment in NRN, a Sydney-based business that provides rooftop solar and batteries to consumers at no upfront cost via a four-sided marketplace. NRN brings together electricity retailers, solar installers, customers and investors in one place.
We are co-leads and the largest equity investor at $3.9m in NRN’s Series A raise, alongside support from Investible, Ecotone and others, and debt provided by Infradebt managed funds.
The Challenge
Around 4 million households in Australia have rooftop solar, which AEMO expects to continue to grow strongly. However, this high penetration of solar has created challenges for the grid, including the ‘duck curve’ (where prices have become low and even negative in the middle of the day) and grid instability. This has resulted in feed-in-tariffs declining significantly.
Household batteries can solve many of these challenges and unlock value for homeowners. However, only around 5% of homes with solar have batteries, as these have historically remained unaffordable for most. New solutions are needed to make these systems financially accessible to a broader range of households.
Enter NRN
NRN has worked with energy retailers, solar installers, customers and financiers to develop their unique four-sided marketplace which makes energy resources accessible to more households. Under this model, NRN coordinates all four parties while owning and maintaining the assets, allowing consumers to unlock savings on their electricity bill while paying nothing upfront. These assets are then coordinated via a virtual power plant to maximise the value created.
The Founders’ Story
Before NRN, Alan Hunter (Co-founder and CEO) started Splend alongside Chris King, a successful leasing company targeted at rideshare drivers. Alan was key in the early growth of this business and learnt a lot from that experience, which he is now applying to NRN.
We have found Alan to be an incredible growth leader with something to prove. He is ambitious and driven, and exhibits a number of behaviours we love to see in second-time founders including a desire to “go big”, build scalable systems from Day 1, and inspire his young team to go beyond what they thought they were capable of.
Leading the development of NRN’s virtual power plant and back-end capabilities in the early days of the business, Sam Fitz-Roy (Co-founder and Head of Data & VPP) became a co-founder in 2023.
Founders of NRN: Alan Hunter (right) and Sam Fitz-Roy (left)
Why We Invested
- Changing industry dynamics: The rooftop solar industry is now at a turning point. Solar-only systems are becoming harder to sell, and feed-in-tariffs are declining significantly. This, alongside the recently announced Federal Government Cheaper Home Batteries Program, has already driven an acceleration in demand for solar + battery systems. These changing dynamics represent strong tailwinds for NRN to make these systems accessible and attractive to more households.
- Value unlocked for all parties: NRN’s model provides an attractive proposition to all parties involved. Benefits include: 1) solar installers improve their conversion rate, 2) customers pay nothing upfront and get a strong and consistent discount on their energy bills, 3) energy retailers improve customer profitability and capture additional value from the VPP, and 4) NRN earns a fee from the retailer for use of the system.
- Team strong in execution and growth: Alan Hunter is an outstanding growth leader backed by a dynamic young team. NRN has scaled hard over the last year, and we believe their plans are ambitious yet achievable.
- Ability to create a moat: NRN is creating a strong moat around their four-sided marketplace: securing Alinta as an energy retail partner and advancing discussions with others, signing a significant debt facility with Infradebt alongside our investment, and unlocking real business improvements for its early solar installer partners.
We are excited to support the NRN team as they scale and help make renewable energy accessible to all Australians. For further details or any questions, please reach out to Blair Pritchard.
NRN founder, Alan Hunter (left), and Virescent partner, Blair Pritchard (right)
