There were plenty of rooftop solar companies raising capital during the 2016-19 period. However, the fund inflow in such startups slowed down gradually and only a handful of them are in serious business. In fact, recent funding rounds for firms like Solar Square have been built around funding their customers.
One early pre-2020 startup is ZunRoof which managed to recover somewhat in FY23 despite a dip of 36% in revenue during FY22.
ZunRoof’s revenue from operations grew 15.5% to Rs 29.85 crore during FY23, according to its annual financial statements filed with the Registrar of Companies.
The six-year-old firm focuses on the design, installation, and financing of rooftop solar solutions. It also claims to leverage artificial intelligence to enhance the efficiency of solar rooftop setup. Post 2020, it had also diversified into ‘smart home’ concept, promising a host of IoT products for homes.
The company claims a footprint across 75 cities and served over 3,5000 customers to date.
The cost of components accounted for 64.4% of the overall expenditure. This cost remained flat at Rs 38.5 crore during FY23 while employee benefit cost was steady at Rs 11.1 crore during the same fiscal. The company added another Rs 2.8 crore towards advertisements which pushed the overall cost to Rs 59.75 crore in FY23.
High cost and flat growth worsened its bottom line and its losses increased 10.2% to Rs 29.48 crore in the last fiscal year. Its ROCE and EBITDA margin stood at -149.47% and -88.21%. On a unit level, Zunroof spent Rs 2 to earn a unit of operating revenue in FY23.
ZunRoof raised $3 million in Series A funding round from the Godrej Investments office in March 2022. In the past 12 months, a clutch of solar tech companies including Aerem, SolarLadder and SolarSquare raised funds. In rooftop solar space, Zunroof competes with a clutch of firms including SolarSquare, Cleantech, Mysun, Oorjan, Loom Solar etc.
According to recent reports, India’s potential for rooftop solar is estimated at 200 GW. In FY22, the country added 1.7 gigawatt (GW) of rooftop solar capacity.
Zunroof’s trajectory has been disappointing, to say the least. As a relatively early entrant that boasted professional management and raised early seed capital to boot, the firm seems to have botched up the journey badly. While initial problems can be blamed on inexperience with actual dealing in the power sector and the pandemic disruption, it has clearly missed catching the sharp rise in the solar rooftop market in the last two years. The diversifications into ‘smart’products seem ill advised, if the idea was to seek higher margins with its own, distinct brand Zunpulse. The category has only become more commoditised, and larger, more well known brands are also capable of crowing out Zunpulse.
The firm has regularly painted a future with great possibilities, and managed to convince investors too, but one would have to say that execution has lagged.
With multiple policy changes making the solar rooftop market much more predictable now, one can only hope that Zunroof, with all its experience and professional backing, can deliver now. It will need every bit of luck and resolve, as large players like Tata Power, Amplus and others take the rooftop market more seriously now.
