Barcelona-based energy retailer Holaluz has had a rocky 2024. It came into the year on slippy financial ground — much-documented in the Spanish press — and needed to urgently raise funds after moving away from supplying gas and seeing a decline in solar panel uptake from consumers.
It took just over half a year to close the financing. The company announced €22m in fresh capital this month and tells Sifted it will be cash flow positive in Q1 next year.
“It has been a very tough year but our numbers are going to be more than fair given the situation we’ve been through,” says CEO and cofounder Carlota Pi. “We’ve been fighting like hell to keep the business alive.”
Holaluz, founded in 2010, is one of Spain’s largest climate tech companies. It sells 100% renewable energy to customers, made up of wind, hydraulic, solar and biomass power, and also instals solar panels onto consumers’ rooftops, who then sell their surplus energy back to Holaluz.
The company is sometimes compared to UK energy firm Octopus, which was founded in 2015 and is worth $9bn. Holaluz, by comparison, has a market cap of €28m (it floated on Spain’s Alternative Equity Market in 2019). The Spanish company has previously said comparisons to Octopus are unfair, as the two operate in very different markets.
Clinching that fundraise
In 2022, Holaluz scrapped its gas distribution business and decided to focus entirely on renewable sources. (Octopus, by comparison, still sells gas.) After doing so, demand for solar panels plummeted: a combination, the company says, of customers hesitant to invest in panels due to high interest rates and competition from the ability of oil and gas giants to artificially push the price of fossil fuels down, dampening demand for solar panels further.
In 2023, the company’s revenues fell 76% to €283m, and its losses ballooned 80% to €26.2m. In November last year, the company laid off 27% of its staff — mainly installers — to cope with the decrease in solar panel demand.
Five months later it was €57.2m in debt (down from €65.4m at the end of 2023) and needed to come up with a plan to raise new funds and refinance some of its existing debt.
“It took seven months to close the refinancing,” says Pi. At the start of this month, the company announced the fundraise, from Madrid-based Icosium Investment, which invests in energy transition businesses. The raise consisted of €6.5m through a capital increase, and €15.5m as a convertible loan.
Cash flow positive
Holaluz told Sifted at the start of this year that it was aiming for €19m normalised EBITDA (earnings before interest, taxes, depreciation, and amortisation) in 2024. Normalised EBITDA is adjusted to remove irregular and non-recurring events.
Across the first half of the year, it reported normalised EBITDA of €9.8m, compared to – €5.4m in H1 2023. Its actualised EBITDA was – €4m in the first half of this year, a 78% increase on the same period in 2023.
“We’ve been focusing on unit economics, on operations efficiency and on profitability,” says Pi.
Efficiencies have come from using AI in parts of the business like customer service, and introducing new products that have boosted customer demand.
It’s seen an increase in demand from customers opting to install a battery alongside solar panels. The company says customers who do that can end up with a €0 electricity bill for five years, as surplus energy produced and stored by them is sold back to Holaluz and taken off their bill. The product, launched in May, has been popular, Pi says. The company declined to share sales figures.
In Q1 2025, Pi says Holaluz will hit a point where it’s consolidated cash flow positive on a monthly basis, meaning it’ll stop burning cash from its combined operations. The energy management business is profitable and the solar and storage business is nearing breakeven, Pi says.
How to make money from solar panels
A number of startups across Europe have popped up in recent years focused on installing solar panels.
Holaluz does sell and install panels, but it does so primarily to purchase the surplus energy from consumers and then sell that on in its function as an energy retailer.
“Eighteen months ago it was all about installing and financing solar panels for customers,” says Pi. “But that doesn’t create any recurring cash flow, nor a sustainable competitive advantage over time.”
Fast forward 18 months and Pi says investors have realised the benefits of being an energy management business, rather than an installer.
Despite the blistering year, she says the macros for solar power in Spain remain strong.
“Out of 10m rooftops, less than half a million are already bearing solar panels,” she says. “That is a market penetration below 5%.” That’s significantly lower than other countries in the European Union, she says. There are Spanish rooftops out there to be capitalised on, Pi says, and they’re rooftops that get far more sun than those in the rest of Europe.
Read the orginal article: https://sifted.eu/articles/holaluz-spanish-climate-tech-alive/
