South African solar company enters business rescue - report

South African solar company, Hohm Energy has entered business rescue, despite securing an $8 million seed round in February.

TechCabal reports that the company is currently inactive due to cash flow issues and debt servicing challenges.

Business rescue under South African law lasts three months, during which a practitioner will review the company’s situation, hold a creditors’ meeting, and provide recommendations.

“We are working with legal counsel to understand our options, but Hohm is currently not trading,” Franc Gray, CEO of Hohm’s parent company, Spark Energy Services, told TechCabal.

CEO Tim Ohlsen resigned last week, according to sources. Following his departure, managing director Ryan Steytler assumed leadership and decided to initiate business rescue, a move Gray claims Steytler made without shareholder approval.

Steytler and Ohlsen could not be reached for comment.

Founded in 2021, Hohm Energy offered a solar marketplace that allowed customers to assess their solar needs and secure loans for rooftop installations. The platform also enabled solar installers to design, manage, and finance projects.

By February 2024, Hohm claimed to have created over 17,000 custom solar rooftop designs worth $190 million and had $90 million in financing applications. Ohlsen stated at the time that the company was on track for profitability by year-end.

Improvements in grid electricity in recent months has reportedly put a strain on the business. “Hohm had high fixed costs and struggled to adjust as revenue declined due to decreased solar demand,” said Gray.