Momint, a Cape Town-based blockchain start-up, is forging ahead with its solar crowdfunding platform, raking in millions from the business model.
So says Ahren Posthumus, founder and CEO of Momint, in an e-mail interview with ITWeb.
The interview followed Momint’s rival, Sun Exchange’s recent announcement that it was ditching its original crowdfunding model in favour of corporate and institutional investors. The company said the crowdsale model was no longer viable.
Last year, Momint announced its SunCash crowdfunding offering, which aims to help ease SA’s energy crisis by allowing anyone to invest in solar power and resell it to institutions.
It allows investors to purchase solar cells – a constituent part of solar panels – from as little as R150 through the SunCash website.
“We have signed deals to the value of R120 million to date, and are focused on making sure there will always be access to both institutional investors and smaller private investors,” says Posthumus.
“For us, we see this new wave of renewable energy infrastructure as vital to the economy and we hope to make sure it’s owned by, and benefiting South Africans. We are already working with some larger funds – but we make sure these partners are open to allowing for community participation on the projects.”
Posthumus points out that institutional investments typically suffer from limited liquidity. “In simpler terms, they generally have to buy and own 100% of a project, and are locked into it for the full contract term, unless they do expensive private equity deals, which takes a long time and loads of lawyers.
“With our model, because everything is broken up into ‘share certificates’ managed by the latest secure blockchain technology, it’s significantly cheaper and easier to do these private equity deals, and it can be done in smaller increments. This is a vital benefit.”
According to Posthumus, Momint has a pipeline of R400 million in projects to develop across South Africa, “and we know the S12b (125%) tax incentive will be here for 2024 – it's unclear if it will exist thereafter”.
“So, our plan is simple really – continue investing in high-quality projects and grow our community of individual and institutional investors.”
He says the company has the ambitious goal of ending load-shedding within the next five years – or at minimum being one of the larger contributors to addressing this energy crisis, before looking at expanding across South African borders.
“I think it’s important to note this isn’t necessarily a failure of the solar funding model – in fact, if anything, I see this as a sign that these projects are so attractive that large institutional buyers, who understand the market, are coming in and scooping up all of the opportunity.
“I hope that everyday South Africans realise the opportunity and get involved, otherwise the sector will be owned completely by bigger funds.
“We personally believe in a synergistic hybrid – just like the stock market. Big volumes are driven by funds, sure, but the market is still very accessible to retail investors.”
He adds that Momint differs from Sun Exchange in core ways.
“We don’t simply pool funds; buyers actually buy and own tradable shares. We pay out in stable coin (dollars) to remove speculation behind crypto. We allow our users to take their shares off the platform − ‘self-custody’ as it’s sometimes called − and still earn their income.
“We came into this market with massive respect for Sun Exchange and still think they have been incredible pioneers in this space. We are more than happy to learn from them and pick up the torch, so to speak,” he concludes.
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