Dealflow | May 19, 2023

Odyssey raises $15 million to cut obstacles to renewables in emerging markets

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, May 19 – Commercial and industrial solar for business facilities, factories and shopping centers is growing in markets without reliable grid connections. In many emerging markets, supply chain, logistics and financing obstacles prevent implementation from keeping pace with demand.

“There are so many frictions in the process,” observed Emily McAteer of energy tech venture Odyssey Energy Solutions, which connects developers with suppliers, investors to projects, and even provides working capital.

“It’s definitely a lot to tackle,” McAteer told ImpactAlpha, “but the way we can be most impactful is to cover the end-to-end process and be a system of record for projects from the moment they’re conceptualized through operation.” 

Odyssey has raised $15 million in Series A financing from Union Square Ventures, Equal Ventures, Twelve Below, Transition, Equator, MCJ Collective, Abstract Ventures, Founder Collective and Climate Capital.

Odyssey serves more than 2,000 companies and is facilitating more than $1.3 billion in financing in African solar projects. The data Odyssey is collecting throughout projects’ lifecycle, she added, creates a feedback loop that will help streamline the sector over time, McAteer said. 

One market where it’s seeing growing demand for commercial and industrial solar is South Africa, where corruption at the national utility has created a nationwide power crisis that is costing the country $51 million in economic losses each day.

The fresh capital will also help Odyssey expand into new markets. The new equity comes less than a year after its seed round.

Climate-lens investing

Climate tech ventures, once resilient to the VC slowdown, are starting to feel the pinch. McAteer said, however, that despite the complexity of Odyssey’s business and its focus on emerging markets, even general VC funds locked into the financial and impact opportunity. “

Almost every generalist fund we spoke to now has a climate angle to their investing. I think investors are personally motivated to solve climate challenges with their capital,” she observed.

That doesn’t just apply to sexy, high-tech solutions, but also to expanding established technologies like solar PV in underserved markets.

“Anyone who’s really interested in climate understands the critical role that emerging markets play” because of the greenhouse gas emissions risk that comes from economic growth, she added.

The financial opportunity is also attractive. “When you’re putting a solar system on a shopping mall where the alternative is rolling blackouts or really expensive diesel generators, there’s more room for margins on these projects, and that makes the returns higher,” McAteer explained.

Women in climate tech

The amount of venture capital backing women-led startups like Odyssey has decreased from an already paltry 2%. Climate tech investors do slightly better but have also reduced the flow of capital to female founders.

This week, Tangible raised $3 million for its estimation tool that helps real estate developers calculate and manage the carbon impact of construction materials on their projects and portfolios.

“I’m excited to be part of this wave of female-led tech companies,” Tangible’s Anneli Tostar told ImpactAlpha. “I think we bring a different perspective.”

Added co-founder Nicole Granath, “We’re very intentional about crafting a company and culture. We’re very people-centric. And I think we’re very conscious of other perspectives we don’t have.”