Financing for sustainable home improvements with Brighte

Brighte is a credit technology platform offering Australians the ability to pay for home energy related improvements.

While Brighte doesn't directly reduce emissions, it has a big indirect impact by helping more homes become sustainable. It is is one of the best known companies in the area due to its successful growth and capital raising. AFR

Brighte started with a desire to make paying for solar easy. Founder Katherine saw that there were no transparent, fast and affordable finance options for people trying to improve their homes and the world around them.

In 2015 Brighte was founded, offering Aussie families, like Katherine's, affordable access to sustainable energy solutions through an easy payment platform.

By making everyday technologies accessible, we know we can fundamentally change the way Australians control their energy by shifting power back to the home.

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Intro video: 

‍Customer Focus

Brighte has two different sets of customers. Individuals and businesses who want to buy large ticket ($1,000+) sustainable products, and vendors who sell/install them. Both are important to Brighte, and to getting to net zero.

On one side, Brighte looks after residential home owners and also businesses. They provide a variety of financing options, including 0% interest and green loans, for a variety of sustainable investments and improvements, including;

1. Solar systems
2. Battery storage
3. Off grid systems
4. Solar battery systems
5. Water filtration
6. Energy efficient products
7. Solar hot water
8. Air conditioning
9. Hot water
10. Solar pool heating

They also seem to offer loans for general improvements which don't directly link to sustainability, such as pools and decking. From speaking to the team, this is about providing a full range of options to allow people to enjoy their homes and can also be a starting point to sustainability. i.e. get a pool, and why not get solar pool heating, and since we're on your roof let's put on some solar panels.

I recieved some feedback on this from a Brighte spokesperson;

At Brighte, we believe that sustainable homes should also be comfortable. It’s not a trade-off between the two. After great experiences with solar, our customers have told us that they would like to use us to finance their larger home improvements as well. We believe that every little bit helps and in fact by offering a select set of home improvements we can actually help Aussies electrify their homes faster. For example, with pools we can now offer solar heating. During COVID, people are spending much more time living and working from home, so creating sustainable and comfortable homes is more important than ever before.”

A key point is that Brighte's sweet spot appears to be middle income level customers. This is because they won't lend to someone who cannot pay back the loan. This is important to not burden people with debt. They also don't offer a significant point of value for people with other financing options like cash or using a mortgage offset account with very low interest. This is still a significant unlock of climate value and impact as there are a lot of people who would like the long term benefits but cannot afford the upfront costs.

The vendor, or sustainable equipment sale and installation, side of Brighte is the less obvious but critical value creation point. Brighte's business model is for these business to pay Brighte to provide finance to their end customers. Why would a business do this? Many of these are small to medium businesses who are working hard to be sustainable themselves. What Brighte offers to them is more customers (as some couldn't buy without the finance) and also cash flow certainty (a huge benefit to business owners). The cash flow certainty means that they get paid every time without having to chase up customers which can be a huge problem, especially in building related and high cost items.

Highlights

We serve our customers with products and services that eliminate carbon emissions, including:

• The way households generate and store electricity (i.e. solar / battery)
• The way households move around (EVs + EV chargers)
• The way households use electricity (cooking, heating and cooling, water heating)
• The efficiency of households (double glazing, insulation, sealing, etc.)

Challenges

While Brighte is clearly doing really well, there are a few parts of this business which are hard and complex.

Firstly, as it can be seen from some of the reviews on Trust Pilot, the end customer can hold Brighte responsible for the work done by vendors. This is especially true if they were referred to the vendor from Brighte, and less if they found them and only went to Brighte for finance. There is a good side to this in that like Uber blocking or providing training for low scoring drivers, Brighte needs to have a quality level.

Secondly, scale. Brighte seems to be currently focused on Australia. We need every home and business to make multiple investments into sustainable products to help us get to net zero and beyond, so their market is big. Though it's interesting to consider whether there is a point when most of the investments have been made and the customer need drops. That being said we are less than 1% (my guess) into this space and there is always new innovations. The article in the AFR has claims from the CEO about the market being $45B per annum.

Report Card

• Impact - Creating technology is not enough to have an impact, we need to get them installed, and for most of the world that is a financial decision which needs solutions like Brighte.
• Team - Linkedin shows 157 employees, so Brighte isn't a startup anymore. Katherine, the CEO, appears to be a strong, smart, committed leader and has attracted a growing group of specialists around her.
• Product - Brighte isn't highly technical, though they have a good user experience. I wasn't able to fully use the product due to the commitment, but their TrustPilot reviews seem be overwhelmingly positive.
• Market - as above, the market in Australia is large, and potentially endless, but there are a few dynamics here which may change as the market changes and obviously Brighte would be bigger if it is able to get into other, bigger markets.
• Traction - Brighte is well beyond being a startup, with 50,000 customers and over $500m in financing provided.
• Capital - Brighte has raised $300m in equity and $500m in debt financing valued at well over $1B.

From The Team

Company: Brighte
Themes: Energy,Consumer,Reduce emissions,Powering
Summary: Brighte is a credit technology platform offering Australia's easiest way to pay for home energy and home improvements
Country: Australia
Founders: Katherine McConnell
Product stage: Scale
URL: https://brighte.com.au/
Capital raising: $300m raised to date

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Company Mission:
Brighte is a credit technology platform offering Australia's easiest way to pay for home energy and home improvements. Brighte is a finance product for people in Australia making home improvements with a focus on Sustainability. They provide zero interest and other loans for products such as solar panels, batteries, air conditioning, lights and soon into electric vehicles.

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Bonus: 

I got to speak to Katherine a few years ago to help encourage more women into STEM.

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Photo by Jeremy Zero on Unsplash