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Wunder Capital

https://www.wundercapital.com/
Energy & Infrastructure
Wunder manages solar investment funds, designed to connect individual, institutional, and corporate investors with solar projects.
Scorecard
A
Quality of Offerings
B
Fees
B
Quantity of Offerings
B
Brand
B
Liquidity & Cash Flow
B
Risk & Diversification
Accessibility
B
Alts for All Score
4 - Good

Wunder Capital is a debt financing platform, offering accredited investors the opportunity to invest in commercial solar projects. Wunder is America’s leading financier of commercial solar projects, expanding accessibility to an investment that can help obviate some of our worst sources of carbon emissions. Wunder was recognized as one of the World’s Most Innovative Companies by Fast Company for its success in “financing small businesses going solar.”

Solar projects, particularly within the commercial sphere, have emerged as a top option for those looking to pivot toward renewable energy. Options such as biofuels and geothermal have yet to prove cost-effective – a solar panel install, for example, tends to be two to three times cheaper than a geothermal pump – while wind and hydroelectric power are significantly more dependent on location. Furthermore, while wind (20-40% energy efficiency) and hydro (80-90%) are currently more efficient than solar (normally 15-20%), recent advances hold the promise of doubling solar efficiency in the coming years. Many companies have the necessary land to operate solar facilities but balk at the upfront cost of such a long-term investment. Advances in efficiency, which translates to a higher return on investment, offer one motivating factor, with the other being the convenience of Wunder’s funding model.

Solar energy goes well beyond individual-level installations (i.e. putting a panel on your roof), which are a frequent area of media focus. Wunder has made strides in raising adoption on a corporate level, using a tech-driven approach to source potential opportunities, cut out slack in the developmental financing process, and ultimately make direct loans to commercial and industrial customers that reduce the initial burden of a solar install. Set-up is the most prohibitive aspect of a solar project, so an offering promising easy and scalable funding serves a vital function. To date, this has led to partnerships with over 300 commercial installers and developers in over half of the states in the U.S. The environmental impact of Wunder’s offering also stands out, particularly when considering the company’s room for expansion moving forward. Financing projects backed by the company have, in aggregate, displaced upwards of 400 million tons of CO2 per year since 2013, enough to offset the carbon footprint of over 35,000 cars on a yearly basis.

For investors, Wunder bifurcates offerings along the lines of institutional and accredited investors. Partnering with major private equity investors such as Ares Management and Cyrus Capital, the company raised $100M in 2020 to expand its mission of mitigating the primary barrier for accessing solar projects. Wunder also offers funds for the public; however, the availability of funds is dependent on whether the company is in need of capital to meet project obligations. Following the site’s institutional funding, it closed publicly-accessible funds; however, it has not ruled out opening up its fund to accredited investors in the future. Historically, these funds have provided monthly distributions and returns as high as 6-8%, with low market correlation due to the long-term nature of such investments.

Wunder Capital has built out a disruptive funding model with considerable potential, providing historically underserved small businesses invest in solar energy. The primary concern tied to its offering is simply whether or not it is available to investors, with its move toward institutional funding threatening the existence of its fund option.

Pros

  • Wunder Capital allows for diversification, enabling access to a space that is uncorrelated with the stock market and geographically diverse.
  • The site’s prior success in funding commercial solar projects has helped it build out a robust model for evaluating opportunities.
  • With limited competition and an underserved core market, there remains significant room for growth within the commercial solar financing space.

Cons

  • The site’s fund offering is a hanging question mark due to the company’s round of institutional funding. Wunder has not gotten rid of the option on its site and has stated that future fund offerings will be contingent on a shortage of capital relative to identified opportunities.
  • Investments in solar are inherently limited with respect to liquidity, as they tend to have time horizons that can be up to a decade.