Solar Square raises $53 mn at nearly $500 mn valuation; plans expansion to 30-40 new cities

Backed by investors such as Lightspeed, Elevation Capital, and Rainmatter from Zerodha, rooftop solar power solutions company Solar Square has raised $53 million in a Series C funding round led by B Capital, taking its total funding to over $100 million. Existing investors, including Lowercarbon Capital, a US-based climate-tech fund, Lightspeed Ventures, Zerodha, and Good Capital, also participated in the latest funding round.

Karan Mohla, General Partner at B Capital, who leads the South and Southeast Asia team for the US-based fund, will join the Solar Square’s board. On B Capital joining the cap table, Mohla said the firm’s research has supported its bullish view on residential energy across markets for years, with India’s focus on energy independence creating a once-in-a-generation opportunity in the sector.

The latest funding round values the company at an estimated $450–500 million.

“This round of funding is to take us to the next orbit of growth,” said Shreya Mishra, co-founder and CEO of Solar Square, speaking to Fortune India. With operations currently spanning 25 cities, the company plans to expand into 30 to 40 additional cities using the fresh capital.

“We are going to hire extensively across our technology and product teams to continue building our tech stack. We also want to invest in branding, which will be another key focus area,” Mishra added.

Solar Square, which operates as a full-stack solutions provider-from system design and installation to financing support and maintenance, - currently works with multiple manufacturers for procurement, with Hyderabad-headquartered Premier Energies being its largest sourcing partner for solar cells and panels.

“We have worked with other manufacturers as well, including Waaree Energies, and we are currently exploring a partnership with Emmvee,” said Mishra.

Founded in 2015, the company pivoted to residential solar power solutions in 2021. It works with resident welfare associations for large apartment complexes and has installed solar power systems in nearly 50,000 homes across the country.

While residential installations account for the majority of its business, the company is selective about its business-to-business projects.

“For example, Zepto is a client. Swiggy is solarising its warehouses and dark stores, and we have recently solarised an ID Fresh Food factory. So, we do have clients in this segment opportunistically, but our primary focus remains residential,” Mishra said.

According to the co-founder, the company has already crossed ₹1,000 crore in annual revenue, growing by more than 100% year-on-year. More than 90–92% of its revenue comes from the sale and installation of solar panels, while the remaining 8–10% comes from long-term after-sales service contracts.

On supply chain management, Mishra said the company maintains around 45 days of inventory, while procurement contracts for panels are typically locked in for nearly 12 months to mitigate commodity price volatility.

“Our customers pay us upfront, while our suppliers provide us with 90 days of credit, and we maintain 45 days of inventory. As a result, we operate with a negative working capital cycle,” Mishra said.