Enphase Energy, which makes solar microinverters, is in the process of raising $51.5 million in a combination of equity and debt, according to a filing, and has closed $14 million of that round. The company filed the fund-raising form just a week after it announced it’s aiming for a $100 million IPO.
Sometimes when a company ends up raising money after filing an S-1, it cancels its IPO plans, but sometimes it just needs the money, so they take both fund-raising options. Enphase was clear in its S-1 that it needed to raise more money in addition to its IPO to pay for R&D, expansion, and acquisition plans, given it’s operating in a rather competitive marketplace, competing with large suppliers and sometimes the panel makers themselves.
Enphase makes solar microinverters, which are small devices that sit on a solar panel and convert direct current from the solar panel into alternating current for use. Inverters are a must-have piece of equipment in a solar system, but solar panel companies traditionally use a large single centralized inverter to convert current. Enphase, in contrast, sells smaller, distributed microinverters, which it says are more reliable, and can monitor and adjust the power output of individual panels.
While microinverters are still more expensive than central inverters, more and more companies are starting to build and sell them. Startup SolarBridge just raised $19 million to push its microinverters. Central inverter maker Power-One recently launched a microinverter, and SMA Solar Technology expects to do the same soon.
So Enphase needs to grow, and fast. It’s already on a pretty strong sales trajectory. The company shipped 11,000 units in 2008, 126,000 in 2009, 414,000 in 2010, and for the first three months of 2011, shipped 123,000 units, or almost the same as it shipped for the entire year of 2009.
However, the company is losing money during its expansion phase. The company lost $9.29 million for the most recent quarter, lost $21.78 million for the full year 2010, and as of March 31, 2011, had accumulated a deficit of $65.8 million. Compared to revenues, Enphase generated $18.07 million in revenues for the most recent quarter, up slightly from $11.59 million in revenues from the same quarter a year earlier. For the full year 2010, Enphase brought in $61.66 million in revenues, up from $20.20 million in 2009.
Enphase closed a $63 million round in June last year, and had raised $104 million by the end of 2010 before this fund-raising.