Wunder Capital Closes $112 Million Fundraise for Commercial Solar

Big banks take note: The raise proves the viability of small commercial solar.

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Commercial solar financier Wunder Capital announced Wednesday the close of its Series B financing, with a $112 million equity and debt raise led by New York investment firm Cyrus Capital Partners.

Cyrus Partner John Rapaport will join Wunder’s board of directors. John Witchel, co-founder of peer-to-peer lender Prosper, will join the company’s advisory board.

Wunder said the raise typifies a “natural progression” in alternative lending that starts with funding from pure-play retail, moves to registered investment advisers, and eventually works its way up to big institutional investors.

“Closing this big facility with Cyrus is us announcing ourselves into this institutional investor space,” said Wunder co-founder and CEO Bryan Birsic. “For us, this is our announcement — and, frankly, commercial solar’s announcement — to the really big banking world that smaller commercial solar is real and Wunder is real. I think this puts us on the map.”

According to GTM Research Senior Solar Analyst Michelle Davis, Wunder’s new source of capital makes sense within the context of the commercial space. 

“The commercial solar segment has been attracting more diverse sources of capital as of late,” said Davis. “This raise from a private equity firm is in line with that trend.”

In the past, commercial solar has faced difficulty getting the financial footing of other market segments. Wunder Capital is among the companies aiming to capitalize on the underdeveloped sector and streamline the complex process. Through a roster of partners Wunder builds a balance sheet for developers, helping them circumvent the arduous challenge of finding loans. Wunder also manages the project after construction.

Since its founding, the company has grown substantially. Davis said Wunder expanded its portfolio “by an order of magnitude” last year, with expectations to do the same in 2018.

“This recent raise points to their intent to fulfill that vision,” she said.

Early in the year, Wunder told GTM the company is seeing demand from developers for projects worth $1.8 billion in 2018. Now, Birsic said, “We are blowing that number away.”

Wunder expects to see demand for over $2 billion in projects this year. The company can only finance about 10 percent of that number. 

Last year, Wunder increased its project originations tenfold, and Birsic expects the growth trend to continue.

According to Birsic, the tariffs will not be a major hindrance. He expects the tariffs to increase project development costs by 4 or 5 percent in the short term. “The only thing the tariff has done is hit pause for six months,” he said.  

In the meantime, Wunder plans to use the fundraise to grow its staff from 16 to 40, open a Denver office, and expand its lending products and project support.

The company will also continue investigating new partners that offer similar flexibility as the investment from Cyrus. 

“We are very much working to add new partners to expand the number of products we can bring and grow the solar market as much as we can,” said Birsic.