Solagri Energy

Solagri Energy

The Opportunity

New Zealand is at the start of an energy transformation as it moves away from fossil fuels toward electricity as the primary source of energy to power the transport and industrial sectors.

The dairy sector, with roughly 11,200 dairy sheds, is a large consumer of electricity in New Zealand. The energy at a dairy shed milks the farm’s cows, cools the milk, heats the water to wash the shed, provides light and in rotary sheds moves the entire herd through the milking process automatically.

Solar generation, energy storage (batteries) and electric vehicles (EVs) will revolutionise our rural economy and electricity system. In particular they will revolutionise dairy farming due to these farms’ enormous reliance on electricity. To maximise gains from these disruptive emerging technologies, Solagri is working to establish a centre of excellence in rural solar and farm battery design. Based in Canterbury, the focus is on the development of robust, flexible systems that suit New Zealand’s rural conditions. To this end, our recent inclusion in the Orion Energy Accelerator will enable us to build on existing relationships, tap into expertise and develop new partnerships and alliances.

Our Solar-As-A-Service Offering to Farmers

The Solagri System is designed to be deployed on a dairy farm as a service with no capital invested by the farmer. The system has the ability to supply all of the dairy shed’s energy requirements under a contract that aims to reduce electricity costs for farmers, increase farm energy resilience, and improve the farm’s sustainability; all while supporting rural electricity networks and NZ’s transformation to a low-carbon economy.

By remaining grid connected, Solagri is able to offer farmers a compelling solar energy service that is competitive with the incumbent government owned generator-retailers (Gentailers).

The benefits to farmers include:

• No capital up front - farming is a capital intensive business. With a Solagri solar array there is no capital outlay required from the farmer. We build and manage the entire solar array and sell the energy generated to the farmer or back to the grid. We also supply any additional energy required by the farm from the grid.

• Strength in numbers – we’re building an electricity buying group that will give farmers real strength in numbers. As Solagri’s customer base grows, our purchasing power in the wholesale energy market will ensure the price farmers pay for electricity derived from the grid remains extremely competitive.

• Competitive pricing - in many cases we can immediately give farmers a better overall deal than they’re currently getting. 

• Price stability - a contract with Solagri will allow the farmer to lock in the price they pay for the electricity generated by the array for 20 years (pegged to CPI). Eliminating their exposure to future price shocks.

• Farm sustainability - farmers tell us solar gets a big tick on their Farm Environment Plan (FEP).

The Team

Our experienced team has a wide range of expertise in electrical engineering with a focus on renewable energy, finance, business development and agri-business. A number of team members are based off-shore, working on significant renewable energy projects in Australia, Brazil and the US.

Through our team we have direct access to some of the worlds leading manufacturers and insight into international trends and policy outcomes. The team includes:

Managing Director

Peter Saunders - Peter is a co-founder of Solagri and runs the business day-to-day. Prior to Solagri, he spent 20+ years working in the wine sector. He has built several award-winning export wine brands and project managed the development of a winery and several vineyards. Peter has recently worked with a number of start-up businesses including Puro NZ, consulting to them on strategy and business development.

Directors

Hamish Hutton - A co-founder of Solagri, Hamish is a leading B2B marketing manager and consultant, with considerable experience in marketing to dairy farmers, Hamish ran the marketing and business development for Fonterra’s launch of the successful MyMilk brand and won recognition as the TVNZ Export Marketer of the year with Tait Electronics.

Luke McDonald - Based in Brisbane, Luke has over 20 years’ experience in the commercial and legal aspects of major solar projects. Luke is a Co-Founder and the CEO of Renewable Energy Partners, an originator and developer of large scale renewable energy projects across wind, solar PV, hydro and storage. Luke is an Alumni Board Member of Bond University Limited, and an advisory board member of a number of start-up energy related businesses.

Daniel Saunders - Dan is a New York based AVP/Partner with Cognizant Technology Solutions. He has an MBA from Melbourne Business School and 25+ years working across a broad range of sectors including commercial forestry, farm forestry investment and management, property development, business strategy consulting and complex program delivery.

Advisors

Frank Geoghegan - Frank is an independent engineering consultant with extensive experience in the Australasian Electricity sector. Formerly with ECNZ and then Contact Energy, more recently Frank has worked on numerous distributed energy projects and consulted to Transpower on their battery strategy. Frank has an electrical engineering degree and an MBA from Deakin University.

Marco Stacke Silva - Originally from Brazil, Marco has a degree in electrical engineering and an MBA from Melbourne University. Marco is a renewable energy expert with 20+ years’ experience offering a unique mix of skills in project finance and development, construction management and the delivery of utility hydro, wind, and solar projects on 3 continents.

Dave Williams - Dave is an advisor to numerous corporates, not-for-profits and academics on solar, battery storage technology and project finance. He has held various senior management roles including Chief Commercial Officer for CalCom Energy, a leading Californian agrisolar specialist. A Sir Edmund Hillary Fellow, Dave has a degree in mechanical engineering from Georgia Institute of Technology.

Tim Saunders - Tim has a wealth of experience in governance, strategy and business development. He has held directorships with a number of Crown owned and listed companies including Contact Energy, Solid Energy and Pyne Gould Corporation. Tim advised NZ Treasury on the reforms of both the Electricity sector and the Dairy sector.

Willy Trolove - Willy is a communications and stakeholder engagement specialist in the infrastructure sector. He has a degree in civil engineering from Canterbury University and has worked on large engineering projects in NZ and the UK. Willy was director of the government research and communications unit for Rt Hon John Key. Most recently he has contracted/consulted to MBIE and Waka Kotahi NZ Transport Agency.

Our Journey So Far

Solagri was founded in 2018 by a diverse group of people with expertise in renewable energy engineering, agriculture, finance, marketing and land development. The team spent three years researching and developing the optimum renewable energy system for New Zealand dairy farms - in terms of performance, durability, cost and ease of construction. 

In early 2020 Solagri received funding assistance from MainPower New Zealand to develop and test an industry-leading distributed energy system for dairy farms. This proof-of-concept (P1) system which is comprised of a 58 kWp solar array coupled to a 120kWh grid connected battery, is operating today on a dairy farm near Rangiora, North Canterbury.

The system is the only array in New Zealand to employ several innovative technologies that make our arrays faster to deploy, more durable and higher performing over the long term. Initial results from P1 have been successful, generating solid, on-target revenues for the business.

Since late 2020, we have been engaging with farmers, selling the concept of capital-free solar as a service. We now have a growing list of enthusiastic soon-to-be customers who have signed heads of agreements with Solagri in anticipation of the successful completion of this capital raise.

Exit Strategy

The directors are primarily focussed on building the business. However, potential routes to exit include:

• full or partial in-trade sale to an incumbent energy company.

• stock exchange listing (IPO).

Share Liquidity

The directors are considering different share registry options for the company with the aim of enabling shareholder liquidity in the future.

A Note from PledgeMe

We have completed Veda checks on the company, Solagri Holdings Limited, and their Directors, as well as Google and Insolvency checks. One Director, Peter Saunders, has been noted to have one default on his credit report. There were no other adverse findings. 

Offer Details

Explanation of valuation:

Due to the steep growth curve of the company and the lack of forecast debt, an EBITDA multiple is not an appropriate method of valuation at this stage in the company’s lifecycle. However, there are numerous valuation methodologies that give an indication as to the approximate value of Solagri:

Using a Revenue Multiple is a commonly used method to value private start-up companies, particularly in a crowdfunding context, and a multiple of four to 5 times revenue in the third year of operation is commonly used. Research by Deloitte in 2017 showed that revenue multiples in the renewable energy sector in 2016 averaged 6.3 in Europe and 4.8 globally. On these multiples, Solagri Holdings could be valued at between $31,973,879 and $41,965,716.

Projected revenues in 2024 (FY3) are $6,661,225. Using a conservative multiplier of 2 gives Solagri Holdings a value of $13,322,450. To align with the number of shares on issue, a pre-raise value of $13,174,269 has been used giving a share value of $1.

Financial Summary

Company Details

Company Name: Solagri Holdings Limited

Company Number: 6624473

Company Documents

Solagri-Investor-Memorandum_final.pdf

(application/pdf, 3.57 MB, uploaded 01 August 2021)

Constitution_of_Solagri_Holdings_Limited.pdf

(application/pdf, 365 KB, uploaded 01 August 2021)

Company_Extract_Solagri_Holdings_Ltd.pdf

(application/pdf, 1.07 MB, uploaded 04 July 2021)

Certificate_of_Incorporation_Solagri_Holdings_Ltd.pdf

(application/pdf, 589 KB, uploaded 04 July 2021)

Director Details