Government incentives from Germany have been helpful, but the situation is not as simple as that. Since the solar industry is still in its infancy in Mexico, consumers there are still not well-versed in the technology, and the market is still relatively fragmented.

Two business owners saw an opportunity there.

Edoardo Dellepiane and Raffaele Sertorio were hoping to launch a new company a few years ago. The Italians arrived in Colombia soon after the government and FARC signed a peace deal, having been on something of a world tour. There, they established Cocinas Ocultas, a ghost kitchen firm that Travis Kalanick's CloudKitchens swiftly purchased. Before relocating to Mexico for another CloudKitchens project, they first moved to South Korea to restructure CloudKitchens' operations there.

The two took a short break from CloudKitchens in March 2022 before starting something new. Having always been interested in climate technology, Dellepiane and Sertorio finally focused on solar energy where they lived in Mexico.

Their ability to think clearly was aided by both the strong Mexican sun and the expensive electricity in the nation. "Tariffs here are higher than in California, at least for a segment of the population," Sertorio stated. Moreover, installation expenses were reduced and permission was simpler. It appeared obvious to use solar power.

However, the uptake of solar power was trailing behind, particularly among small and domestic businesses.

Dellepiane and Sertorio found that a significant portion of the tasks were completed by small installers, which led to inconsistent outcomes. Some had installed solar barely functionally, and some had little knowledge with the technology. Others had skill, but they were overworked between pricing and installs. They would quote you and then take no further action. Stated differently, there existed enough opportunities for enhancement.

Thus, the two established Mexico City-based Niko, a solar installation business. Up until now, the startup has been running covertly. TechCrunch has exclusive knowledge that the business has raised a $3.3 million seed round at a post-money valuation of $16 million.The round was led by Picus Capital and 468 Capital, with many other VCs and angel investors taking part.

At first, Niko is concentrated on selling and installing solar panels for homes and small businesses. Customers' concerns are addressed in their pitch and procedure: there is no money down, energy bill reductions are promised, and Niko will remove the panels at no cost if customers are unhappy.

If operating a venture-backed firm as a solar installer in Mexico seems unfeasible, Niko's investors mention Enpal, a German solar installer with $957 million in funding and a $2.6 billion market cap, according to PitchBook. Yes, Picus was an early supporter of Enpal.

Niko isn't assured a smooth ride, though. According to Dellepiane, solar sales cycles in Mexico are typically lengthy. After receiving a quote, customers sometimes take a few weeks to consider it and discuss it with friends and family. Niko follows up with clients via WhatsApp, SMS, or email in order to sustain the relationship, "nurturing the clients through the entire decision process," according to Dellepiane. We have been there the entire time when they are ready, and we have found that this increases the conversion rate.

At the moment of signing the documents, Niko handles all of the finance internally. According to Sertorio, there aren't many banks in Mexico that will lend money for tiny solar projects. Interest rates are high and approval processes are drawn out.

According to Niko, small business customers might save up to 20% and residential users could save up to 40% on their monthly power expenses. Similar to how power purchase agreements operate in the US and other countries, the firm generates revenue by keeping a share of the savings on energy bills. According to Sertorio, the systems would pay for themselves in roughly two years, and the clients will own the panels after seven.

The company hopes to win other home electrification contracts, such as batteries, EV chargers, and water heaters, if it establishes a presence in the solar industry.

Niko is pursuing big businesses to provide their service as an employee benefit and banks that may like to increase the environmental sustainability of their mortgage portfolios in order to gain clients. It's also getting close to the property managers in charge of gated communities.

In the end, Niko is making an effort to tackle the difficulties that solar energy has encountered in Mexico, including lackluster installations, hesitant clients, and expensive financing. That's a lot for a startup to handle, but if it succeeds in doing so, it will have lots of room to grow.