July 2017
Vol 5 | Issue 131

Q&A with Bryan Birsic

Co-Founder and CEO of Wunder Capital

Principal Series:

Family Office Insights sits down with Bryan Birsic, Co-Founder & CEO of Wunder Capital, to discuss a simple way for accredited and institutional investors to invest in, diversify, and optimize portfolios in the solar industry.

Family Office Insights is a voluntary, “opt-in” collaborative peer-to-peer community of single family offices, qualified investors and institutional investors. Join the community here www.familyofficeinsights.com

Tell us about your background and your company, Wunder Capital.

Prior to becoming a Co-Founder and the CEO of Wunder, I started my career in management consulting and private equity investing for Fortune 500 companies at Bain & Company. I then moved on to Village Ventures, where we focused on early-stage financial technology companies. Notably, we led early investments into commercial lending market leader, OnDeck Capital, during my tenure. My shift from Bain to start-ups happened when I noticed that the biggest changes in the world were coming out of the technology sector; up until then, I had been exclusively on the investor side, but after meeting hundreds of passionate entrepreneurs throughout my journey, I ultimately got the itch to be one myself. Along with my finance background, I’ve built and led several companies that brought a software approach to new markets, most recently at SimpleReach.

Dave Riess, Wunder’s Co-Founder and CTO, was already in energy tech before Wunder’s inception. One day he shared with me the large, underserved, highly financeable solar market that he came across as a researcher for the Lawrence Berkeley National Laboratory, where he worked on software systems and communication protocols aimed at modernizing the nation’s electric infrastructure. The commercial solar energy market had all the right parts to be an incredibly investable business, but no one was going after it in a big way because the technology to service it didn’t exist. So in November of 2013, Dave, Sam Beaudin (our third cofounder) and I founded Wunder, a financial technology company based out of Boulder, Colorado, which is aimed at transforming solar financing. Wunder develops and manages solar investment funds by leveraging its national partnership network, tested processes, proprietary underwriting framework, and best-in-class online investment portal. We actively manage everything, from the sourcing of commercial solar opportunities to the underwriting, contracting, and installation of each project. Once a system is live, Wunder then manages the ongoing operation, maintenance, billing, and distribution of proceeds to investors. Wunder has won the U.S. Department of Energy’s 2014 Sunshot Challenge, as well as, COSEIA’s 2015 Summit Award for our work automating solar financing.

Who is your target audience?

Wunder works with two different parties: organizations interested in ‘going solar’, and investors.

To source organizations that are interested in ‘going solar’ (e.g.- businesses, schools, and municipalities), we’ve developed a solar professional partnership network of more than 100 installers and developers that are spread across 27 states. These partners have sales forces to prospect customers within their respective regions, but they also have the resources to build the solar systems once project finance is secured. Naturally, we’re very picky with who we choose to work with; because of this we have a 30% approval rate for our solar installers. Once a solar partner has a prospective customer, they can apply for project finance by submitting a solar loan application through Wunder’s online portal. Wunder’s sweet spot has been deals ranging from

$300K to $2 million, a largely overlooked and underserved space by the large-scale project finance industry.

With regard to capital, we work with both individual and institutional investors. Over the past couple of years, Wunder has become the leading solar crowd-investing platform in the U.S. by developing a best-in-class online investment portal. We cater to accredited individuals by offering diversified solar investment funds that meet their impact investment objectives without sacrificing return expectations. In addition to accredited individual investors, we also work with institutional investors in a more white-gloved capacity. These institutional partners range in size from family offices, to hedge funds, specialty finance firms, and banks.

What are some of the challenges you face in this market?

Because the bulk of solar financiers overlook the sub-million dollar commercial market, we’re relatively unencumbered as it relates to originations. Obviously solar has become significantly more popular and mainstream since we started in 2013. Between industry growth trends and low competition, our loans are in high demand. We are focusing on expanding our investor network to support this growing opportunity, but our challenge is naturally to grow our lendable funds in conjunction with our loan originations to enable more successful solar installations.

Who are your key competitors and how are you different?

Wunder is transforming the solar financing space, making it more efficient, transparent, and customer-friendly. There’s a relatively healthy solar finance market for projects larger than $2 million, and you’ll see that in the number of financiers servicing that segment. That said, they don’t have the technology or dedicated software teams to service the sub million-dollar market like we do. Wunder’s average deal is ~$500K, which is a hard deal size to service profitably if you’re operating in a manual fashion like the rest of the industry.

At Wunder, we’ve developed proprietary software and automated processes, which allow us to complete financings in days, rather than the industry-standard of months. This gives us a significant competitive advantage when competing with other financiers for great projects, and it helps ensure that our underwriting process is effective and consistent. From automating data collection for potential investment opportunities, to electronic signatures and digital document management, to seamless billing and return distributions, Wunder’s engineering team is pulling cost and time out of the solar financing equation. Not only can we finance solar projects more quickly and efficiency, but our software-enabled approach allows us to better vet, track and monitor our portfolio. This allows us to reduce the cost of credit and pass those savings back to investors.

To accomplish all of this, Wunder has assembled a solar project team comprised of Department of Energy researchers, seasoned project developers, and finance industry leaders. We understand the hard science, the practicalities on the ground, and the risk evaluation processes, as members of both the National Renewable Energy Lab’s solar financing committee, and an industry-leading solar evaluation group, TruSolar®.

How are you changing the landscape of your industry?

Our proprietary technology allows us to service smaller deals and make solar an accessible investment for all. We believe that solar energy systems are great revenue-generating assets: these systems provide cheap electricity from the sun and they’re incredibly easy to maintain. As a key player in the rapidly changing renewable energy landscape, we believe that solar will sit alongside other asset-backed securities such as real estate within the next 5-10 years.

Wunder takes away the uncertainties of investing in a new market by viewing solar infrastructure as collateral, and making it seamless for investors to put capital to work in a diversified clean energy portfolio. Wunder investors are hitting a competitive return threshold on the risk spectrum while helping to promote sustainable energy in the world. We occupy this interesting space of social good without sacrificing return expectations; we think it’s a great balance.

Who is your ideal investor? How much capital are you looking to raise?

Our ideal investor is someone who understands our risk evaluation methodologies and is excited to deploy capital through the systems and processes that we've developed to capitalize upon this opportunity. Our investors get excited about what this will all look like 10 years from now, but right now it’s about wanting to be a part of the renewable energy play early on and liking asset-backed debt.

In the last 4 years, we’ve scaled Wunder’s portfolios and developed a strong track record, which has allowed us to work with sophisticated Family Offices and institutions across the United States. Many of these investors have an impact mandate and want to allocate their funds towards socially responsible ventures, or simply divest from hydrocarbons while keeping an allocation to energy. We also work with many investors that are interested in the energy market more broadly and recognize that our target returns can be both lucrative and competitive when compared to traditional energy opportunities.

Currently, Wunder’s Income Fund and Term Fund are available to high net worth individuals, Family Offices, and other financial institutions through our online investment portal. While these funds have a minimum investment of $1K, we have quite a few investors with substantial positions.

In addition to Wunder’s Income Fund and Term Fund, we have recently developed a new fund that is tailored to the needs of qualified investors. This fund is targeting a $50MM raise, is available only to Qualified Purchasers, and has a $1 million minimum investment.

Across the board, our investors are extremely excited by solar’s growth prospects over the coming decade or two as it penetrates more and more of the 5.9% of GDP that goes to electricity generation.

What’s your mission?

At Wunder we work to accelerate the deployment of clean energy. We’re pushing solar forward precisely where we see adoption moving the slowest, the commercial market. A market in which economically-viable clean energy projects are not being built for lack of financing. In the future, as economically-viable clean energy expands beyond solar (e.g. storage,) we’re excited to finance those technologies as well.

What’s next for you?

We’re focused on proving our financing platform at scale, and building as much solar as possible over the next five years. No one has done sub million-dollar solar at the scale we have already achieved, and we have ambitious plans going forward. We have the most data on this market, and we’re using it to continue to improve our lending and work with more and more sophisticated investors. Solar’s adoption will be a 20 to 25 year journey, and one where we think being a little ahead of the curve will pay dividends.

Bryan Birsic

Bryan Birsic currently serves as the President and Chief Executive Officer of The Wunder Company. He also is a co-founder of The Wunder Company and a member of The Wunder Company’s Board of Directors. Mr. Birsic has raised more than $75mm of private capital financing over the past decade in roles as both an executive and on Boards of Directors. Prior to co-founding The Wunder Company, Mr. Birsic consulted Fortune 500 companies at Bain & Company’s New York office and invested in financial technology startups at Village Ventures, a prominent NYC-based venture capital firm. Mr. Birsic holds a degree in political economy from Williams College.