Tech moguls back GoodLeap’s green housing push with $ 12 billion valuation

The new capital has made the low-key Barnard the “billionaire next door” in his Austin, Texas neighborhood, according to a person who knows him. It also marks a comeback for the 49-year-old, who stepped down as chief revenue officer of SolarCity in 2016 when Tesla Inc.

took over the financially troubled company.

The U.S. solar industry has been plagued by false starts, but growing demand for energy efficient housing and environmentally friendly investments has turned the tide, Barnard said.

GoodLeap has grown into the world’s largest rooftop solar finance company in less than two years by developing new technology to connect the lenders, consumers and sellers who install the panels, according to bankers and investors. The goal is to replicate in just a few years the modernization that took decades to unfold in the mortgage market.

GoodLeap provides lenders like banks, insurers, and hedge fund managers with software that can track the finances and customer satisfaction of each borrower. An app connects installers with lenders to get loan approval during sales calls to homeowners, who can use a different app to track power generation, cost savings, and power sales to their grids. local distribution. The company is on track to get $ 5.2 billion in loans this year, up from $ 3.3 billion in 2020, a person familiar with the matter said.

Now, Mr Barnard wants to embark on home improvements ranging from heat pumps to energy efficient windows and artificial lawns, funding homeowners’ efforts to adapt to power outages, heat waves and natural disasters caused. by climate change.

Mr Barnard and GoodLeap chairman Tanguy Serra, also a SolarCity veteran, are trying to grow before more established financial institutions turn to space. Rocket Cos Mortgage Company. in August announced a tech-driven push for “green home energy solutions” financed by loans.

“The company that wins is the company that brings all the technology together,” said Barnard, who complements his speech with a Silicon Valley dialect like, “I want to double-click on it.”

GoodLeap needs the money to stay ahead and, for now, Mr Barnard is staying away from public stock markets and their review and reporting requirements. Instead, he’s courting elite tech entrepreneurs.

Mr. Tosi, investor and former CFO of Airbnb Inc.,

met Mr Barnard in 2018 at a ski event in British Columbia hosted by venture capitalist Antonio Gracias. On a hike, Mr Barnard impressed Mr Tosi with his interest in building a business focused on big issues such as sustainability, Mr Tosi said. He invested in Mr Barnard’s business in 2020 and joined GoodLeap’s board of directors this year.

Mr Barnard connected with Mr Dell after moving to Austin, a town Mr Dell has long called home and which increasingly attracts emigrants from Silicon Valley like Tesla founder Elon Musk . This summer, Mr. Dell and Mr. Barnard took a walk along Lake Austin to get to know each other. They discussed a potential investment in GoodLeap, the company’s charitable affiliate, GivePower, and the relative merits of raising capital privately or through a takeover bid.

Weeks later, Dell placed the largest order in a private sale of $ 800 million of GoodLeap shares. The funding round valued the company at $ 12 billion, up from $ 4.4 billion in December and $ 1.5 billion in March 2020, a person familiar with the matter said.

One of the reasons for the recent capital increase, Mr Barnard said, is that GoodLeap is looking to merge or acquire other solar finance companies.

Mr. Barnard knows the dangers of public listing. SolarCity’s inventory more than tripled to around $ 85 from 2013 to 2014, with the company dominating the solar panel installation, which it leased to its customers. The company hosted annual events for thousands of employees in Las Vegas, culminating in an awards show where Mr. Barnard performed freestyle raps praising the winners.

But SolarCity borrowed to fuel growth, including a costly expansion in manufacturing solar technology, and its net loss nearly doubled in 2015 to $ 769 million, according to the company’s annual report. The stock fell to around $ 20 before the Tesla takeover that triggered Mr Barnard’s departure.

Mr Barnard, who was raised in Creve Coeur, Missouri by a single mother with three jobs, rallied around a mortgage company called Loanpal and began to orient the business towards solar panels. . The new venture avoided SolarCity’s vertical integration strategy and instead built a software-driven marketplace connecting industry participants, analysts and investors said.

“The magic of what they did was they mechanized the whole process,” said Rob Camacho, co-head of structured credit at Blackstone Inc. The company bought over $ 500 million. dollars in loans through GoodLeap, a person familiar with the matter. noted.

An IPO would have given GoodLeap access to hundreds of new investors. Funds raised through traditional IPOs, excluding direct listings or specialist acquisition companies, have already exceeded the totals of the previous year. Major stock indexes remain close to record highs and investment funds are overflowing with cash and eager to buy into growing and profitable companies.

This summer, banks offered GoodLeap a potential IPO valuation far exceeding the $ 12 billion it achieved by selling shares privately, people familiar with the matter said. Mr. Barnard turned to his mentors to help him decide what to do.

Mr. Tosi texted Mr. Barnard: “Your business, your terms, your time, your way. “

Write to Matt Wirz at [email protected] and Corrie Driebusch at [email protected]

Corrections and amplifications
GoodLeap’s charitable affiliate is called GivePower. An earlier version of this article misnamed the charity GoodPower. (Corrected October 13)