A Baltimore company that finances solar projects has made its second acquisition in the past six months to take advantage of a buyer's market for startup companies.
Sunstone Credit said Thursday that it acquired ORKA Finance, a national commercial solar lender. Sunstone expects to add more customers interested in installing solar panels by adding ORKA’s specialty in giving out small loans under $500,000 for construction projects. The majority of the seven-person staff at ORKA will join Sunstone as either employees or advisers, Sunstone CEO Joshua Goldberg said.
Sunstone used part of a $20 million venture capital raise it completed last year to finance the acquisition. Sunstone provides financing for companies that want to install solar panels on commercial buildings. The company claims its underwriting is faster than traditional banks and that its loans are also more flexible, with five- to 20-year terms.
The deal to buy OKRA comes just months after the Baltimore firm participated in the acquisition of Sunlight Financial, a publicly traded company, in October. Goldberg co-founded Sunlight Financial in 2014 but left the firm a few years before it went public through a $1.3 billion special purpose acquisition company (SPAC) deal. The two companies will maintain separate operations with the 130-person Sunlight operating as a subsidiary of Goldberg's firm. The public company also finances solar projects but focuses on residential projects for homeowners instead of commercial industries like Sunstone.
The firm found itself in financial trouble because of rising interest rates, leading to shareholder lawsuits against Sunlight. The company filed a petition for reorganization under Chapter 11 bankruptcy to help facilitate the acquisition by Sunstone and several other investors.
Sunstone plans to continue to pursue acquisitions to take advantage of the low evaluations that many tech startups face.
“There's a lot of companies that have good people and good ideas that just don't have enough cash,” Goldberg said.
