Accelerating Brighte’s pathway to profitability
Today we informed our team of the decision to close business units working on longer-term non-core projects and to focus solely on our core Australian finance business.
09 September 2022
Today we informed our team of the decision to close business units working on longer term non-core projects and to focus solely on our core Australian finance business.
As a result, there will be a number of people changes in our team. We know this outcome will have very real impacts on those it affects - and it's not something we’ve undertaken without deep consideration.
We made this decision to accelerate our pathway to becoming a sustainable business, better positioning Brighte to navigate current market conditions and ensuring we are well placed to meet the growing need of making homes sustainable, now and into the future.
What these changes mean
The outcome of the decision today will see us ceasing non-core growth initiatives with longer term horizons - including offshore expansion plans, the development of non-core tech platform capabilities and stopping other longer term growth experiments. The people working in these teams, supporting these teams and also managing these teams were impacted. As a result, approximately 58 of our full time team members were made redundant today, reflecting a 27% reduction to our Australian team.
CEO and Founder Katherine McConnell said “We’re sad to farewell our colleagues and today’s difficult decision is no reflection on their passion and contribution to Brighte. I know many joined Brighte because they are big believers in our mission and this weighs heavily on me. We appreciate it’s never easy to make roles redundant and have tried to be as empathetic as possible to those of our team that have been impacted. But ultimately, we understand the very real emotional and human impact this change has - and will have - on our people”.
Going forward, Brighte’s core business of sustainable home finance - the engine room of Brighte - will be our primary focus. Brighte’s core finance business provides point of sale finance via our network of over 2,200 vendors to households for solar, batteries, home electrification and home improvements.
While minor changes have been made where operational efficiencies can be found, our core business is largely unimpacted by today’s changes.
There will be no impact to the products or services we currently offer our customers, partners or vendors as a result of today’s announcement.
Our sustainable finance platform also enables partners and government to distribute sustainable finance via our national vendor network. Growing our core capabilities here is where we will invest for future growth.
Why we made these changes
As a business, our mission is to make homes sustainable.
This means we seek to make them more self-sufficient, so as far as possible their needs are met by their own energy generation. But at Brighte we also seek to become a sustainable business ourselves. What this looks like is a business that generates enough revenue to cover all its operating costs and is not dependent on third party investment to pay for these activities.
The revenue our Finance business currently generates does not cover the activities of the long term non-core ventures - which do not generate material revenue today nor are they likely to in the next 18 months.
In this changing economic landscape, the pathway to profitability for these non-core activities has extended and therefore we are making the decision to stop funding them rather than request additional equity to cover their costs.
In making this decision, we have accelerated our pathway to becoming a sustainable business - to break even and to profitability.
We believe solely focusing on our core finance business from today will best position Brighte for the future and best support our customers, vendors and partners as they transition to a net zero economy, as well as deliver long term value for our shareholders.
Focusing on our Finance business
Our finance business has been the growth engine of our past and will be in the future.
It has so far enabled over 145,000 households access to over $1.2bn of finance for sustainable equipment including rooftop solar, solar hot water, home batteries and Electric Vehicles. Solar financed by our customers has so far created over 740MW of installed generation capacity, nearly half that of the Liddell power station. This solar energy generated is equivalent to over 1,000,000 tonnes of CO2.
In June 2022, we received double the amount of customer credit applications compared to June 2021. We also grew our market share and ended the last financial year having financed approximately 12.6% of all Australian residential solar installations.
Brighte has a portfolio of strong customer credit and our customers’ average credit score is 700+ which is considered to be one of the highest in the Australian unsecured consumer lending market. Further, our loan book continues to perform strongly and more than 99% of our customers pay us on time.
Our customers are making considered purchases for their homes. Katherine McConnell said “Buying solar for your home or making it more sustainable is not simply a discretionary spend, it is different to other purchases a household undertakes. It is a well-considered investment with a payback and that is reflected in Brighte’s strong portfolio of customers who largely always make their repayments on time”
Given the rising cost of funds, Brighte has repriced its financial products to both its vendors and customers and is seeking to maintain its margins in a higher interest rate environment.
Independent research commissioned by Brighte shows that on average our customers save $1,000 a year when they use Brighte to pay for their home solar. “Brighte’s offering will arguably be more meaningful to our customers in a rising interest rate environment as we enable faster access to sustainable homes and offer a true hedge to the household budget being squeezed by rising energy bills and cost of living pressures” said Katherine McConnell.
While today we are sad to farewell our colleagues, we are motivated by our strong belief in the need for decarbonisation in Australia, a global megatrend which is just getting started.
Households contribute approximately one third of domestic carbon emissions and will need to make changes to how they consume and utilise energy in their homes, in order for our country to meet our national emission reduction targets.
Brighte has a big part to play as the financier of this green transition for households, supporting vendors, partners and governments in making sustainable homes affordable and accessible.
The decision today accelerates our pathway to profitability, places Brighte on a sustainable footing and enables us to continue our all-important mission of making every home sustainable - at a time when it is needed most.
Nigel Freitas | Head of Corporate Affairs | email@example.com