Chamath Palihapitiya, a former employee of Facebook and a prominent figure in the financial world, is once again attracting attention with a $1.3 billion investment deal involving a Special Purpose Acquisition Company (SPAC) and Private Investment in Public Equity (PIPE) focused on Sunlight Financial, a solar energy financing firm.

Sunlight Financial operates as a lending institution, offering financial solutions to solar installers. These solutions enable installers to provide homeowners with loans for funding solar power and battery systems, as well as other home improvement initiatives.

This investment could potentially signal a recurrence of the speculative financial conditions reminiscent of the 1920s, potentially preceding a significant downturn in the global financial system. However, the involvement with Sunlight does possess a degree of rationale.

This is due to the favorable conditions supporting a business focused on providing increased access to solar energy, energy storage solutions, and upgrades for energy efficiency.

The investment, made in conjunction with firms such as Coatue, Franklin Templeton, and BlackRock, establishes a valuation of $1.3 billion for the lending company. This represents a substantial figure, though not excessively high, particularly considering Sunlight Financial’s historical funding of $705 million, as reported by Crunchbase.

As Alex Wilhelm previously pointed out, Sunlight Financial was likely to pursue public market opportunities in the near future, given its consistent financial performance – even throughout the challenges presented by the pandemic:

Sunlight Financial also benefits from being a publicly accessible investment within the renewable energy sector, a space currently characterized by limited availability and strong demand from institutional investors.

Throughout 2020, significant capital was directed towards supporting businesses dedicated to lessening the impacts of climate change and slowing the rate of global warming.

“Commitments from the industry to address climate change risk are giving investors confidence that there is growing support among leaders to enact change,” explained Richard Manley, Managing Director and Head of Sustainable Investing at CPP Investments, in a past interview. “Public markets recognize that the innovative transition solutions within established companies or through venture capital investments haven’t provided public equity investors with the targeted opportunities they seek.”

The introduction of Palihapitiya’s newest SPAC suggests this trend will likely persist into 2021. As Rob Day, a long-term investor in climate technology, communicated last year: