Author: John Tough

Aurora Solar Raises $250 Million to Digitize Solar

Aurora Solar Raises $250 Million to Digitize Solar

The renewable markets are way way bigger than any of us expected… even those of us that are witnessing the growth first-hand. At Energize we are starting to see accelerating growth rates across the portfolio at revenue levels that usually succumb to scale. One of those success stories is Aurora Solar, and they have a big announcement today.

You can read their Forbes coverage here: Solar Design Startup Aurora Solar Reaches Unicorn Status or the Techcrunch coverage here: Aurora Solar Aims to Power the Solar Industry with a $250M Series C

Energize’s blog post is found here and the company’s press release is below.

Funding Round Led by Coatue Signals Market Interest in the Growing Solar Industry

SAN FRANCISCO, May 24, 2021– Aurora Solar, the industry’s leading software platform for solar sales and design, today announced it has closed a $250 million Series C funding round led by Coatue, with follow-on participation from existing investors ICONIQ, Energize Ventures, and Fifth Wall.

In just over two years, Aurora Solar has raised more than $320M. Today’s fundraise underscores the remarkable shift to renewable energy happening in energy markets around the globe, with solar being the fastest-growing source of energy over the past decade. This growth translates into jobs —by 2030, in the United States alone, the solar industry will need to grow from 230,000 to 900,000 people in order to meet President Biden’s goal of carbon-free power by 2035, according to the Solar Energy Industries Association. Software is the key to making solar installations affordable and accessible for both residential and commercial use cases.

Aurora enables solar companies to streamline the solar project lifecycle by making it easy to integrate disparate data sources, design accurate solar installations, and automate complex workflows. Using Aurora, solar professionals can accurately determine how many solar panels will fit on a property, forecast how much energy the solar system will produce, calculate how many batteries are needed for backup power, and show how much money their client will save by switching to solar.

“Our mission is to create a future of solar energy for all. The only way to reach that goal is to make it easy for solar professionals to design and sell solar remotely, and to make it affordable for consumers to understand and access the benefits of solar” said Sam Adeyemo, Aurora’s co-founder and CRO. “This funding will help us accelerate our vision, as more solar companies choose to grow their business using digital and remote solutions rather than manual ones.” 

Since 2010, the install costs for photovoltaic solar have already dropped by 70%, and reducing soft costs (i.e., non-hardware costs associated with going solar) through digital solutions like Aurora offers the biggest opportunity to continue cutting down the price of both residential and commercial projects.

“Residential solar is set to grow significantly over the next decade,” said Jaimin Rangwalla, Senior Managing Director at Coatue. “Aurora has the potential to unlock an inflection in this growth through lowering soft costs, such as installation and permitting. We believe Chris and Sam have proven themselves to be exceptional operators and have built the leading software business in this category. We are excited to partner with them on the next phase of this journey.”

“We see an incredible opportunity to expand the market for solar software and make it accessible to anyone on the team, from sales and marketing to design and operations and more,” added Chris Hopper, co-founder and CEO of Aurora Solar. “Working firsthand with solar professionals in communities around the globe has given us a front row seat to the explosion in the solar market and the economic opportunities it is creating for more jobs, lower costs, and a greener future for us all.”

Aurora Solar will use the investment to expand its product roadmap, continue to attract more talent across all teams, expand sales and customer support, and build its leadership team to help scale the company.

To learn more about Aurora Solar:

  • Register for Empower Solar, our free, virtual event on June 8th and 9th where we bring the solar industry together to share knowledge, expertise and insights. We will also be unveiling some of our biggest products to date here!
  • Visit our career page to learn more about opportunities with our team.

About Aurora Solar Inc.

Aurora Solar is a fast growing technology company that enables solar professionals to remotely design and sell solar and storage projects. Aurora Solar was named Rising Star Company by S&P Global Platts in 2020. To date, over 5 million solar projects have been designed in Aurora globally. For more information, visit www.aurorasolar.com and follow us on Twitter @AuroraSolarInc.

Truck You: Ford & Sunrun vs. Tesla

Truck You: Ford & Sunrun vs. Tesla

I wrote this yesterday for Forbes about the recent announcement between Sunrun and Ford. Fun read, I hope. And the announcement is a big impact in renewables.

TRUCK YOU: The battle royale in mobility

Business development job descriptions tend to be filled with lots of buzz words and are heavy on “strategy”. Most professionals in this position overthink their roles. The fact is that the best business development partnerships are the obvious ones. These are the partnerships that are hiding in plain site. The ones that consumers and industry players both nod about and say “of course”.

This is the case with the recently announced Ford and Sunrun RUN +6.7% partnership. Let’s set the scene:

The script in the automotive world is that Tesla TSLA +4.1% has won the next generation of mobility. The Model S and Model Y are mass-market sellers and Tesla is gobbling up EV market share. Last year Tesla unveiled their “in-your-face” Cybertruck to major fanfare and immediately got half a million (non binding) pre-orders. 

There was even a video of a Cybertruck towing a Ford F-150 to prove the Tesla’s greater torque. Everyone began writing about the demise of Ford’s market share in the truck market.

The only problem? Ford didn’t agree to the regular Teslas script and Ford is fighting back with it’s biggest asset, the F-150. This is the battle royale for transportation in North America:

  • 1 in every 16 cars on the road is a Ford F-150 truck.
  • Last year there were 350,000 plug-in vehicles sold in the US.
  • For comparison, there were 900,000 Ford F-150 trucks sold domestically in 2019. If Ford can electrify this customer interest, the EV adoption curve will step-change.

Ford stayed quiet, focused on their mobility strengths and just last night delivered a game-changing vehicle. They are delivering the Ford name and trust and form factor used by tens of millions to the market… and they are going to win. Unlike other OEM attempts at electric vehicles, Ford designed the vehicle ground-up for the new power source and is delivering a Ford truck without compromise. What will cement their winning position?

**Enter a New Character: Sunrun**

Tesla has the vehicle, the power wall, the solar roof… and other ancillary businesses. It would be a fools game for an incumbent automotive firm to attempt to re-architect their entire business to have the same scope. It would also be easy for a large firm like Ford to want to tackle that on-site electrification challenge. But, Ford didn’t take the bait. Ford focused on their strengths by quietly developing the mass-market EV truck and is deferring to Sunrun to be their electrification partner.

California could avoid rolling blackouts by helping more people install batteries
GRANADA HILLS, CA – JANUARY 04, 2020: Aaron Newsom, left, an installer for the solar company, … [+] LOS ANGELES TIMES VIA GETTY IMAGES

These Ford trucks have 300 mile range and so most people will be charging their vehicle at home. The vehicles will also integrate with the home to be a back-up power supply. How? To deliver a more complete, and higher quality solution to the Ford drives, Ford sought out Sunrun and Sunrun’s power expertise. What a smart move for both parties. Sunrun knows how to deliver consumer-level energy experiences at scale.  Ford owners will get increasingly educated about home electrification and soon be subtle targets for Sunrun solar roof systems.

This new F-150 will put millions of EV chargers into homes. It will build resiliency into our grid. And if 5% of F-150 drivers adopt rooftop solar via Sunrun that will add another 50,000 rooftop solar homes to market each year. That partnership alone could increase rooftop solar installation in the US by 20-30%.

Win-Win for Ford and Sunrun. Battle on, Tesla.

A win for Renewables: SparkCognition acquires Ensemble Energy

A win for Renewables: SparkCognition acquires Ensemble Energy

SparkCognition is a world-class technology company, based down in Austin. The company helps drive growth or expand margin for their customers by leveraging award-winning machine learning technology, proven artificial intelligence systems, and a multinational team of AI thought leaders.

The company has an incredible respect for the customer and looks to create industry-specific customer collaborations to better customize their AI models for industry-relevant use cases and value. Some of those public customer-model collaborations include bp in oil & gas operations, and Nomura and the London Stock Exchange in finance. Perhaps my favorite example is how SparkCognition works with Mitsubishi Power to better automate predictive analytics for power generation.

Energize invested in SparkCognition about 3.5 years ago. At the time we had strong conviction that Amir Husain and his team would become the default AI-enabled predictive analytics engine for the energy industry. Since we invested they have done just that with customers in utilities and oil & gas. One area that requires very specific industry expertise is the renewables market. Why? Wind turbines operate quite differently than any other turbines. Similarly, solar array performance and predictive models therein require very specific customer sets. And, the data sets for these types of assets are actually quite young, with a low level of failures. That means that the value for a predictive analytics engine to help operators estimate unit failure and schedule the optimal predictive maintenance schedule is increasingly valuable.

Enter Ensemble Energy. Led by Sandeep Gupta, Ensemble provides AI-enables asset management and predictive maintenance solutions for the energy industry. They provide these services on over 3,500 MW of wind and solar assets for firms like Sempra Energy, EDF, RenNew Energy, and others.

The combination of Ensemble Energy’s renewable awareness and SparkCognition’s AI engines and commercial footprint is a brilliant combination. These two firms will better serve the energy transition from end-to-end: making oil & gas exploration more efficient and secure…optimizing utility scale power plants… and now helping optimize new wind and solar assets. The energy industry will benefit from this combination through more efficient operations, less downtime.. and ultimately a more reliable energy and power ecosystem.

The press release can be seen here: SparkCognition Acquires Ensemble Energy to Accelerate Renewable Energy Growth Using Artificial Intelligence

Energize invests in TWAICE

Energize invests in TWAICE

Energize Ventures is proud to lead the oversubscribed $26M Series B investment in TWAICE, the leading software platform for battery analytics. Existing investors Creandum, Cherry Ventures, Speedinvest and UVC also participated in the round. Energize principal Tyler Lancaster joins TWAICE co-founders Stephan Rohr and Michael Baumann on TWAICE’s board, and associate Mark Tomasovic joins as a board observer. This investment marks Energize’s first investment in the battery sector and our third investment in a company based outside of the U.S.

“With the rapid acceleration toward electrification, we are keen to grow in key markets. North America is the logical next step.” With its impressive portfolio of energy and mobility companies and strong footprint in the United States, the new investor Energize is the ideal partner”

Stephan Rohr, Cofounder & Co-CEO at TWAICE

Our “Why We Invested” is pasted below.

Software, soft costs and scalability

The economics of renewable energy and the demand for electric vehicles are accelerating a global transition towards mass electrification. As the world electrifies, batteries will be needed to move electric vehicles and smooth the power supplied to the grid. TWAICE’s software brings transparency to the battery lifecycle, optimizing both the development and operation of batteries.

After years of closely monitoring the energy storage ecosystem, Energize recognized that software will be critical in helping the battery industry achieve scalability. The world is at an inflection point in both global electric vehicle sales as well as energy storage deployment. The serviceable market for battery analytics is expected to grow at a 48 percent CAGR over the next five years.[1] While the cost of battery hardware has declined by 80 percent since 2013, “soft costs” will inhibit further scale by slowing system-level battery cost declines. Inefficient battery sizing and design, ineffective customer acquisition, and suboptimal charge and discharge cycles all add soft costs — hindering broader battery storage and electric vehicle adoption.

TWAICE’s software platform significantly reduces soft costs, making renewable energy and electric vehicles more economic. By helping customers understand the degradation of energy storage assets over time, TWAICE enables users to improve up-front battery sizing and actively manage storage assets — which can extend battery life by more than 25 percent. Our investment in TWAICE is the culmination of the ideal market conditions, technology, and team. The energy storage sector is poised for sustained growth over the next decade, and we expect to see escalating demand for the company’s proprietary battery analytics platform.

Source: TWAICE

Solutions-oriented team

Energize has been evaluating the battery software market for more than four years. The Energize team first met TWAICE co-founders Stephan Rohr and Michael Baumann as they were spinning out the company from the University of Munich. During their PhD studies in battery engineering, Stephan and Michael realized that battery design and degradation were becoming emerging pain points in both electrified mobility and renewable-power generation. However, existing internally-developed or consultant-generated analytics were too costly and could not scale with the battery industry’s exponential growth. Stephan and Michael began building a tool to model and simulate battery performance. Soon after, TWAICE was born.

TWAICE co-founders Stephan Rohr and Michael Baumann

Over the past three years, TWAICE has assembled an incredible team of product designers, engineers, and machine learning experts to accelerate battery development, monitor battery health, and accurately predict future performance.

What’s next: International expansion and industry-specific growth

TWAICE and Energize see a tremendous market opportunity for software to drive efficiency across every aspect of the battery lifecycle. With the Series B raise, TWAICE plans to scale operations in Europe, begin commercialization in the U.S., and expand product functionality by building industry-specific solutions on top of their core analytics platform. In addition to capital, Energize is excited to bring our network across the energy and mobility industries and our experience scaling industrial SaaS companies. We are thrilled to partner with Stephan, Michael, and the broader TWAICE team!

The Linear to Circular Economy

The Linear to Circular Economy

There are many frameworks to approach the transition towards a more sustainable future. One theme that we have been using increasingly often here at Energize is the concept of a “Circular Economy”. Eileen Waris is leading the charge on a few deep dives in this area and I suspect we will be quite active investing here over the coming quarters. At Energize we will always default to digital businesses, but this is a space that will include a lot of business model innovation as well. If you know of any businesses addressing this theme, please let us know.

Birthdays and Goals

Birthdays and Goals

I officially turn 1 year older today and am the ripe old age of 36. Hopefully some birthday cake tonight. I am a sucker for birthday cake.

A lot of people I know plan year-specific goals or “resets” – and they are incredibly successful in year-over-year advancements. I don’t plan that way. I prefer bigger, longer-term goals that are 5 to 10 years away.

I generally subscribe to the “make no small plans” approach because it is nearly the same amount of effort to work on something with a big or small outcome. In my mind the difference is letting time compound effort. 5 years ago I was in the final stages of selling Choose Energy, and Energize didn’t exist. Investing in digital technologies to advance a more sustainable future was a personal goal… but it would have been hard to predict present-day.

As we say at Energize: “the best part of the future is that it surprises you.” To me that means control what I can control:

  • Work ethic
  • Markets I focus on
  • People I work with

I believe that if you can get those 3 things right then good things tend to happen. And surprise to the upside is possible. So, here is to a good year… and continued march on the next 10 year plan!

CB Insights AI 100

CB Insights AI 100

CB Insights is a top research organization for the private markets. They do a great job creating market maps and recognizing the emerging technology leaders within a theme.

Last week CB insights released their Top 100 AI-enabled companies. For a few reasons, this is an exciting list:

  • “AI” as a buzzword peaked in 2016 and 2017. I believe we are now at the stage of the hype cycle where real value is being built and the firms that have converted technical leadership to customer and industry value are finally emerging
  • As with any technology, industry expertise and focus is usually required to convert this broad technology advantage to specific vertical leadership. The fact that CB Insights segmented the companies by industry theme demonstrates the present day “value approach” of this AI-to-industry combination
  • Two Energize portfolio companies made the list! Jupiter Intelligence for climate risk and Matroid for computer vision.

At Energize we are thrilled to see these companies gain the appropriate recognition. More exciting, however, is the real value both of these companies are providing their quickly growing customer bases. Our diligence process is always customer focused and we knew that Rich at Jupiter and Reza at Matroid had the respect to frame their technology in the customer’s problem set. I suspect we are going to see both of these firms on this list (and others from the portfolio) in 2022.

What is an “Edge Operating Strategy”?

What is an “Edge Operating Strategy”?

Over the past decade, a common question t Fortune 500 CTOs and CIOs were seeking to answer was “what’s your cloud strategy?”

It is still only the 3rd or 4th inning in that cloud transition. And the scale of the cloud technology market, as evidenced by trackers like the Bessemer Cloud Index, is apparent.

So what is the next question? The one I know most asset operators are thinking about is:

“What is your edge strategy?”

The edge has different meanings to different users. A truck, a windmill, a component on the factory floor, an electric vehicle charger, a pipeline, a telecom tower, a security camera. These are all decentralized and intermittently (or continuously) internet-connected assets. Due to the declining costs of sensors, these edge nodes are now growing in capability… and compute.

My simple interpretation is that “the edge” is the decentralized operating environment. And an “edge strategy” is meant to address how and why companies are going to capture, compute, relay, and secure at these decentralized assets. Within that strategy, the executives need to understand which decisions can or need to happen at the edge vs. sent to a centralized cloud infrastructure. These decisions will ultimately affect how the same CTOs re-address their cloud architectures… major implications.

It is hard to fathom just how many use cases, types of value, and new hardware and software products will be developed to address this edge opportunity. We have made a number of investments in the space (more on that tomorrow) and are actively looking for more, great entrepreneurs tackling this problem.

CDPQ & Energize Ventures

CDPQ & Energize Ventures

We all know venture-backed startups need to raise capital. A lesser known fact is that venture firms identify and raise capital from “Limited Partners” in their own fundraising process. When Energize’s LPs were performing due diligence on us recently, one of our portfolio executives gave excellent feedback: “I hope the Energize LP base can scale with their ambitions.” The executive was referencing Energize’s growing goal to better serve and capitalize a more sizable portion of the energy and sustainable industry transition.

At Energize, we have a foundational relationship with Caisse de dépôt et placement du Québec (CDPQ) as they are Limited Partners in Energize Ventures I and Energize Ventures II. They invest creatively, have high integrity, and own a diverse set of assets with relevance to the energy transition. And like us, CDPQ is trying to find more ways to get creative to deploy more capital into the energy transition. Therefore, I am pleased that yesterday Energize and CDPQ announced a $125 million co-investment partnership to identify and support leading digital companies addressing the energy and sustainable industry transition.

The Energize blog post can be found here. The CDPQ press release here.

Two of the relevant quotes can be found here:

“The energy transition is accelerating even faster than our predictions. With this change comes a tremendous opportunity for innovative companies serving critical infrastructure, mobility, renewables and other sustainable industries to emerge and capture outsized market share. As a leading institutional investor with deep expertise and reach in the sustainability space, CDPQ is the ideal partner to invest alongside us in digital solutions that accelerate this critical transformation.”

John Tough, managing partner of Energize Ventures

“As part of its long-standing commitment to invest in solutions that address climate change, CDPQ is leveraging opportunities with strategic partners to direct more capital towards innovative investments and sustainability initiatives. We selected Energize as our partner because they have demonstrated an ability to identify leading energy investments while also supporting a cleaner and durable future.”

Mario Therrien, Head of Investment Funds and External Management at CDPQ

Pennies & Train Tracks

Pennies & Train Tracks

I was speaking with one of Energize’s Limited Partners this week. For the VC newbies, LPs are the groups (endowments, family offices, corporates) that actually give our Fund our capital.

Here at Energize we have a number of very experienced family office investors as part of our LP base. I consider myself fortunate that I get to speak with and learn from these individuals. Yesterday I was speaking with one of those LPs and talking about the current market. They had this great quote:

“Don’t pick up pennies off a hi-speed train track.

The individual was referring to the current volatility of the market and how the reward to the upside given the risk in-market seems imbalanced. And that a lot of investors are making risky investments with great economic uncertainty hurtling towards the market. In the conversation that followed we covered how the individual dealt with these events in the past. The advice was to be more of an observer vs participant and keep cash liquidity high because the right events will come… and when they come make sure the reward for the risk is FAR greater than the pennies.

As an early stage investment group, the Energize team has seen this froth and been slightly less active the past 6 months. During this time we doubled down on our research process. We are focusing on “where the puck is going” and have been heads down on about a half dozen deep dives. I am pretty excited about what we are uncovering… and those deep dives are revealing great investment opportunities that are less covered in the current market and better balance the risk/return that expect.