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DroneDeploy Raises $50M, Expands Horizon

DroneDeploy Raises $50M, Expands Horizon

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Today I am excited to announce that Energize co-led the latest growth round into DroneDeploy, alongside AirTree Ventures. This is the first announced investment from Energize Growth. A link to DroneDeploy’s press release can be found here. And a link to Energize’s announcement covering the deal can be found here. (VentureBeat here)

Energize first led the Series C for DroneDeploy in 2018. At the time I joined the Board of Directors alongside existing investors Jeff Clavier at Uncork Capital, Kevin Spain at Emergence Capital and Rory O’Driscoll at Scale Venture Partners. Katie McClain is a board observer and brings valuable energy, operating and policy insights to DroneDeploy. Back then Energize had conviction that drones and aerial analytics would dominate the enterprise level of energy and industry. That prediction was realized in a BIG way. So big, in fact that last year Invenergy used DroneDeploy to map the largest solar farm in the United States. DroneDeploy also has a number of utility customers that each manage hundreds of drone pilots through the platform. Amidst 2019’s growth, DroneDeploy also raised a Series D from Bessemer Venture Partners, and David Cowan joined the board. Tracy Young also joined the board and is a brilliant mind in the board room.

In addition to the continued expansion in energy, agriculture and construction… we are thrilled to see how DroneDeploy continues to be a product-led growth company. A few board meetings ago Mike Winn said “we will continue to invest in new products, because that is what our customer’s have grown to expect from DroneDeploy.”

That product-led growth mentality has led to impressive new product innovation in 2020:  360 Walkthrough and Vertical Flight. These are key features that enable visual data capture from cameras on the ground and drones flying vertically beside a structure or asset. DroneDeploy also continues to lead the industry in enterprise security, achieving both ISO-27001 certification and SOC 2 Type 1 attestation.

I’m thrilled to double down on the journey with DroneDeploy over the coming years. Energize will continue to provide our industry expertise, operator insights and team support to Mike and the DroneDeploy team.

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The headline and my quote is below.

DroneDeploy Secures $50M to Accelerate Development Beyond Drones and Solidify Global Market Leadership 

Energize Ventures and AirTree Lead the Latest Round to Grow into Europe

“The health, economic and workforce pressures of the last year have accelerated the adoption of drones and drone data by asset owners. We anticipate continued growth as industries expand their use of visual data to streamline operations. Energize is thrilled to continue to invest in DroneDeploy, the only company with a platform that captures and analyzes every dimension of job sites — interior and exterior, from any height and angle — and that has demonstrated the scale to meet the needs of fast-growing markets like energy and renewables.

John Tough, Managing Partner of Energize Ventures
Investing in the Obvious Trends

Investing in the Obvious Trends

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The VC market has a lot of nooks and crannies. Why? Big businesses usually start out as niche ideas that serve an impassioned, small cohort. After winning over the existing cohort, the best executives learn to expand into other verticals and compound into larger businesses over time.

But sometimes the best investments are the most simple business models that are in plain sight with obvious macro trends.

At Energize, two of our portfolio companies just released their 2020 highlights that follow this “big, simple business model” theme:

1- Nozomi Networks. The macro trend is simple: our operating and IoT networks are converging with traditional IT networks and are more susceptible to nefarious actors than ever before. Nozomi provides a cybersecurity and network visibility technology, delivered through the cloud, to protect our asset operators. Big market with a simple approach: ⚡
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2- Jupiter Intelligence. Again, an obvious macro bet: our climate is changing and the asset operators, financiers and insurance providers need to understand the impact. Jupiter is the global leader in data and analytics to make informed decisions to anticipate risk from extreme weather, sea-level rise, storm intensification and rising temperatures caused by short, medium and long-term climate change. Huge TAM + simple approach & business model = banner year. 🔥👀

Within the article you will see that Jupiter launched a new product (Climate Score Global), won an incredible number of new customers (BP, ConEd, Hawaiian Electric Companies, Terna…; insurance providers QBE and MS&AD) and are beginning to influence policy and win Department of Defense contracts.

They are clearly going to be a big technology platform for the next 100 years. Obvious position.

Here is a link to their 2020 highlights press release.

Welcoming Eileen Waris to Energize Ventures

Welcoming Eileen Waris to Energize Ventures

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Energize won the lottery earlier this winter when Eileen Waris agreed to join our firm as an Associate. She comes to us after spending nearly three years in getting dual graduate degrees at Stanford. At Stanford she earned both her MBA at GSB and a Masters in Environmental Science.

Her elite academic talent is matched by her professional accomplishments. She began her career as a high achiever at Deloitte before spending shorter stints at Estee Lauder, and as an investor at the Westly Group. Even after these experiences, Eileen then tried her hand in Corporate Sustainability at Tyson Foods.

This curiosity to explore different career paths and push herself into new experiences is a hallmark of a successful Energize teammate. But there is one other important part of Eileen joining Energize….

At Energize our motto is “accelerating digital innovation for energy and sustainable industries”. Within our team we have experts on renewables, power, utilities… and were light on expertise in some of the other sustainable verticals. Eileen’s background in the sustainable ecosystem gained through her education and work experiences immediately propels her into the spotlight on a number of investment themes at Energize Ventures.

“I’m excited about forming relationships with founders and helping them scale their ideas,”… “There are so many bright people out there with solutions that can improve the future of our planet. Many technical advancements have already been made, and now corporations and consumers have shown they’re willing to take meaningful action against climate change too. That makes this a really exciting time to invest in the space.”

Eileen Waris, Associate at Energize Venturs

I can’t wait to see what she accomplishes here. I encourage any entrepreneur focused on the digital acceleration of sustainable industries to get to know Eileen.

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A link to the Energize press release can be found here.

Welcoming Kevin Stevens to Energize Ventures

Welcoming Kevin Stevens to Energize Ventures

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In the summer of 2014, Kevin Stevens joined the Choose Energy team to help us develop our go-to-market for the commercial business. He came to us with a hunger and intensity that immediately delivered results.

Over time his responsibilities and knowledge-seeking grew. After the sale of Choose Energy he partnered up with Jonathan Crowder (also Choose-alum!) to launch Intelis Capital. Intelis focuses on seed-stage companies within the energy transition. Intelis is a great firm, and has a great portfolio. (And I am a LP!)

At Energize we believe there is an incredible opportunity to create an early venture capital firm that focuses on the energy and sustainable industries… AND that also has a pivotal presence in the growth equity market. The latter half of this statement is not a surprise for anyone who has followed my writing over the past few months. And so while we cannot say too much yet about our Growth Fund efforts, we are making a major investment into the opportunity. And Kevin is leading that effort.

You may also know Kevin as the co-host of PowerDown. To commemorate his joining Energize, we recorded an episode about a week ago… hope you enjoy it!

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Here is a link to the Energize Ventures press release. The main paragraph for whey Kevin will be incredibly successful to the Energize portfolio and team can be found here:

While holding positions in business development, product marketing and head of product, Kevin was exposed to the growing pains companies in this stage experience as they scale. He developed a deep understanding for how products get built, how internal processes evolve and what it takes to preserve team culture amidst growth. Put simply: Kevin’s superpower is the ability recognize when companies are ready to scale and systemize operations.

“The energy transition is a generational opportunity in one of the world’s most important industries, and climate change is one of the greatest challenges of our lifetime,” said Kevin. “I’m humbled to work alongside some of the brightest minds working to solve this problem.”

Kevin Stevens, Principal at Energize Ventures
4 years at Energize

4 years at Energize

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I saw this tweet come across my feed this morning from the @EnegizeVC twitter handle, run by Kelly on our team.

4 years at Energize. Wild ride. I joined as the third member, after Amy and Juan. It took us a few months to get to the first close of the fund and within the first year I led my first few investments (Nozomi, Volta, DroneDeploy).

Time flies when you have fun. And I feel like we are starting to hit a groove. I am excited to see what happens over the next 4 years. We have an absolutely incredible team with some recent new hires that are turbocharging our talent and vision. Our team looks at the Energize opportunity as a decades-long run.. so hopefully the platform & results continue to compound.
Thinly sliced salami!

Thinly sliced salami!

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The best of breed don’t grow on thinly sliced salami!

Eugene Kleiner

Eugene Kleiner made this statement in reference to negotiating fair deals and ensuring companies are adequately capitalized without onerous terms. Today there are standard terms in VC: invest $ for preferred equity. But 4-5 decades ago that was an innovative structure compared to debt or other more restrictive structures.

But I look at this quote as having different meaning today: the best companies don’t just happen. They need a whole lot of substance and quality to grow upon. The best companies are robust throughout their entire organization:

  • Leadership
  • Recruitment and talent management
  • Diversity and inclusion
  • Customer engagement
  • Product development
  • Operational process
  • Culture

And of course, there is a financial capitalization and balance sheet angle that is very relevant today as well. That capital does not create the “substance and quality” investment mindset, but can strengthen the organization as it grows.

Excellence doesn’t just happen. It takes intentional, hearty investment. The best businesses are not growing on thinly sliced salami.
Kleiner’s Laws – And the time to eat the tarts

Kleiner’s Laws – And the time to eat the tarts

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When I first joined KPCB, I got a detailed history of the firm and how a small group of pioneers became technology-first VC investors.

The ‘K’ in KPCB stands for Eugene Kleiner. Beyond being an incredible investor, he had a knack for catchy statements and frameworks that are still applicable today.

Joe Lonsdale, now of 8VC based in Austin, wrote this summary that can be found on Medium.

According to Joe, here are 8 of his most well-known “laws”

  • Make sure the dog wants to eat the dog food
  • Build one business at a time.
  • The time to take the tarts is when they’re being passed.
  • It’s difficult to see the picture when you’re inside the frame.
  • Even turkeys can fly in a high wind.
  • After learning some of the tricks of the trade, some people think they know the trade.
  • Venture capitalists will stop at nothing to copy success.
  • Invest in people, not just products.

At different points every year one of these themes seems to outshine the others. Right now, it feels like one of them is coming forth:

“The time to take the tarts is when they’re being passed”

Eugene Kleiner

Right now, for a host of reasons: low interest rates, energy transition going mainstream, big growth in new technologies, policy…. deep tech/cleantech is being served a main course of capital. The most seasoned investors and operators recognize this opportunity and are ramping up balance sheets to make massive technology, team and market share investments in the coming years.

(PS: my favorite Kleiner statement isn’t actually on this list and I will cover it another day!)
Deeptech and Cleantech: No Country for Growth Equity

Deeptech and Cleantech: No Country for Growth Equity

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“Price is what the market pays”

In business school the phrase was a reference to Eugene Fama’s “Efficient Market Theory”. But in today’s market it feels like this statement is now the valuation expert’s way of throwing their hand in the area and saying “who knows!?!”

I am not going to comment on Gamestop. Instead I am going to focus on how there is no real private market for late stage growth equity serving deeptech and cleantech businesses.

Cleantech and deeptech are generally long-horizon investments with sizable step-wise technical and commercial gains. In many ways these investments resemble pharmaceutical-related investments cycles and payouts. A number of high profile and developmentally expensive drugs don’t move to the next stage… but when a mass-market drug is FDA approved, the windfall covers the costs of the lost trials elsewhere.

There are many high-growth sustainability, electrification and broader deeptech-themed investments hitting the market at high profile valuations. As a private market investor, the valuation jumps these companies earn from the private-to-public move can be surprising.

A lot of people are pointing to public market froth as the logical explanation. The reality of SPAC transactions is that they are a big source of cash … and dilution for the target companies. But these same hi-growth private companies have been mostly starved of capital in the private markets. As a result, executives in the deeptech field are now trained to view financing risk as the primary barrier to investing in IP and subsequently hitting the big payout events.

Meanwhile, the SaaS vertical has every valuation metric meticulously analyzed around pricing. It’s the closest to a liquid market I’ve seen in the private markets: there are indices and the multiples are tracked religiously. There are still bumps when these SaaS companies go public, but the range is knowable. The reason this path to public is more streamlined for traditional SaaS companies is because there is a very healthy and robust late-stage growth equity market acting as a pre-public pool of capital.

The SPAC is effectively becoming the late-stage growth equity vehicle for the deeptech markets. As a result in some cases the future year valuations are being pulled (slightly) forward. And while it is easy to point to froth, I take the opposite view. These are clearly important and valuable companies with aligned economy, humanity and shareholder upside. I am glad that public market investors will be able to participate in the asset appreciation.

But, it’s a shame that our private growth equity markets weren’t able to help these companies grow a bit longer outside of the public eye. And so while it is helpful to have the SPACs in market, I actually believe the story here is the incredible opportunity for growth equity capital that serves the deeptech and cleantech environment.

Knowing the Energize team’s entrepreneurial approach, I expect we are going to do something about this…
Tyler Lancaster’s podcast on Point 01 – a must listen

Tyler Lancaster’s podcast on Point 01 – a must listen

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Tyler Lancaster is a Principal at Energize Ventures. In this Point 01 episode he covers his background, our portfolio approach… and a BUNCH of great details about some companies in our portfolio.

A few themes:

1- Our renewable industries are already way bigger than most people expect… and a huge job growth engine

2- Digital technologies (the shading engine!) are creating massive advancements for development, deployment and maintenance of the new energy economy

3- New administration tailwinds for climate technology are going to be massive: new R&D investments, FERC, DOE and agencies stepping up to reduce red tape, EV charging infrastructure!

He also gives hints on where we are looking to make our next investment. Not only should you listen, but you should connect with Tyler and follow his writing.
Sitetracker’s $42M Series C: Energizing the Future

Sitetracker’s $42M Series C: Energizing the Future

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The best part of my job is getting to meet with entrepreneurs who share with me their vision of the future. At Energize we meet around 500 qualified companies every year. We look for a CEOs storytelling ability and his or her conviction around what will be different and new in the coming years.

Through our own experience, our LPs and our continued learnings, we also develop ‘prepared mind’ theses to our areas of focus. One of those areas is the future state of our critical infrastructure. At Energize we thoroughly believe that our centralized critical infrastructure is dispersing to the edge. Big power plants are being decentralized into wind and solar farms. Rooftop solar and electric vehicle charging infrastructure are infiltrating houses, apartment buildings and commercial buildings. Cell towers are going from huge structures to rooftop cell relay sites. Critical infrastructure is atomizing and distributing. And the new energy economy is at the heart of this change.

When we first met Giuseppe Incitti and the Sitetracker team in 2018, we knew we had an Energize thesis-entrepreneur-future vision match. In addition to that thesis alignment, we also learned that the Sitetracker team had the level of customer respect and sales gumption required to win over the traditionally slow-moving critical infrastructure verticals. Critical infrastructure decisions move slowly by design: there can be no downtime and… once the product is in place… it is probably in place for a 20+ year relationship! The long-term investments that Sitetracker was making in 2018 into product and sales cycles drove us get creative when we led the Series B-2.

Since our investment, Sitetracker has continued to masterfully execute their plan to be the de-facto software platform for the next generation of critical infrastructure. We are thrilled to double down on Sitetracker and their progress. We are co-leading the $42M Series C alongside H.I.G Capital and are thrilled to bring them into the company. We are also happy to welcome new investors Deutsche Telecom Capital Partners, Energy Impact Partners and Clearvision Ventures to the cap table. Existing investors NEA, Wells Fargo, National Grid, and Salesforce Ventures also participated.

I joined the Sitetracker board during the Series B-2 and am excited to announce that our Energize Partner, Katie McClain, is joining the board as well. This is the first company where Energize holds two board seats and we are excited to double down Sitetracker’s growth efforts in the new energy economy.

Here is a link to the: