In 2020 the entire Energize team fit comfortably in a (maybe) 2,000 square foot space on the 11th floor of One South Wacker Drive. At Energize we have a phrase “we choose to grow, together” and this represents our desire to growth with the climate market opportunity. Alongside this phrase you will usually hear me say “why not us?” At that time we saw the climate market growing and knew that to serve the space with the intention it deserves, we would need to create and build our portfolio services team (EDGE), expand our strategies (adding Growth), and continue to build out the operations team.

Well, almost exactly 3 years after we moved into our 5,000 square foot space on the 11th floor of the same building we just signed an agreement to move to the 23rd floor and take over nearly 11,000 square feet. The expansion was picked up by Chicago Business Journal and through a CBRE press release, found here.

I was surprised at the press’ interest in the expansion, and I thought the questions from the reporters and our network highlighted why this was more than a normal expansion in their eyes.

1- Why grow a climate and industrial technology investment firm in Chicago? I suspect the Energize team will get this into perpetuity- but the market seems to be incredulous to the concept. Chicago is an amazing place to grow a firm, and the city offers a huge talent pool.

2- Commercial real estate is in flux, as is WFH culture. Why commit to an office? The investing business is a people and decisions business. The ability to train shoulder-to-shoulder and learn from the varying experiences of our diverse team is a major competitive advantage you just can’t get over a ZOOM or Teams meeting. We are better together and we’ve committed to 4 days a week in the office. We are also hosting far more people in our office and believe there is power in being a convener.

We have a 2030 plan and a 10-year plan at Energize. We believe the climate & industrial technology market is big enough to deserve and rewards specialists and we will continue to grow to serve this market. I think we will be in the same office by 2030, though!

In September Energize held our 2-day marathon of events: the Energize NEXT Climate Software conference, and our Annual General Meeting. Before the day started at our conference we were able to sneak away for a quick team photo. That photo of the current team is below – and we have another 3 starting before year-end.

Finance firms have many stakeholders: teammates, entrepreneurs/portfolio executives, Limited Partners, co-investors and industry stakeholders. I’ve studied successful and failed finance firms. That research revealed to me the key differentiations between the high performing and enduring firms from those firms that fail. The simple answer is that the performant and enduring firms never stop placing the internal team as the priority. A performing and respectful team naturally identifies and supports investments and entrepreneurs. And ultimately those portfolio companies (with the support of the investors) create shareholder value that accrues to the Limited Partners/investors.

At Energize we have a truly amazing team, purpose built for the market opportunity we are serving in the climate market. We have a driven, respectful investment team that has repeatedly identified market leaders. We have an EDGE team strengthening our investment process and creating and preserving value for our portfolio. We have an operations team that knows our trajectory and is both precise in today’s operations while planning for the future.

Given the pace of change it is hard to stop and acknowledge the changes we’ve faced and overcome as a firm. I’m very excited for our current state, and more excited for what is coming next.

One of the first investments Energize made as a firm was in a European leader, Nozomi Networks. Since then we have deployed nearly 20% of our invested capital into the European ecosystem. While others shy from the market we believe there is tremendous climate and industrial technology innovation emerging. Our persistence – and willingness to take the redeye- has helped us become a staple in the Eurpean market and resulted in such investments as TWAICE (Germany), Monta (Denmark), PVcase (Lithuania), Beekeeper, (Switzerland), and Nozomi Networks(Switzerland). We also have an unannounced deal on the continent.

Today I am excited to announce another addition to the Energize portfolio – and to our leading European investment footprint: Energize is leading a $13M Series B investment in Elum Energy, a cutting-edge energy management solution helping to control, monitor, and analyze renewable energy systems around the globe.

We’ve been investing behind the solar theme for close to a decade and believe the space is still in the early innings. We have leadership positions in solar design and sales (PVcase and Aurora Solar) and are making our first investment into the control systems and monitoring side of the solar business model. Solar is the largest for of new energy generation on our planet and the entire technology stack is being developed today to help grow from GigaWatts to TerraWatts.

I believe Energize is the best partner for any capital light business enabling the energy and climate transition. We only make 4-6 new investments per year so it takes a rare founding team and operating plan to get our attention. I met the Elum team in Paris earlier this year and the product and customer obsession quickly made it clear that we had aligned technology visions. The Energize team is very motivated to grow with the Elum team over the coming years and build the best control system for the largest new energy infrastructure asset class. Eileen Waris and Ana Hugener are representing Energize on this investment; and press and the formal “Why We Invested” for Energize can be found here.

On September 18th Energize is hosting our second annual climate software conference, Energize NEXT. The panelists/ fireside chat speakers as well as the list of now ~200 attendees is an absolutely incredible representation of key stakeholders from our industry. We have leading operators, entrepreneurs, capital providers, capital markets leaders, and industry customers all in attendance. Excitingly, an executive (and likely a/the founder & CEO) from most of Energize’s portfolio will be there, too.

Here is a snap shot of the AM agenda and speaker list. While the content should be great, I tend to find even more value is found from the hallway conversations that occur.

A link to the event and application for attendance can be found here. If you are going to be in Chicago and want to attend and read this post, let me know and I will get you put onto the attendance list.

I’ve gained a lot of value from posting to this blog over the years. But the story below probably is my favorite example of creativity, content, and the long-term relationship mindset we have at our firm.

On August 30, 2022 I wrote a post here about how a portfolio company was looking to hire a GM for their energy business. An ambitious software entrepreneur with experience in data analytics that was intrigued by the energy landscape cold emailed me in response to my post and came by Energize’s Chicago HQ a few days later. While that specific GM role was not the right fit for him, the visit led to a multi-year engagement with the entrepreneur whereby the Energize team was able to ideate on energy software opportunities and subsequently monitor a stream of innovation and execution.

That entrepreneur was Max Kanter and today Energize is announcing the first institutional investment, an $8M round, into Max’s new company, GridStatus.io. Max is one of those rare entrepreneurs where I have been able to witness the raw combination of talent, curiosity, and execution. Through that combination GridStatus has immediately gained coverage across most major publications (WSJ, NY Times) and quickly become the data team for the energy transition. The Energize blog post “Why We Invested” can be found here and an article about the company & raise on Canary Media. The press release is posted below:

Grid Status Raises $8M to Democratize Access to Real-Time Grid Data to Meet Demands of Rapidly Changing Energy Grid 

– Round led by climate investment firm Energize Capital underscores critical need for real-time, accessible data and analytics to accelerate the energy transition 

– Company launches first and only publicly available national real-time wholesale electricity price map; will use funding to scale its rapidly growing teams across engineering, sales and marketing 

CHICAGO, August 21, 2024 — Grid Status, the modern data and analytics platform for the electric grid, today announced an $8M funding round led by Energize Capital. Investors joining the round include Nat Friedman and Daniel Gross (NFDG Ventures), Rayburn Electric Cooperative, Evergreen Climate Innovations and other individual investors. This first round of outside funding will enable Grid Status to scale its team and product to meet the data demands of the rapidly changing energy industry. 

The electric grid is undergoing a major transition as increasing volumes of renewable energy technologies come online and energy demand spikes in key regions. Combined with more challenging operating conditions due to extreme weather events and volatility in wholesale energy markets, the energy industry is in need of a reliable, real-time data platform. Grid Status democratizes access to grid data by offering easy-to-digest insights on current and historical grid activity, including fuel mix, load, locational marginal prices, renewable adoption, and more. With Grid Status, energy professionals can make informed decisions for their business, and everyone can track key energy benchmarks more efficiently. 

“Renewable energy, AI-fueled load growth, electrification, and intensifying weather events are some of the trends making accessible data about the grid more important than ever,” said Max Kanter, CEO of Grid Status. “Our mission is to provide everyone working on a clean and reliable grid convenient access to data they can trust.” 

Since its founding in 2023, Grid Status has rapidly grown to over 10,000 active users across the energy industry who use its data products to understand what’s happening on the electrical grid and in wholesale energy markets.  

“Our energy grid is growing increasingly unstable and complex, and at the same time the volume of data coming from devices with embedded computing has skyrocketed,” said Tyler Lancaster, partner at Energize Capital and a member of the Grid Status board of directors. “As the grid continues to evolve, we’re seeing an increasing number of parties who are interested in grid data – from electric utilities and renewable energy operators to research and cloud computing firms. The convergence of these conditions highlights the need for a modern solution for managing and interpreting data. Grid Status’ open-source, reliable and easy-to-use platform is the data tool for all participants in the next generation of the energy industry.” 

The Grid Status platform collects, standardizes, and analyzes hundreds of energy datasets, enabling users to create dashboards, leverage analytics tools through Grid Status Pro, and gain robust data access via APIs and integration with enterprise data warehouses like Snowflake. Furthering its mission to make critical grid data easily and widely accessible, the company also announced the release of the industry’s first and only publicly available real-time wholesale price map. This map, along with new platform functionalities, will help users understand what’s happening on the grid at a glance. Users can access this map as a standalone app or within various dashboards across the site. 

Grid Status currently has customers across the energy sector, and its users span a majority of renewables developers, energy consulting firms, and ISOs and RTOs in the U.S. It also supports utility operations, demand response aggregators, battery dispatch optimization, trading desks, and innovative startups.   

“Using Grid Status enhances our operational efficiency, enabling us to provide more reliable and responsive energy solutions for our members,” said David A. Naylor, President and CEO of Rayburn Electric Cooperative, a customer of Grid Status. “This innovative platform helps us gain deeper data insights, facilitate seamless data sharing and communication, and improve our ability to analyze and monitor critical information. In addition to being a customer, our investment in Grid Status underscores our commitment to utilizing advanced technology to meet the evolving needs of our members and the broader north Texas community.” 

To learn more about Grid Status, view open positions, and sign up for the Grid Status Pro beta program, please visit gridstatus.io/.  

About Grid Status  

Grid Status is an energy data and analytics company based in Chicago, Il. Founded in 2023, Grid Status provides an open platform to understand what’s happening on the electrical grid. With organized and reliable data, Grid Status empowers the next generation of energy innovators to focus on building new solutions without having to maintain their own complex data pipelines. 

About Energize 

Energize Capital is a leading investor in climate solutions. Founded in 2016 and based in Chicago, Energize seeks to scale sustainable innovation by partnering with the builders and operators shaping the future. To date, Energize has funded 28 companies and deployed more than $500 million through its venture capital and growth equity strategies. Anchored by founding partner Invenergy, the firm is backed by strategic, institutional, and impact LPs including CDPQ, Credit Suisse, GE Vernova, Xcel Energy, Caterpillar, HASI and more. For more information on Energize, please visit www.energizecap.com. 

Last week The Economist published an article titled “The Exponential Growth of Solar Power Will Change the World,” emphasizing a well-known trend at Energize: energy technologies such as solar and batteries are rapidly expanding.

The International Energy Agency (IEA) regularly projects energy generation from specific technologies. However, their predictions regarding solar have consistently been proven wrong, as shown in the chart comparing projections with actual deployment.

Solar’s growth is attributed to declining deployment costs and effective large-scale execution strategies. It now costs less per unit than most other technologies. This cost decline isn’t solely due to hardware; advancements in software and services for utility-scale solar have also played crucial roles.

At Energize we look to invest in long-term, enduring megatrends. The energy transition is a natural focus for us and the scale and deployment of utility scale solar has generated tremendous investment opportunities. The best climate solutions investments enable the deployment and management of assets at scale. The ecosystem around solar deployment demonstrates effective alignment of technology and system innovations.

Energize’s portfolio includes companies deeply involved in the utility-scale solar sector:

PVcase: utility scale siting and design software and used by a majority of utility scale developers worldwide

Sitetracker: project management software for large high volume, distributed assets. Large scale solar deployment and operations is a great use case, including a recent announcement by Cypress Creek.

Banyan Infrastructure: finance software bringing together capitalization stakeholders for solar projects

DroneDeploy: reality capture for the physical world. In solar: autonomous drone flight and aerial analytics to monitor construction progress and operational performance; used by the top developers worldwide

Amperon: energy demand forecasting that enables energy suppliers to maximize /match generation to load, and thereby optimize revenue production. This is especially important for generators and consumers in renewables-heavy zones

Sourcemap: supply chain transparency software helping OEMs identify the source of materials. In solar, this software helps identify the source of minerals and labor that go into panel production.

Handle: construction payments tools, including lien and credit products. At Energize we say “if you are long the energy transition you are long the construction sector” and the tools that Handle builds are used by the construction and materials firms building our next-generation solar and wind assets.

These companies contribute to efficiency and growth within the solar asset class. Energize identifies and supports businesses that drive climate solutions in these rapidly evolving technologies – and solar is a great market right now.

Energize holds an annual summer retreat, alternating between a Chicago-based
event and a travel destination. This year we went to the east coast and focused
on how we can continue to invest in our team’s resources to meet the scale and
complexity of the growing climate opportunity.

The purpose of the retreat is for the Energize team to evaluate and realign our
short-term and long-term goals. We view this event as a chance for us to ensure
we are on track to achieve the goals we’ve committed to each other and our external
stakeholders: LPs, entrepreneurs, co-investors.

As an investment firm our “products” are our decisions and the
ways we engage with and help our portfolio create, protect and realize value.
It has been well-documented that the feedback cycles on private market
investors can be extended. I’ve found that the leading indicator to success in
our business is the quality of the team. One of our new teammates is
a semi-professional photographer and we had a few photos takes from the trip. I
was looking through the photos and this one jumped out – I feel very fortunate
to have so many high-quality colleagues here at Energize. With this crew
guiding and executing upon our goals, I think we are going to have a very
exciting second half of 2024, and beyond.

(Press release put out by Energize CAPITAL today, seen below. The message is simple…!)

Energize Capital raises $300 million growth equity platform as market for climate software matures to new level of scale

Firm surpasses $1.2 billion in assets under management; changes name to Energize Capital to reflect go- forward investment strategy

July 27, 2023 [CHICAGO] – Energize Capital (formerly Energize Ventures), a leading climate software investor, today announced the close of its second growth fund, bringing the firm’s total capital commitments for its growth equity platform to $300 million. This close brings Energize’s assets under management to $1.2 billion, surpassing $860 million in total committed capital from LPs. To reflect this extension of strategy into growth equity and to position itself for future growth, the firm has changed its name to Energize Capital. Under the expanded strategy, the investment firm will continue to support enduring climate software businesses as they scale amidst significant economic tailwinds.

The official close of Energize’s growth platform comes at a time when growth capital is in high demand – especially for the climate market. According to CTVC data, more than 2,000 early-stage[1] climate companies received institutional funding in the last 24 months. If even just 10% of those companies reach the growth stage, that means roughly 200 climate companies will be looking to raise growth capital in the next 24 months – but growth capital providers are in short supply. According to Pitchbook[2], the demand-supply ratio of late-stage funding is at a decade high, with just $1 of funding available for every $3.24 demanded.

“As the market for climate software matures and companies grow into billion-dollar valuations, growth equity investors have access to an abundant pipeline of enduring businesses in climate for the first time,” said John Tough, managing partner of Energize Capital. “At Energize, we intend to be the go-to partner for entrepreneurs as they scale – from venture capital to growth equity and beyond.”

“Our belief when founding Energize was that access to Invenergy, its entrepreneurial culture, assets and people create a strategic advantage for an investment platform in the rapidly scaling energy transition space,” said Michael Polsky, chair of Energize’s investment committee and CEO of Invenergy, the leading sustainable energy and infrastructure developer and an anchor investor in Energize. “The expansion of Energize’s strategy validates this approach, and we look forward to continued partnership in this next phase of growth.”

Energize’s expertise is scaling asset-light digital climate solutions that enable the new energy economy. With its new growth equity strategy, Energize can continue providing capital and operational support to enduring late-stage climate software companies. To date, Energize has made seven investments out of its growth funds, including a recently announced investment in PVcase’s $100 million round, as well as follow-on investments in its venture capital portfolio companies Sitetracker, DroneDeploy, and Aurora Solar, which is one of the most valuable climate software companies today.

“When Energize was founded in 2016, our guiding thesis was that the transition to a sustainable economy represents a generational transfer of capital, and that it would require digital technologies to enable and accelerate scale,” said Tough. “Seven years later, our ambition remains unchanged, but the opportunity for climate software has skyrocketed beyond expectations. For example, our portfolio’s software revenue has grown from $100 million to nearly $400 million over the past three years. Unveiling our growth strategy and announcing the shift to Energize Capital represents our commitment to scale our strategy to grow with our entrepreneurs and the maturity of the space.”

Across its four funds spanning venture capital and growth equity, Energize is backed by a diverse set of LPs representing strategic, institutional, impact and family office investors. In addition to Invenergy, Energize LPs include CDPQ, CAPROCK, Credit Suisse, Hannon Armstrong, Xcel Energy, and other institutional capital providers.

To date, Energize has invested in 26 climate software companies accelerating the transition to sustainable energy through its venture capital and growth equity strategies. Energize closed its first $165 million venture fund in 2018, followed by a $330 million vehicle in 2021. In 2022, the firm added 12 new team members and deployed $260 million across its portfolio.

About Energize Capital

Energize Capital is a leading climate software investor focused on scaling sustainable innovation. Founded in 2016 and based in Chicago, to date Energize has funded 26 companies and deployed more than half a billion through its venture capital and growth equity strategies. Anchored by founding partner Invenergy, the firm is backed by strategic, institutional, and impact LPs including CDPQ, Schneider Electric, General Electric, Caterpillar, and more. Leveraging the team’s industry and operational expertise, Energize works in partnership with climate technology companies at various stages of maturity by helping them scale and realize their full potential, from early commercialization to the public markets. For more information on Energize, please visit www.energizecap.com.

Two of the top media / research firm in the climate space are Canary Media and CleanTech VC. They collaborate to publish market and fundraising statistics on a semi-annual basis. Today they released their 1H 2023 results, and the figures are below.

Here are some of the takeaways:

• Climate tech venture funding totaled $13.1B in H1 2023. Compared to H1’22:
• Total funding down 40%
• Overall deal count increased 8%
• Growth funding plummeted 64%
• Seed funding grew 23%
• Average deal size decreased 44%

These trends are consistent with what I have been seeing in the market. The growth/late stage market is effectively shut down and the larger crowd has moved to seed. As someone who has been in the space long enough, this isn’t a new trend when the market gets hard. But the second order affect is that the technologies that can deliver financial and impact return today or in the near-term are all in the growth stage, and those firms are likely to be starved of the capital they need to reach scale. I’ve covered this here and directly with our LPs… and 2H 2023 will be one to watch closely.