I saw this graph from the IEA a few weeks ago and it hit home on a topic those closest to the energy transition know: the energy transition is going to require a LOT of minerals.

These minerals are going to require a new approach to sustainable mining and a more prepared recycling strategy for the new energy pioneers. Supply chains will need to be reimagined and commodity price volatility managed. Finally, new geopolitical relationships and tensions will form. Net, certain parts of the carbon and new energy economy will look quite the same…

Jupiter Intelligence is a climate risk technology and analytics platform. Energize initially invested in the company in Q1 2019. We invested in Jupiter because we truly believe in Rich Sorkin and Eric Wun’s vision for the future of climate risk. As covered by Jeremy at the Washington Post yesterday, Jupiter’s vision and product are no longer a future requirement. Rather there is 10x year over year increase in demand for the company’s technology platform. Some snippets below:

Business booms at climate risk start-up as threat from extreme weather grows

By Jeremy Deaton – May 27, 2021

For most companies, the end of the pandemic has meant slowly getting back to normal. For Jupiter Intelligence, a climate risk start-up with headquarters in Silicon Valley, the recovery has led to a massive surge in business.

Jupiter helps companies gauge the threat that climate change poses to their bottom line, and it has seen a rush of new clients as business leaders look to the looming threat of extreme weather. Chief executive Rich Sorkin said Jupiter booked more than 10 times as many contracts in the first quarter of 2021 as it did in the first quarter of 2020.

“I think that the pandemic, for us, was a bit of a double-edged sword,” he said. “On the one hand, we had this near-death experience. On the other hand, once people got past the pandemic, they were like, ‘Oh, what else is there like this that we’re not worrying about that we should be worrying about?’ And climate change is at the top of that list.”

“It’s just like cybersecurity 10 years ago, when no one knew what cybersecurity was,” Sorkin said. “Now, there isn’t an entity on the planet that doesn’t have a cybersecurity or security solution that, in large part, depends on some third-party cybersecurity company. And this is going to be just like that.”

I am a few days late here, but we had a fair amount happening over the last week!

Last week marked the one year anniversary of Mark Tomasovic’s start date with Energize. If a few years ago you had told me we would hire an Exxon chemical engineer as an investment Associate I would have thought you were crazy.

But Mark is a special individual. He is humble, thoughtful, and constantly learning. He wanted to change careers but join a team that respected both sides of the energy transition – and we were lucky to hire him. He is helping us identify the best practices of the carbon economy and bring those insights to the new energy economy. His network is additive to Energize’s existing relationships and his perspective on market trends, investments, and team building has made us stronger. He is also our lead Twitterer …

The Energize team: our firm, our portfolio, and our LPs are all the better with Mark on our side. His slope of learning is VERY high and I expect you all will see even more positive updates from him over the coming year.

Yesterday Aurora Solar announced their $250M Series C. When Energize led our ~$14M investment in 2019 we most certainly did not imagine this growth potential for Aurora and the solar industry at large. The industry/company is hitting new highs and COVID forced firms to accelerate digital adoption.

Beginning around Q3 last year we started seeing the near-term TAM across our portfolio begin to get bigger as demand levels leapfrogged a number of years… creating more immediate scale. As a result, the upside case for our portfolio and thesis in general began to increase. Like in the movie JAWS, we realized we “needed a bigger boat”. Our best companies can and likely will reach higher commercial traction than we projected and require more capital to meet the growth opportunities that lay ahead of them. With that knowledge, we went into action and raised our first Growth Fund, alongside hiring Kevin Stevens to manage that existing and future opportunity.

Aurora Solar is one of our (currently) four investments in this first growth Fund. Kevin wrote yesterday’s blog post on our continued investment into Aurora. In his post he talks about one of the main reasons for the new scale opportunity for renewables-focused software and I wanted to highlight it here:

A theme that can be seen across the renewable energy spectrum is hard costs on the decline. Solar is perhaps the best example of this trend, and we are seeing the decreasing cost of hardware create demand from consumers and businesses alike. Along with growing demand comes new challenges, such as accurate design and efficient permitting. The best solutions for these pain points? We believe it’s software.

Kevin Stevens, Principal at Energize, Head of Growth

As hardware costs have declined, software is now required to enable the scale of the renewable energy verticals. Now is “go time” and Energize is ready to serve this market from early commercialization through the growth stage.

A business school 101 class would tell you that excess inventory consumes cash flow and lowers the return on capital. Armed with that simple fact, an unquestioned business movement over the past decades has been the “Just in Time” (our “JIT”) supply chain. “Just in Time” means that firms are:

1) Using predictive or behavioral analytics to predict demand and order raw materials

2) Make the consumed good in real-time

3) Deliver to the end customer or distributor at nearly the exact moment the customer needs the product

With this movement firms are investing less in inventory and driving more profitability. In a steady state world, this JIT process can be a thing of beauty.

And this works, until the day it does not. And a number of consumer, social and political changes are beginning to reveal the JIT weakness.

Climate events are stressing the supply chain. See: McKinsey report on climate weakening the supply chain

Changing consumer preferences are stressing the supply chain. See: EVs and lithium ion battery shortages

International geopolitics is stressing the supply chain. See: computer chip shortage affecting automotive industry

Cyber attacks are stressing the supply chain. See: Colonial Gas Attack.

I am guessing the next generation of “best practice” will move from “Just in Time” to “Resilient Supply Chain”.

Resiliency will likely mean a slightly more costly supply chain structure. But this is a supply chain that won’t buckle with a single point of failure. It means investing in cybersecurity, climate resilience, materials alternatives and potentially more localized production. Technology and software will play a big role in altering our supply chain. This is an area we are focusing on at Energize.

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.

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.

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.

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