Aurora Solar co-founders, Chris Hopper and Sam Adeyemo are ALWAYS heads down. They would be the first to tell you that new financings are mostly a nuisance and the fundraising process gets in the way of growing the business. The cofounders are laser-focused and Aurora Solar has a simple statement:

“We are building the operating system for the solar industry”

Aurora is executing masterfully and is now the standard software platform for one of the fastest growing industry’s in North America. As a result of their growth, Aurora is looking to accelerate product development and market expansion through a Series B capital raise led by Doug Pepper at ICONIQ.

Energize led the Aurora Solar Series A in Q1 2019. We were introduced to Aurora by one of our family office LPs… (man now THAT introduction was major value-add). As Tyler writes in our blog post, we had a “prepared mind” on the space as we had seen most of the solar-related and distributed energy software companies. This enabled us (ahem, Tyler) to work heads down over Thanksgiving 2018 and come in the following week with even greater conviction. We have been thankful to be part of the ride with Aurora to-date and are excited for what the next chapter brings for the company.

Here is Energize’s statement on Aurora’s Series B that was announced this morning:

Today, Energize Ventures is thrilled to announce its participation in Aurora Solar’s $50M Series B led by ICONIQ Capital. This funding brings Aurora’s total capital raised to more than $70M. Existing investors Fifth Wall and Pear VC are also participating in the round. Along with this funding, Tyler Lancaster (Principal, Energize Ventures) and Doug Pepper (General Partner, ICONIQ Capital) join Aurora co-founders Christopher Hopper and Samuel Adeyemo alongside existing board member Shvet Jain on Aurora’s board.

Here are the key quotes from the Press Release:

“After weathering the economic challenges this year, there is a tremendous opportunity for the solar industry to serve as a growth engine to spur the development of a global clean energy economy. The outlook for solar has never been more promising, and we are thrilled to continue to support resilient, catalytic digital solutions like Aurora that play a critical role in powering the build-out of sustainable infrastructure and accelerating the clean energy transition.”

Tyler Lancaster, Principal at Energize Ventures

“Solar has emerged as one of the key future energy sources, and Aurora is increasingly the go-to solution for solar installers who are looking to affordably deploy solar at scale. The pandemic has accelerated trends towards remote processes, and we are delighted to have the resources to build all the tools that will help the industry thrive in this new environment.”

Samuel Adeyemo, Co-founder of Aurora Solar

“Aurora has become the preeminent software platform for solar installers, with product functionality and an end-user experience that is far ahead of the competition. We’re looking forward to joining the board and supporting Chris, Sam, and the Aurora team on their exceptional growth trajectory to enable the solar industry to scale for a more sustainable future. Aurora Solar joins ICONIQ’s leading vertical software investments including Procore, ServiceTitan and Relativity.”

Doug Pepper, General Partner at ICONIQ Capital.

“This fundraise is not only a big milestone for Aurora, but for the solar industry. It will allow us to continue to build best-in-class tools for solar professionals in the U.S. and internationally, and help us achieve our mission of creating a future powered by clean solar energy.”

Christopher Hopper, Co-founder and CEO of Aurora Solar.

Nuvve is a technology company that has a “Vehicle to Grid” aka V2G technology system that optimizes EV charging between the car owner and the local/broader electric grid. The product’s software optimizes electric vehicle (EV) charging, lowers the total cost of ownership for EVs, and increases the positive environmental impact of EVs. Electric vehicles and their highly distributed batteries are (usually) dormant assets that can help balance the grid with on-demand requests as intermittent renewable energy sources become more dominant portions of our energy supply.

This type of technology is clearly the future. Car owners will opt in to communications that earn them revenue by helping balance the grid. Buildings will look to use EV batteries sitting in their parking lot to manage load as building air conditioners ramp up. School buses returning to their parking lots at 4pm will be ready to provide power to the grid right when the evening power jump occurs. Simply put, the embedded power resource within EVs will do wonders for our power grid. The issue, of course, is the ability to communicate and automate the balancing process with the millions of chargepoints around the country.

In my opinion, the main question for this technology is not if it is required, but when it is required. For Nuvve to be effective and needed, the company requires the existing market conditions:

• Millions of EVs being sold per year, including personal vehicles, fleets, or route vehicles (school buses, etc.)
• Millions of EV charging ports installed, including fast charging and high power sites where fleets are stored
• Major utility grade investments to handle the communication layer and handle the supercharging power requirements needed for many of these vehicles

We as a country are making progress on point #1, primarily due to Tesla but we are still years away from the “millions of charging ports” and years to a decade away from utility-scale readiness. Select other European countries are more ready for this technology and the company is also exploring use cases in Denmark, Netherlands, UK, and Sweden.

Nuvve has a very long horizon before their product is therefore ready for primetime, mass-market usage. And usually when a technology company is years away from commercial use, private market investors remain the sole financing entity. And yet, Nuvve is going public via SPAC with Newborn Acquisition Corp in a sub $150M enterprise value micro-SPAC.

And I believe this SPAC is a great idea. As mentioned in earlier posts, with a low interest rate environment and public market appetite for new energy solutions, this is a company that WHEN it is scalable, should be a very valuable and important part of our energy narrative. So the public investor’s ability to invest at this lower price point (around $130M in equity value) may provide a compelling return as the EV and smart building/utility market develops to allow for this control layer.

If the public market shows interest in this “micro-SPAC” then I suspect many more companies may emerge.

(Please note: none of this is meant as investment advice!)

About a month ago I wrote about Rockwell’s M&A ambitions. That post can be found here. The theme of my research was that Rockwell has software ambitions and is specifically interested in bolstering their topline growth through M&A in 3 areas:

This week’s announcement that Rockwell is acquiring Fiix is another data point that Rockwell is committed to M&A in the areas they previously highlighted.

The Fiix Fit and Strategic Rationale within Rockwell Automation

Fiix is a developer of a cloud-based maintenance and asset management platform designed for companies to schedule, organize and track maintenance activities. The company’s platform mobilizes the maintenance workforce with a mobile experience and interfaces with enterprise software to connect the entire organization, enabling businesses to implement preventive maintenance strategies to increase production and decrease unplanned downtime.

Within the Rockwell framework, Fiix falls perfectly into the Digital Information Services target zone. Given how the Fiix platform also helps manage customer asset management and work orders throughout the product lifecycle, Fiix gives Rockwell reach into inventory management, product reordering and asset management intelligence.

Fiix previously indicated that the company grew topline revenues 70% in 2019 with more than 85% of that revenue being recurring revenue. It is also said Fiix has more than two million assets under management, with more than six million work orders each year. What makes Fiix so intriguing is that it is a multi-tenant SaaS offering that will be able to integrate other digital offerings into its’ core platform. This will allow the application to deliver other digital insights and products from Rockwell to the end-customer.

Rockwell had stated interest in acquiring up to $250M of software revenue and Fiix clearly is a great anchor within that framework. As detailed below, I suspect that Fiix will provide between $25-30M in near-term, annual software revenue to Rockwell.

The Fiix History

Fiix was founded in 2008 by Marc Castel and is headquartered in Toronto, Canada. The company was bootstrapped and capital efficient from 2008 until 2016, when Fiix raised a $5M Series A in January 2016. The Series A and the $12M Series B in 2018 were both led by BuildGroup. Canadian grants also helped capitalize the company’s earliest growth needs.

Alongside the Series B in 2018, James Novak became CEO and has held the title ever since. He was previously President of the company.

In June 2019 the company raised $40M in a Series C round led by Georgian Partners. Alongside that round Fiix acquired Alchemy IoT, an industrial intelligence asset company, adding AI to the startup’s maintenance and asset management software. The price for that acquisition was undisclosed, but Alchemy has raised $4M.

The Exit

Fiix was projected to have approximately $25-30M of revenue in 2020. Using AVEVA’s acquisition of OSIsoft as a comparable exit multiple, we should apply a 10-12x revenue multiple on the Fiix revenue. This implies an acquisition price range between $250M to $300M+/- in exit price. For sake of averages, I will estimate this is a $275M acquisition.

As prices are not disclosed on the earlier financings rounds it is hard to know the precise returns for each stage of the company. The Series A and Series B investments likely purchased BuildGroup ~35% of the company, yielding a nice return. If the 2019 Series C purchased a standard ~20% of the business, then the company had a post-$ value of $200M. A $250-300M exit would not be a homerun but a nice IRR.

Of note, however is that the company was founded in 2008 so it was 12 years to exit. But, interestingly, only 4 years from the Series A until this major financial milestone. It appears that the commercial scale truly ramped up with the Series A capital.

I have now updated the “Industrial Tech Exits” Google Doc with this deal. Found here

Note: all financial figures are $USD

A few days ago a new coalition was announced. The Zeta2030 program is the Zero Emissions Transportation Association that is looking to accelerate adoption of electric vehicles here in the United States. As summarized by Axios, ZETA is calling for five key policy pillars that can, in aggregate, put American on the pathway to full EV adoption by 2030. Those pillars are listed below. Here is my take:

MY TAKE here is that this 2030 goal is likely aggressive. But most importantly, this narrative is simply the arc of our future. Whether it is 2028, 2030 or 2035… this electric transportation movement is happening. I wouldn’t have made such a bold claim even 18 months ago. But here we are: technology is driving down the costs of batteries, more countries are realizing the economic and health benefits of EVs alongside renewable energy mandates, and automakers are finally jumping two feet into the EV movement. Our charging networks are being built and utilities now have clear paths to monetize and participate in the buildout.

It is not a question of IF electric vehicles are the future of mobility. It is merely a question of WHEN the FUTURE is here. I am pleased with the logos endorsing this movement and suspect we will see many more utilities and energy transition firms added to this list in the coming months. Of note, an Energize Ventures portfolio company, Volta Charging, is on this list.

1. Outcome-driven consumer EV incentives. Point-of-sale consumer incentives drive adoption, provide cost reductions and achieve real results in pushing transportation electrification. In addition, incentivizing early retirements while encouraging EV adoption will speed the transition and meet the urgency of the moment.

2. Emissions / performance standards enabling full electrification by 2030. Emission targets are a key piece of protecting public health and sending the correct market signals to support and accelerate the transition to zero emission transportation.

3. Infrastructure investments. Strong federal charging infrastructure investments will drive the electric transportation transition and ensure that the United States is leading the way in a clean recovery where everyone is better off.

4. Domestic manufacturing. We should not only accelerate U.S. transportation electrification, but also work to ensure that we secure domestic economic growth and leadership in EV manufacturing. Federal policies must encourage job creation and economic activity across the entire EV supply chain and lifecycle, from critical materials to vehicles.

5. Federal leadership and cooperation with sub-national entities. Federal support should invest in research and development, provide an aligned vision for electrification, and ensure local leaders are empowered with the expertise and resources to support full vehicle electrification.