The Venture Codex

Participated · Series A · Apr 2012

Stem, Inc. develops AI-driven energy storage systems and operates Athena, an AI platform for customer-sited storage and virtual power plants that optimizes real-time energy use and peak-demand reduction. The company sells fully financed energy storage solutions and participates in energy markets to deliver cost savings and decarbonization benefits. Stem has the largest project finance pool among peers, now over US$650 million, and manages 860 energy storage systems across five U.S. states plus Japan and Canada. The company is expanding into Ontario with a C$200 million commitment from Ontario Teachers' to finance acquisitions of storage projects for industrial customers. Stem expects the Ontario project funds to be fully deployed within the next 12 months and to offer long-term, customer‑site financing to lower energy bills and peak-demand charges. Headquartered in Millbrae, California, Stem is backed by a consortium of strategic and financial investors referenced in its Series D and corporate materials. Stem develops AI-driven energy storage and virtual power plant software (Athena) to optimize timing of energy use and enable participation in energy markets. Its platform manages customer-sited storage and forms networks for capacity and grid services, with partnerships across utilities and commercial providers. As of the article Stem reported over 1,100 sites operational or in construction with an average system size of 500 kWh, a portfolio of 200 MWh, and hundreds of systems under management across five U.S. states and in Japan and Canada. Stem has deployed standalone PowerMonitor controls at 330 locations and has had Athena dispatch over 600 times into the California wholesale market. The company offers market-specific services such as a Global Adjustment offering for Ontario and bundled offerings with CPower, Constellation, and Sunpower. Headquartered in Millbrae, California, Stem says its mission is to build and operate the smartest and largest digitally-connected energy storage network. Stem provides software-driven energy storage and a storage-as-a-service model that lets commercial and industrial customers subscribe with no upfront equipment or installation costs. Its software combines big data and predictive analytics with lithium-ion battery systems to reduce electricity costs and to aggregate distributed capacity for grid services. Stem says its fleet has more than 75 MWh deployed or under contract across more than 480 U.S. locations, serving customers such as Safeway, Wells Fargo, and Adobe. The company’s solutions lower monthly electricity bills by up to 20 percent and enable customers to earn revenue from grid services. Stem created the energy storage project financing model in 2013 and uses third-party project financing to broaden adoption of its technology. The company is headquartered in Millbrae, California, and is funded by a consortium of investors that includes Angeleno Group, Iberdrola (Inversiones Financieras Perseo), GE Ventures, Constellation Technology Ventures, Total Energy Ventures, Mitsui, RWE Supply & Trading, and Mithril Capital Management. Stem provides intelligent energy storage that combines big data, predictive analytics and battery systems to reduce electricity costs for businesses and deliver services to the grid. The company has surpassed 68 MWh of systems operating and under contract and its fleet includes batteries from Samsung and Panasonic as well as Tesla Powerpack systems. Stem’s software platform is informed by more than 2 million field runtime hours and its network spans over 440 facilities in California and Hawaii, including Fortune 500 customers such as Wells Fargo, Safeway, Whole Foods and Reliance Steel. Utilities and grid operators including Southern California Edison, San Diego Gas & Electric and the Hawaiian Electric Company can call upon Stem’s customer‑sited systems, and the company leads in bidding into CAISO real-time and day-ahead markets. Stem recently strengthened its leadership team by hiring Larsh Johnson as CTO to drive software and hardware product development. Headquartered in Millbrae, California, the company emphasizes “storage as a service” to scale smart storage integration and grid resilience. Stem combines energy storage hardware with software that uses big data and predictive analytics to optimize customer energy use and reduce electricity bills. Its customer‑sited systems operate without impacting daily operations while aggregating capacity to provide rapid, flexible services to grid operators. The aggregated network helps ease renewable integration and enhance grid stability. Stem is headquartered in Millbrae, California. The company is pursuing global expansion and is evaluating new markets with support from strategic investors. Recent financing activity (a Series C) strengthened its balance sheet and investor base.

Participated · Equity · Sep 2011

Project Frog creates prefabricated, energy-efficient building components that ship ready for on-site assembly, described in the article as an “IKEA for energy-efficient buildings.” Its product lineup includes education- and medical-specific kits plus flexible “Flex” kits for multiple use cases. Projects typically complete in about six months on average, allowing the company to emphasize affordability alongside energy efficiency. The company is expanding its product design and manufacturing capabilities and says it will ramp production to deliver a significant number of buildings to large school districts and healthcare providers. In 2013 it developed seven times the square footage it did in 2012 and secured a contract with the South San Francisco Unified School District for over 200,000 square feet. Project Frog is further developing healthcare and retail solutions and pursuing additional verticals while targeting scale in the large global construction market. Project Frog delivers semi-custom, pre-engineered kits of energy-efficient building materials and uses advanced 3D modeling to analyze sites and optimize designs for local conditions. Its approach speeds construction and lowers costs by delivering kits ready for on-site assembly. Buildings using Project Frog’s kits consume at least 25% less energy than the strictest U.S. building codes and up to 80% less in some regions. Kits take one to six months to produce—less than half the time required for traditional construction—and projects typically finish in about six months. Project Frog was a winner in GE’s smart grid challenge (one of 10 startups splitting $63 million). The company intends to use new funding to expand sales, execute orders, and support installation of a prefab building at GE’s Learning Center in Ossining, N.Y.

Participated · Equity · Dec 2010

Sungevity is described in the release as a leader in the global solar market that services a growing U.S. footprint as well as the Netherlands, Germany and the United Kingdom. The company completed a large equity and project financing package that the release says will allow it to extend its technology platform and widen its reach into new markets and customers. The financing is positioned to support development of solar projects across the company’s U.S. service areas. Hercules Technology Growth Capital participated in the transaction and continues to maintain a senior secured structured loan to Sungevity. Hercules’ CEO also noted that the funding, coupled with recent U.S. legislation extending the Investment Tax Credit, bolsters confidence in the company and the solar industry. Sungevity sells solar design and integration services directly to consumers and positions itself as a hub for equipment partners, installers and financing partners. The company operates in nine U.S. states and the District of Columbia and is the exclusive partner to retailer Lowe’s. Oakland, Calif.-based Sungevity has expanded internationally, launching services in the Netherlands and Australia. It doubled its U.S. sales in 2013. Financial partners include US Bank, Citibank and SunRun. Investors and utilities have shown increasing interest in solar installers as industry fundamentals have improved. Sungevity is an Oakland, CA-based provider of distributed solar solutions that uses proprietary web-based technology to design and deliver solar installations for customers and partners. Led by CEO Andrew Birch, the company operates in nine U.S. states — Arizona, California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Jersey and New York — and has international operations through Netherlands-based Zonline and a joint venture in Australia called Sungevity Australia. The company announced a $15M equity financing that includes investment from GE Ventures and follows a prior $125M round earlier in 2013. Sungevity intends to use the new capital to develop new service offerings and expand its global presence. Its core product centers on web-based tools that streamline solar system design and customer acquisition for distributed solar markets. The financing positions the company to grow service capabilities and geographic reach. Sungevity provides an online iQuote process and solar lease program that delivers firm quotes within 24 hours without a home visit by leveraging web-based analytics and satellite imagery. The company emphasizes a Solar Social Strategy and partnerships (including Lowe's, Credo Mobile and Sierra Club) plus proprietary referral software to lower customer acquisition costs. In 2012 Sungevity focused on operational efficiencies, reduced installation costs by 30%, and now acquires the majority of new clients through referrals and partner channels. It partners with a network of preferred local installers to offset installation staffing costs and uses internet and satellite technology to cut overhead. Sungevity serves nine U.S. states and has an international presence through Netherlands-based Zonline and a joint venture in Australia called Sungevity Australia. The company is a B Corp and states its mission is to accelerate residential solar into the mainstream. Sungevity offers Internet-based solar leases and sales that let homeowners install panels with little to no money down and pay a monthly lease plus the cost of electricity generated. The company uses satellite imagery (from sites like Bing) to assess homes and deliver quotes within 24 hours and allows customers to electronically sign leases online. Sungevity emphasizes a centralized, web-driven model and plans to roll out more consumer-side software and streamline paperwork. It currently offers leases in California, Arizona and Colorado and is planning to expand to many states next year, with a focus on the Northeast. The company has shorter, 10-year power purchase agreements and leases compared with the industry standard of 20–25 years. Operationally, Sungevity grew its California market share from 0.4% to 2.9% last year and increased kilowatts sold tenfold to 4.7 megawatts; the company operates largely out of its base in Oakland, Calif.