New York-based David Vitality raised $ 4.1 million to construct the usual renewable power oil.
“We intend to build the standard oil for renewable energy,” said James McGinniss, co-founder and chief executive officer of David Energy, in a statement announcing the new $ 19 million debt and equity financing round.
McGinniss’ company aims to promote the adoption of renewable energy and reduce energy consumption in the built environment by creating a service that works on both sides of the energy market.
The company combines energy management services for commercial buildings through the software it has developed with the ability to sell energy directly to customers in order to reduce energy consumption and the associated carbon footprint of the built environment.
The company’s software, Mycor, leverages building demand data and the assets the building has to shift users’ energy consumption to the times when renewables are most available and cheapest.
It’s a novel approach to an old idea of creating environmental benefits by reducing energy consumption. With its technology, David Energy tracks both the market price for energy and the energy consumption of the buildings it manages. The company sells energy to customers at a fixed price and then uses its windows on energy markets and energy demand to make money with the various electricity prices.
As a result, the company had to raise $ 15 million on a monthly revolving credit facility from Hartree Partners. So it could pay for the electricity its customers bought in advance.
Credit: Getty Images
There are currently a number of tailwinds out there that help grow a company like David Energy. Given the huge sums of money earmarked for energy savings and energy efficiency improvements, companies like David who promise to control energy use to reduce demand will be huge beneficiaries.
“When we look at the macro shift and the attention that is being given to things like battery storage and microgrids, we feel like we’re starting this at the perfect time,” said McGinniss. “Were offer [customers] Market rates and then return the savings to them. You will receive the software with a market energy supply contract and receive the savings back. B.Ringing the whole bundled package together really brings it all together. ”
The story goes on
In addition to the credit facility, the company raised $ 4.1 million in venture funding from investors Led by Equal Ventures and involving Operator Partners, Box Group, Greycroft, Sandeep Jain and Xuan Yong from RigUp, returning angel investor Kiran Bhatraju from Arcadia and Jason Jacobs recently launched My Climate Journey Collective, an early stage climate technology fund.
“Producers of renewable energies differ fundamentally in their variable, distributed and digitally native nature from their predecessors fossil fuels, while customer loads such as heating and driving are shifted to electricity consumption from gas. The sands of market power are shifting and incumbents are ill-positioned to adapt to changing customer needs. Therefore, there is an enormous opportunity for us to make capital. ”
Founded by McGinniss, Brian Maxwell, and Ahmed Salman, David Energy raised $ 1.5 million in pre-seed funding as early as March 2020.
As the company expands, its relationship with Hartree, an energy and raw materials trading desk, becomes even more important. As the startup noted, Hartree is the gateway David needs to do business with the energy markets. The trader provides a balance sheet for working capital to purchase energy on behalf of David’s customers.
“Renewable energies are fundamentally changing energy markets and new models and tools need to emerge,” said Dinkar Bhatia, co-head of North American Power at Hartree Partners. “James and the team have identified a significant opportunity in the marketplace and have the right strategy to execute. Hartree is excited to be a raw materials partner to David Energy in the launch of the new Smart Retail platform and looks forward to making DE Supply the leading retailer in the market“said McGinniss.
David has now Retail licenses for power in New York, New Jersey, and Massachusetts and plan to expand across the country.
“David Energy will reinvent the way hundreds of billions of dollars of energy are used annually,” said Rick Zullo, investor at Equal Ventures. “”The creativity of business models and finding ways to change user behavior with new models is just as important, if not more important, than technological innovation itself. “
Zullo said his company selected David Energy as the leader of the table after years of searching for a commercial renewable energy startup. The central insight was to find a service that does not address the new building that already works with first-class energy management systems, but rather the millions of square meters on which the latest and best energy management systems are not used.
“Finding something that would mass-market this was something we had really been looking for since Equal Ventures was founded,” said Zullo.
The innovation that made David attractive was the business model. “There’s a landscape of hundreds of dead businesses,” said Zullo. “They found a way to subsidize the service. They’re giving away at little or no cost and pulling these into line items. Partnering with Partree gives them the ability to be the cheapest and also the best for you and the highest margin regional Energy supplier in the market. “