The SEC gets seed funding

Hey everyone, and welcome back to Chain Reaction

In our Chain Reaction podcast this week, Anita and I chatted with Slow Ventures’ Jill Gunter on why there are so many dang blockchains out there and if we’re headed to a future where everything is built on a single ‘chain. More details below.

Last week, we chatted a bit about the political isolation of Bitcoin that’s happening as a result of its energy footprint. In the podcast this week, we talked about how the Wikimedia Foundation outlawed crypto donations after accepting them for 8 years just because of the the energy footprint of Bitcoin and Ethereum. More than a decade in, this saga is only getting started. This week, we talked about how the crypto cops are trying to keep up with the web3 explosion.

You can subscribe on TechCrunch’s newsletter page and get this in your inbox Thursday afternoon. Follow me on Twitter while you’re at it so you can get important info like some crucial NFT etiquette.

the hottest take

This week, the government’s top crypto cops got some new funding to build out their team and they issued a nice little press release to tell the crypto industry that they’re coming for them. The SEC is expanding the team from 30 to 50 and renaming the previously titled “Cyber Unit” to the “Crypto Assets and Cyber Unit.” Hiring up to 20 additional enforcement officers is a big deal for the SEC, though in cryptoland that kind of headcount is what comes to most startups after a seed fundraise.

It’s always been an uphill battle for the SEC, but 10 years ago the threat of someone spinning up securities willy nilly from their basement wasn’t quite what it is today. The crypto faucet has released thousands upon thousands of suspect projects that I’m sure the regulatory body would like to touch, but for the time being they’re left with the nearly impossible task of moderating an industry that’s exploding and expanding its ambitions with at-most modest regard for the spirit of securities law.

As we touched on a bit in the podcast this week, the news of the SEC crypto unit’s expansion wasn’t welcomed warmly by folks in the industry, who say what they want is more guidance before there’s more enforcement. This isn’t entirely surprising, of course. It’s always been a nice little talking point for crypto companies on the topic of regulation — they can say that they actually want more regulation, because they know how far out most of that regulation is. Then, when action is eventually taken against them by the government they can complain that the under-resourced agency has it out for them because they’re singling them out over others who are doing the same thing. This has been the case for a while now.

This isn’t to say the SEC has done nothing, I’m sure they’re much more focused on big ticket cases at this point. The agency says they’ve brought more than 80 “enforcement actions” against fraudulent and unregistered offerings “resulting in monetary relief totaling more than $2 billion.” That’s a nice chunk of change but still a drop in the bucket.

Now, for the SEC’s part, they say that they are focused on using their beefed up team to crack down on fraudulent or illicit activity in the following areas: Crypto asset offerings, Crypto asset exchanges, Crypto asset lending and staking products, Decentralized finance (“DeFi”) platforms, Non-fungible tokens (“NFTs”), and Stablecoins. That’s… pretty much everything there is, though they didn’t specifically say anything about the metaverse I suppose… For folks warning of an imminent regulatory crackdown on crypto, I think it’s important to set expectations and take stock of who exactly is on the other side of the equation.

pod #3

Hello Chain Reaction friends! It’s Anita here again with an update on our latest podcast episode.

Yuga Labs’ chaotic NFT land sale stole the show in the crypto world this week, temporarily clogging the entire Ethereum network and leaving some users to pay thousands of dollars in gas fees for NFTs they never actually got. Yuga has pledged to refund gas fees on the failed transactions, but the crypto community has been abuzz with all sorts of hot takes and even conspiracy theories about why and how we got here, which Lucas and I unpacked on the show.

Our guest this week was Jill Gunter, venture partner at Slow Ventures and co-founder of a new, privacy-focused layer-one blockchain, Espresso Systems. I already got in the weeds with Jill in my article about Espresso after its Series A round last month, so for this week’s pod, Lucas and I asked her some bigger questions we’ve been mulling over, like why there are so many different blockchains in the first place and what it will take for tradfi to get comfortable with crypto.

Subscribe to Chain Reaction on Apple, Spotify, or your alternative podcast platform of choice to keep up with us every week.

follow the money

Where startup money is moving in the crypto world:

  1. Crypto publication Decrypt raises $10 million Hack VC, Canvas Ventures, others
  2. ‘Physical’ NFT marketplace Americana gets $6.9 million from Seven Seven Six
  3. DAO tooling startup Syndicate raises $6 million from a16z, Carta, others
  4. NFT sports betting app Stakes nabs $5.3 million from DCG
  5. DeFi startup MYSO raises $2.4 million from Huobi
  6. Metaverse eSports group Team DAO gets $5 million from Klaytn and Animoca
  7. Web3 sports platform OneFootball scores $300 million from Liberty City Ventures
  8. Crypto wallet app Argent grabs $40 million from Index
  9. Layer 2 blockchain Minka raises $24 million from Tiger
  10. NFT/crypto wallet Venly gets $23 million from Courtside Ventures

added analysis

Some more crypto analysis from our TechCrunch+ subscription service curated by Jacquelyn Melinek

Why Axie Infinity’s co-founder thinks play-to-earn games will drive NFT adoption
The popular play-to-earn crypto game Axie Infinity hit huge strides in 2021 from a massive spike in users to its total revenue rising over 50,000% from the same time last year. But as we’re almost halfway through 2022, a question stands: Is Axie holding up to its hype? Data is saying not quite, but Axie’s Co-founder Jeff “Jiho” Zirlin is unfazed. “You can’t have exponential growth all the time; there is a refractory period,” he said, but the game has more plans in the pipeline for the next growth cycle.

Crypto Bahamas signals stronger ties between old and new worlds of finance
I may be recovering from a sunburn, but don’t feel bad for me. I was down in the Caribbean at Crypto Bahamas, a conference co-hosted by crypto exchange FTX and investor forum SALT, where over 2,000 invite-only attendees discussed the nature of crypto as it grows in the traditional finance market and what’s needed for the future of this nascent digital asset industry to succeed. The event also was significant because this was both FTX and SALT’s first crypto-focused conference and seems to be the beginning of a bridge being built between the two worlds of traditional finance and decentralized finance.

Bitcoin miners say energy efficiency and regulatory certainty are crucial for the industry’s success
Speaking of Crypto Bahamas…some of the biggest names in bitcoin mining at the event took the stage and talked about what they think is needed first and foremost for this industry to succeed: efficiency and regulatory clarity. Once there is regulation in pace, the pace of innovation could pick up for miners across the US, the panelists said. But what does this mean for the energy industry as a whole?

Have a great weekend! And remember, you can subscribe on TechCrunch’s newsletter page and get this in your inbox Thursday afternoon.

Lucas Matney

After ultracharged growth, battery maker EcoFlow comes for the glampers

In recent years, episodes of extreme climate crises and power outrages have driven doomsday preppers to plan for off-the-grid survival scenarios. The mentality has been a boon to EcoFlow, a Shenzhen-based power generating and storing unicorn, which racked up $220 million in revenues last year as consumers in the US demanded its solar-powered portable power stations.

Off the back of a remarkable growth phase — revenues surged 50x between 2019 and 2021 — the startup, which was founded by a group of veterans from drone giant DJI in 2017, discovered a new niche to crack: glamping. In a call with TechCrunch, its co-founder and CEO Lei “Bruce” Wang envisaged a future of being in nature while enjoying a cool breeze sent from EcoFlow’s outdoor air conditioner, which will launch in the US in the coming months.

Glamping lovers can already plug a range of appliances, like electric ovens and stoves, into portable battery stations, but air conditioners are tricky because most of them use alternating current, which isn’t compatible with battery charging and has lower efficiency, the founder explained. The outdoor airconditioning unit that EcoFlow is revealing uses direct current instead and can thus be charged by batteries.

Hardcore nature-loving campers might scoff at the idea of outdoor air conditioning. I was bewildered by the proposal as well, but Wang rightly reminded me that if burnout urbanites make the effort of driving out into nature, many of them would rather do it the comfortable and indulgent way.

“Wherever people go, whether it’s at or away from home, they can achieve a lot more with electricity,” Wang explained the rationale for expanding beyond making batteries and into electronic appliances. “We now cover the entire loop [of use cases], from power generation, power storage, to power consumption.”

A greening dream

EcoFlow co-founder and CEO Lei “Bruce” Wang

Wang grew up in the vicinity of the Mu Us Desert in northwestern China, where he saw how the government’s ecological restoration effort helped combat severe desertification in the area. The childhood experience planted in his mind a goal to pursue a career in renewable energy, which led him to complete a Ph.D. in energy storage technologies at the University of Hong Kong and later help establish DJI’s battery R&D department.

Having seen the tide in the energy industry was turning, Wang decided to start his own company in 2017. “Replacing fossil fuel with renewable energy is the fundamental way to increase energy consumption per capital while still achieving sustainable growth,” the founder asserted.

At the same time, declining raw material costs were making it easier to run a battery startup. “Between 2010 and 2020, the prices of lithium batteries and solar panels have gone down 10 times. Such conditions would prompt anyone conducting technology research to become a tide player, to take a chance,” Wang recalled.

Lithium’s recent price spikes and supply chain disruptions haven’t concerned Wang. EcoFlow works with strategic partners to ensure a steady flow of supply, the founder said, and he believed lithium costs will eventually tail off in the long run.

The startup has come a long way since its formative days as a Kickstarter project. It has raised over $100 million in funding from notable investors including Sequoia Capital China and GL Ventures, the early-stage arm of private equity powerhouse Hillhouse Capital. With the category expansion, as well as its plans to push into new markets like its backyard China, EcoFlow expects to generate $630 million in revenues this year, which would make its growth between 2019 and 2022 almost 150x.

Such growth is supercharging EcoFlow’s path to an initial public offering. Last year, EcoFlow reached a valuation of $1 billion and announced plans to go public on the Shenzhen Stock Exchange. The company has entered a preliminary “tutoring” period with the city’s exchange regulators and is aiming to float its stocks within the next two to three years.

Wang said the Shenzhen-based exchange, which was designed for encouraging technological innovations, will attract investors who “understand the new energy industry,” though he doesn’t rule out the possibility of an overseas listing down the road. Operating in profit, EcoFlow declined to disclose whether it will raise another financing round before its IPO.

Powering global customers

Unlike many hardware makers that venture out of China only after proving their products at home, EcoFlow went after overseas markets at the outset. It first went to Japan, a country prone to natural disasters and whose consumers are known to be tech-savvy. Today, Japan and the US are the two largest revenue drivers for EcoFlow among the 100-something markets it ships to.

EcoFlow recently started selling its battery products in China where a rising middle class has demonstrated a growing fascination with luxury camping. The company is also exploring opportunities in emerging markets across Asia, Africa, and Latin America, where it wants to supply households hit by electricity shortages with “affordable” products, Wang said.

When asked how EcoFlow managed to build a foothold in foreign markets, Wang, who looks to Tesla and Apple for inspiration, offered the obvious though tough playbook: understand your customers. “We say internally that ‘the customers are never wrong. If anything goes wrong, it must be us.”

To put the adage into practice, EcoFlow operates a fairly international office in Shenzhen, a full on-the-ground team in Japan, a small but growing force in the US, and is soon hiring in Europe. Globally, EcoFlow has over 1,000 employees working on an extended value chain, spanning from R&D, which accounts for 40% of its staff, to after-sales service.

While many Chinese consumer tech startups find it increasingly challenging to operate overseas as geopolitical tensions threaten to put them in the crosshairs of foreign authorities, as illustrated by giants like TikTok and Huawei, Wang doesn’t see the same hurdle.

“At the end of the day, users will pay for a good product, which is why I like being in the business-to-consumer space,” the founder said confidently. “Furthermore, our products are helping to promote environmental sustainability, which is a universal goal that can strike a chord among consumers around the globe.”

Oklo’s Caroline Cochran and Swell’s Sulemon Kahn talk scaling alternative energy at TC Sessions: Climate

Stopping the dire pace and consequences of climate change requires a diverse range of climate technologies across multiple fronts, and alternative energies play an essential role. However, changing the way the world generates and consumes energy is just one of many formidable challenges. Scaling alternative energy solutions and achieving profitability are two more, especially important for venture-backed companies.

We want to explore the complexities of those challenges, which is why we’re excited to announce that Caroline Cochran, co-founder and COO of Oklo, and Suleman Khan, CEO at Swell Energy will join us in person and on stage at TC Sessions: Climate 2022 (presented by Extreme Tech Challenge) on June 14 in Berkeley, California.

The two startups focus on very different alternative energies. Oklo builds micro-nuclear reactors designed to power college campuses, industrial sites, large companies and remote locations. In an industry-changing twist, Oklo’s tiny reactors run on nuclear waste. Two years ago, the Idaho National Laboratory gave Oklo access to recovered spent nuclear fuel to develop the startup’s advanced fission technology. The company aims to have several micro-reactors operational by 2025.

Swell Energy, a renewable energy and advanced grid services company, specializes in smart home energy systems (e.g. battery-based energy storage) and virtual power plants. Last year, it partnered with Nuvve, a global cleantech company, to offer residential customers comprehensive home energy systems by combining battery storage, solar and smart EV charging.

During this panel discussion, we’ll ask Cochran and Kahn for their respecitve takes on the remaining challenges to scaling alternative energy solutions and building healthy businesses amid growing complexities. Given that individual consumers and private enterprises have different clean-sourcing demands, we’ll dig into whether the energy market is or isn’t changing fast enough to meet those varied needs and expectations.

We’ll start from there and see where the conversation leads. No matter which direction it takes, the highly qualified Cochran and Kahn will deliver crucial perspectives on the booming alternative energy industry

Caroline Cochran, founder and COO of Oklo, leads the team working on building advanced micro-nuclear reactors that use nuclear waste as fuel. Her career experience includes engineering, entrepreneurship, research, economics, policy, sales and marketing. 

Cochran has worked on technologies ranging from solar vehicles and advanced fission to oil and natural gas. She earned a bachelor’s degree in economics and a bachelor’s of science degree in mechanical engineering from the University of Oklahoma and a master’s degree in nuclear engineering from MIT.

Suleman Khan, the CEO of Swell Energy, directs the company’s customer acquisition, project development, project finance and grid services efforts. In the decade prior to launching Swell, Kahn worked at the intersection of renewable energy and structured finance, productizing solar and energy storage for the residential and commercial markets.

Kahn was also instrumental in establishing new energy divisions within various companies — including Tesla, where he helped build what would later become Tesla Energy. His earlier career includes a stint at Citigroup where he worked on the structured credit products desk, as well as within Citigroup’s investment banking mergers and acquisitions division and at Prudential’s alternative investments group. 

Don’t miss an in depth conversation with Oklo’s Caroline Cochran and Swell Energy’s Suleman Khan about the promise of alternative energy solutions and the challenges that remain to scaling them for mass use and profitability.

TC Sessions: Climate 2022 is all about the growing wave of startups, technologies, scientists and engineers dedicated to saving our planet and, of course, the investors who finance them. Join us in-person on June 14 at UC Berkley’s Zellerbach Auditorium. Register now and save $200.


AWS targets the energy industry with launch of the AWS Energy Competency Program

Amazon today announced a new program that will formally identify AWS Partners who develop specialized solutions aimed at the energy industry. The new AWS Energy Competency Program, as it’s called, will identify these specialized partners who have already demonstrated the technical expertise and customer success that can help energy producers around the world build and implement AWS-powered solutions using the latest technology, while also navigating the transition to a more sustainable energy future.

Today, many AWS Partners work with the energy industry to help them take advantage of AWS technology, including for managing the operation of oil and gas assets from the exploration phases, to the gathering, processing, transportation, management, and maintenance of those operations, as well as those in the renewable and sustainable space. These industries are now accelerating the adoption of solutions like cloud computing, Internet of Things (IoT), artificial intelligence (AI), and machine learning (ML), says Amazon.

The new AWS Energy Competency Program will help the industry better identify the AWS Partners who have the specific expertise when it comes to working with the world’s energy producers, including those that can help them develop a portfolio that includes sustainable and renewable energy assets.

At launch, the program includes 32 global partners who also worked with AWS to help develop the new program for energy producers. This group includes those who can help with specialized solution areas, industry verticals, or workloads. This is now one of the toughest designations an AWS Partner can achieve, notes Amazon, as partners have to undergo a rigorous technical validation related to energy industry-specific best practices.

Image Credits: Amazon

One partner, Slalom, has been helping North American energy company TC Energy manage 44,000 kilometers of natural gas pipelines. TC Energy worked with the partner to develop a business intelligence application that uses machine learning to help customers optimize gas scheduling and throughput. Another partner, Unleash Live, an AI video analytics provider, helped industrial engineering solutions provider Worley, which operates wind farms, solar parks, hydropower, natural gas projects, and more. Worsley is using Unleash Live to leverage drones and computer vision for its inspections.

Other partners can help provide solutions that include upstream, midstream, downstream, new energies, core business applications, health, safety, and environmental, and data and analytics, says Amazon. AWS Partners now interested in joining the program can view the Validation Checklists for both AWS Services Partners and AWS Software Partners to get started.

Al Gore puts $600M into UK Green energy-tech startup Octopus Energy Group

Former Vice President Al Gore has invested $600 million of equity into U.K. energy startup Octopus Energy Group via his Generation Investment Management vehicle, taking a stake of approximately 13% in the business. The investment means Octopus has attained a valuation of around $4.6 billion.

Octopus has made a name for itself in energy circles largely because of its “Kraken” technology platform, which it claims is able to reroute energy from renewable sources around a network far more efficiently than competitors. Octopus is now managing 17 million energy accounts in 12 countries in this manner.

Generation is a $36 billion fund management business with a specific remit to back sustainable businesses.
 Octopus will use the proceeds of Generation’s strategic investment to push further into the U.S. market, where it already has a toe-hold in Texas.

The Generation investment follows an earlier equity investment from Origin Energy, Tokyo Gas and the acquisition of Upside Energy, specialists in smart grid technology. Octopus’s retail businesses are now in the U.K., U.S., Germany, Spain and New Zealand, plus it has licensing agreements with Good Energy, Hanwha Corporation, Origin Energy, Power and E.ON.

Octopus has also earlier launched Electric Juice, an electric vehicle “roaming network” of 100,000 charge points across Europe that allows users to charge their personal Octopus Energy account when they charge their EVs. It’s also partnered with Tesla to launch Tesla Power in the U.K. and Germany.

Speaking for Octopus Energy, founder and CEO, Greg Jackson said: “Whilst the U.K. energy market is currently in a tough state, it’s highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels. So we are delighted to announce our agreement with Generation Investment Management, created to back sustainable companies changing the world for the better.”

“We run 300 stress tests, twice a week. For us, as a tech company, it’s just algorithmic. For rival companies, they’re … doing it on spreadsheets.”

Speaking for Generation Investment Management, Tom Hodges, partner in the long-term equity strategy, said: “Octopus Energy has an extraordinarily good fit with Generation’s mission of investing over the long term to support system and climate-positive companies. The world is at the early stages of an unprecedented energy transition which is essential to reach the goals of the Paris Agreement. This can be done in a way that is better for the environment and consumers.”

In an interview via Zoom, Jackson told me that there are two parts to the current global energy crisis: “One is the energy wholesale price crisis. Global gas prices have trebled or quadrupled in the last year. That’s not only causing gas to be expensive but because a lot of electricity comes from gas it’s pushing up electricity prices. I think this is really revealing the extent to which companies have been selling long and buying short. So companies that are currently folding are larger ones which had sold a one-year contract, but only bought six months worth of energy and they were keeping their fingers crossed for the rest of it.”

He said Octopus has “always been 100% hedged. For us, energy retail is just one of our businesses. And we’ve got 13 businesses in the group. What we’ve always sought to do is serve an outstanding service and a really, really risk-managed back end. We run 300 stress tests, twice a week on our hedging position. For us, as a tech company, it’s just algorithmic. For rival companies, they’re either not doing that or they are doing it on spreadsheets and it just doesn’t work.”

“The reality is this crisis is entirely a fossil-fuel crisis. And if we’d been using renewables as a primary source and then gas as a backup we wouldn’t be in this situation,” he added.

He said Octopus is an owner-operator of wind, solar and biomass renewable energy sources, with £3.5 billion in generation assets and plans to 10x that over the next 10 years.

The generation deal consists of a $300 million immediate investment, with $300 million to follow by June 2022, subject to certain further funding conditions.

Octopus has also established the Centre for Net Zero, an independent London-based research facility that is taking the fight against climate change to the government level and also invested £10 million into an R&D and Training Centre for Decarbonisation of Heat.

Workrise, once known as RigUp, raises $300M at a $2.9B valuation

Workrise, which has built a workforce management platform for the skilled trades, announced today that it has raised $300 million in a Series E round led by UK-based Baillie Gifford that values the company at $2.9 billion.

New investor Franklin Templeton joined existing backers including Founders Fund, Bedrock Capital, Andreessen Horowitz (a16z), Moore Strategic Ventures, 137 Ventures and Brookfield Growth Partners in putting money in the round. WIth this latest financing, Workrise has now raised over $750 million.

You may know Austin-based Workrise better as its former name, RigUp. The company changed its name earlier this year to reflect a new emphasis on industries other than just oil and gas after the industry took a beating in recent years.

In 2020, Workrise laid off one-quarter of its corporate employees as the industry took an even bigger hit from the COVID-19 pandemic. It currently has over 600 employees in 25 offices.

Despite the rocky start to the year, Workrise apparently ended up rebounding. Its gross revenue has tripled since 2018, going from just under $300 million to about $900 million to close out 2020.

Workrise was founded in 2014 as a marketplace for on-demand services and skilled labor in the energy industry. In October 2019, it raised a $300 million Series D round led by Andreessen Horowitz(a16z) that valued the company at $1.9 billion.

Since then, Workrise has broadened its reach to include wind, solar, commercial construction and defense industries. In a nutshell, it connects skilled laborers with infrastructure and energy companies looking to staff and manage projects efficiently. Workrise’s online platform matches workers with over 500 companies in its network, manages payroll and benefits and provides access to training.

The company plans to use its new capital to continue to expand into new markets.

“The shift to clean energy and a redoubling of investment in infrastructure are opening up jobs that are desperately in need of filling,” said Workrise co-founder and CEO (and former energy investor) Xuan Yong in a statement. “Our platform makes it easier for skilled workers to find work and for companies to hire in-demand workers.”

Dave Bujnowski, investment manager at Baillie Gifford, points out that Workrise’s online management platform is “disrupting a sector that’s so far been slow to adopt new technologies.”

Workrise now serves more than 70 metro areas in the U.S., including Atlanta, where the company is matching trade workers with commercial construction companies, and in Broomfield, CO where the company trains and matches workers to jobs across the U.S. wind industry. 

The company also offers trade workers access to training that equips them for energy and infrastructure jobs that are on the rise. Last year, Workrise placed more than 4,500 workers, or nearly a third of all its workers placed in 2020, in renewable-energy jobs. 

Specifically, the company says in total, it placed 8,000 unique workers in jobs in 2019 with 13% in renewables. That number jumped to 15,000 in 2020.

The energy ecosystem should move to make the ‘energy internet’ a reality

As vice president of Innovation at National Grid Partners, I’m responsible for developing initiatives that not only benefit National Grid’s current business but also have the potential to become stand-alone businesses. So I obviously have strong views about the future of the energy industry.

But I don’t have a crystal ball; no one does. To be a good steward of our innovation portfolio, my job isn’t to guess what the right “basket” is for our “eggs.” It’s to optimally allocate our finite eggs across multiple baskets with the greatest collective upside.

Put another way, global and regional trends make it clear that the Next Big Thing isn’t any single thing at all. Instead, the future is about open innovation and integration of elements across the entire energy supply chain. Only with such an open energy ecosystem can we adapt to the highly volatile — some might even say unpredictable — market conditions we face in the energy industry.

Just as the digital internet rewards innovation wherever it serves the market — whether you build a better app or design a cooler smartphone — so too will the energy internet offer greater opportunities across the energy supply chain.

I like to think of this open, innovation-enabling approach as the “energy internet,” and I believe it represents the most important opportunity in the energy sector today.

The internet analogy

Here’s why I find the concept of the energy internet helpful. Before the digital internet (a term I’m using here to encompass all the hardware, software and standards that comprise it), we had multiple silos of technology such as mainframes, PCs, databases, desktop applications and private networks.

As the digital internet evolved, however, the walls between these silos disappeared. You can now utilize any platform on the back end of your digital services, including mainframes, commodity server hardware and virtual machines in the cloud.

You can transport digital payloads across networks that connect to any customer, supplier or partner on the planet with whatever combination of speed, security, capacity and cost you deem most appropriate. That payload can be data, sound or video, and your endpoint can be a desktop browser, smartphone, IoT sensor, security camera or retail kiosk.

This mix-and-match internet created an open digital supply chain that has driven an epochal boom in online innovation. Entrepreneurs and inventors can focus on specific value propositions anywhere across that supply chain rather than having to continually reinvent the supply chain itself.

The energy sector must move in the same direction. We need to be able to treat our various generation modalities like server platforms. We need our transmission grids to be as accessible as our data networks, and we need to be able to deliver energy to any consumption endpoint just as flexibly. We need to encourage innovation at those endpoints, too — just as the tech sector did.

Just as the digital internet rewards innovation wherever it serves the market — whether you build a better app or design a cooler smartphone — so too will the energy internet offer greater opportunities across the energy supply chain.

The 5D future

So what is the energy internet? As a foundation, let’s start with a model that takes the existing industry talk of digitalization, decentralization and decarbonization a few steps further:

Digitalization: Innovation depends on information about demand, supply, efficiency, trends and events. That data must be accurate, complete, timely and sharable. Digitalization efforts such as IoE, open energy, and what many refer to as the “smart grid” are instrumental because they ensure innovators have the insights they need to continuously improve the physics, logistics and economics of energy delivery.

Decentralization: The internet changed the world in part because it took the power of computing out of a few centralized data centers and distributed it wherever it made sense. The energy internet will do likewise. Digitalization supports decentralization by letting assets be integrated into an open energy supply chain. But decentralization is much more than just the integration of existing assets — it’s the proliferation of new assets wherever they’re needed.

Decarbonization: Decarbonization is, of course, the whole point of the exercise. We must move to greener supply chains built on decentralized infrastructure that leverage energy supply everywhere to meet energy demand anywhere. The market is demanding it and regulators are requiring it. The energy internet is therefore more than just an investment opportunity — it’s an existential imperative.

Democratization: Much of the innovation associated with the internet arose from the fact that, in addition to decentralizing technology physically, it also democratized technology demographically. Democratization is about putting power (literally, in this case) into the hands of the people. Vastly increasing the number of minds and hands tackling the energy industry’s challenges will also accelerate innovation and enhance our ability to respond to market dynamics.

Diversity: As I asserted above, no one has a crystal ball. So anyone investing in innovation at scale should diversify — not just to mitigate risk and optimize returns, but as an enablement strategy. After all, if we truly believe the energy internet (or Grid 2.0, if you prefer that term) will require that all the elements of the energy supply chain work together, we must diversify our innovation initiatives across those elements to promote interoperability and integration.

That’s how the digital internet was built. Standards bodies played an important role, but those standards and their implementations were driven by industry players like Microsoft and Cisco — as well as top VCs — who ensured the ecosystem’s success by driving integration across the supply chain.

We must take the same approach with the energy internet. Those with the power and influence to do so must help ensure we aggressively advance integration across the energy supply chain as a whole, even as we improve the individual elements. To this end, National Grid last year kicked off a new industry group called the NextGrid Alliance, which includes senior executives from more than 60 utilities across the world.

Finally, we believe it’s essential to diversify thinking within the energy ecosystem as well. National Grid has sounded alarms about the serious underrepresentation of women in the energy industry and of female undergraduates in STEM programs. On the flip side, research by Deloitte has found diverse teams are 20% more innovative. More than 60% of my own team at NGP are women, and that breadth of perspective has helped National Grid capture powerful insights into companywide innovation efforts.

More winning, less predicting

The concept of the energy internet isn’t some abstract future ideal. We’re already seeing specific examples of how it will transform the market:

Green transnationalism: The energy internet is on its way to becoming as global as the digital internet. The U.K., for instance, is now receiving wind-generated power from Norway and Denmark. This ability to leverage decentralized energy supply across borders will have significant benefits for national economies and create new opportunities for energy arbitrage.

EV charging models: Pumping electricity isn’t like pumping gas, nor should it be. With the right combination of innovation in smart metering and fast-charging end-point design, the energy internet will create new opportunities at office buildings, residential complexes and other places where cars plus convenience can equal cash.

Disaster mitigation: Recent events in Texas have highlighted the negative consequences of not having an energy internet. Responsible utilities and government agencies must embrace digitization and interoperability to more effectively troubleshoot infrastructure and better safeguard communities.

These are just a few of the myriad ways in which an open, any-to-any energy internet will promote innovation, stimulate competition and generate big wins. No one can predict exactly what those big wins will be, but there will surely be many, and they will accrue to the benefit of all.

That’s why even without a crystal ball, we should all commit ourselves to digitalization, decentralization, decarbonization, democratization and diversity. In so doing, we’ll build the energy internet together, and enable a fair, affordable and clean energy future.

Arcadia steps in to Texas’ startup energy market with the acquisition of Real Simple Energy

On the third greatest television show of all time (sorry Rolling Stone), one of Texas’ most famous fictional football players once said, “When all the scared rats are leaving a sinking market, that’s when a real entrepreneur steps in — a true visionary.”

If that’s the case, then the startup renewable energy retail reseller Arcadia may be a true visionary. Even as energy startups servicing customers throughout the great state of Texas are forced to throw in the towel, the Washington-based, consumer-focused renewable energy power provider (based on renewable energy certificates purchased on the open market), is making an acquisition to enter the Texas market.

The company is buying Real Simple Energy, which not only marks the company’s availability in all 50 states, but gives Real Simple Energy customers access to both wind and solar power generating projects. The company said it  will leverage Real Simple Energy’s platform and expertise to secure the best rates for members, monitor for better savings, and provide a smarter yet simpler energy experience.

“Recent events in the Texas market prove that customers shouldn’t be exposed to wholesale or variable rates, and want an energy advocate to protect them,” said Kiran Bhatraju, CEO and Founder of Arcadia. “Both Arcadia and Real Simple Energy recognize the challenges Texas homeowners and renters have historically faced in the energy buying process, and we remain committed to removing these confusing barriers.”

Texans have consistently paid more for power than consumers that buy their energy from regulated market participants thanks to the state’s disastrously deregulated power markets. The combined companies are pitching fixed rate contracts to Texas consumers that won’t be vulnerable to bill spikes, but will offer average savings above the flat rates regulated utilities offer.

“The deregulated energy industry, especially in Texas, has underserved customers and as a result, most customers overpay for electricity and receive poor customer service. Using technology, we are helping customers realize the promise of deregulation and always get the best fixed rates available,” said Trent Crow, CEO of Real Simple Energy, in a statement. “As industry veterans, joining forces with Arcadia will allow us to get better deals for customers and enhance our customer experience.  We manage 100% of the energy experience and become a customer’s independent agent and advocate so they never have to worry about their electricity bill again.”

The deal is Arcadia’s first acquisition and follows the company’s launch of a community solar program all the way across the country in the great state of Maine.

New York’s David Energy has raised $4.1 million to ‘build the Standard Oil of renewable energy’

“We intend to build the Standard Oil of renewable energy,” said James McGinniss, the co-founder and chief executive of David Energy, in a statement announcing the company’s new $19 million seed round of debt and equity funding. 

McGinniss’ company is aiming to boost renewable energy adoption and slash energy usage in the built environment by creating a service that operates on both sides of the energy marketplace.

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 an effort to reduce the energy consumption and the attendant carbon footprint of the built environment.

The company’s software, Mycor, leverages building demand data and the assets that the building has at its disposal to shift user energy consumption to the times when renewable power is most available, and cheapest. 

It’s a novel approach to an old idea of creating environmental benefits by reducing energy consumption. Using its technology, David Energy tracks both the market price of energy and the energy usage by the buildings it manages. The company sells energy to customers at a fixed price and then uses its windows into energy markets and energy demand to make money off of the difference in power pricing.

That’s why the company needed to raise $15 million in a monthly revolving credit facility from Hartree Partners. So it could pay for the power its customers have bought upfront.

Image Credit: Getty Images

There are a number of tailwinds supporting the growth of a business like David Energy right now. Given the massive amounts of money that are being earmarked for energy conservation and energy efficiency upgrades, companies like David, which promise to manage energy consumption to reduce demand, are going to be huge beneficiaries.

“Looking at the macro shift and the attention being paid to things like battery storage and micro grids we do feel like we’re launching this at the perfect time,” said McGinniss. “We’re offering [customers] market rates and then rebating the savings back to them. They’re getting the software with a market energy supply contract and they are getting the savings back. It’s is bringing that whole bundled package together really brings it all together.”

In addition to the credit facility, the company also raised $4.1 million in venture financing from investors led by Equal Ventures and including Operator Partners, Box Group, Greycroft, Sandeep Jain and Xuan Yong of RigUp, returning angel investor Kiran Bhatraju of Arcadia, and Jason Jacobs’ recently launched My Climate Journey Collective, an early-stage climate tech fund. 

“Renewable energy generators are fundamentally different in their variable, distributed, and digitally-native nature compared to their fossil fuel predecessors while customer loads like heating and driving are shifting to electricity consumption from gas. The sands of market power are shifting and incumbents are poorly-positioned to adapt to evolving customer needs, so there’s a massive opportunity for us to capitalize.” 

Founded by McGinniss, Brian Maxwell and Ahmed Salman, David Energy raised $1.5 million in pre-seed financing back in March 2020.

As the company expands, its relationship with Hartree, an energy and commodities trading desk, will become even more important. As the startup noted, Hartree is the gateway that David needs to transact with energy markets. The trader provides a balance sheet for working capital to purchase energy on behalf of David’s customers.


“Renewables are causing fundamental shifts in 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 market and have the right strategy to execute. Hartree is excited to be a commodity partner with David Energy on the launch of the new smart retail platform and is looking forward to helping make DE Supply the premier retailer in the market.”

David now has retail electricity licenses in New York, New Jersey, and Massachusetts and is looking to expand around the country.

“David energy stands to reinvent the way that hundreds of billions of dollars a year in energy are consumed,” said Equal Ventures investor Rick Zullo. “Business model creativity and finding ways to change user behavior with new models is just as important if not more important than the technology innovation itself.”

Zullo said his firm pitched David Energy on leading the round after years of looking for a commercial renewable energy startup. The core insight was finding a service that could appeal not to the new construction that already is working with top-of-the-line energy management systems, but with the millions of square feet that aren’t adopting the latest and greatest energy management systems.

“Finding something that will go and bring this to the mass market was something we had been on the hunt for really since the inception of Equal Ventures,” said Zullo.

The innovation that made David attractive was the business model. “There is a landscape of hundreds of dead companies,” Zullo said. “What they did was find a way to subsidize the service. They give away at low or no cost and move that in with line items. The partnership with Partree gives them the opportunity to be the cheapest and also the best for you and the highest margin regional energy provider in the market.”

National Grid sees machine learning as the brains behind the utility business of the future

If the portfolio of a corporate venture capital firm can be taken as a signal for the strategic priorities of their parent companies, then National Grid has high hopes for automation as the future of the utility industry.

The heavy emphasis on automation and machine learning from one of the nation’s largest privately held utilities with a customer base numbering around 20 million people is significant. And a sign of where the industry could be going.

Since its launch, National Grid’s venture firm, National Grid Partners, has invested in 16 startups that featured machine learning at the core of their pitch. Most recently, the company backed AI Dash, which uses machine learning algorithm to analyze satellite images and infer the encroachment of vegetation on National Grid power lines to avoid outages.

Another recent investment, Aperio uses data from sensors monitoring critical infrastructure to predice loss of data quality from degradation or cyberattacks.

Indeed, of the $175 million in investments the firm has made roughly $135 million has been committed to companies leveraging machine learning for their services.

“AI will be critical for the energy industry to achieve aggressive decarbonization and decentralization goals,” Lisa Lambert, the chief technology and innovation officer at National Grid and the founder and president of National Grid Partners.

National Grid started the year off slowly because of the COVID-19 epidemic, but the pace of its investments picked up and the company is on track to hit its investment targets for the year, Lambert said.

Modernization is critical for an industry that still mostly runs on spreadsheets and collective knowledge that’s locked in an aging employee base, with no contingency plans in the event of retirement, Lambert said. It’s that situation that’s compelling National Grid and other utilities to automate more of their business.

“Most companies in the utility sector are trying to automate now for efficiency reasons and cost reasons. Today, most companies have everything written down in manuals; as an industry, we basically still run our networks off spreadsheets, and the skills and experience of the people who run the networks. So we’ve got serious issues if those people retire. Automating [and] digitizing is top of mind for all the utilities we’ve talked to in the Next Grid Alliance.

To date, a lot of the automation work that’s been done has been around basic automation of business processes. But there are new capabilities on the horizon that will push the automation of different activities up the value chain, Lambert said.

“ ML is the next level — predictive maintenance of your assets, delivering for the customer. Uniphore, for example: you’re learning from every interaction you have with your customer, incorporating that into the algorithm, and the next time you meet a customer, you’re going to do better. So that’s the next generation,” Lambert said. “Once everything is digital, you’re learning from those engagements – whether engaging an asset or a human being.”

Lambert sees another source of demand for new machine learning tech in the need for utilities to rapidly decarbonize. The move away from fossil fuels will necessitate entirely new ways of operating and managing a power grid. One where humans are less likely to be in the loop.

“In the next five years, utilities have to get automation and analytics right if they’re going to have any chance at a net-zero world – you’re going to need to run those assets differently,” said Lambert. “Windmills and solar panels are not [part of] traditional distribution networks. A lot of traditional engineers probably don’t think about the need to innovate, because they’re building out the engineering technology that was relevant when assets were built decades ago – whereas all these renewable assets have been built in the era of OT/IT.”