Beacon Power Services raises $2.7M to improve electricity access for sub-Saharan African cities

Sub-Saharan Africa’s share of the global population without access to electricity stood at 77% in 2020, according to reports. Also, the average daily electricity supply in some of Africa’s largest cities is less than 12 hours. As a result, individuals and businesses find other options and substitutes, such as generators, to deal with their power issues; however, these solutions can either be costly to use or affect the climate.

While solar grids and panels are another viable option and have compelling use cases for end consumers, there’s still an opportunity to launch products targeted at power distribution companies, and that’s where Beacon Power Services (BPS) plays. The energy tech company, which provides data and grid management solutions to help Africa’s power sector distribute electricity more efficiently, is announcing today that it has closed a seed round of $2.7 million.

Founder and chief executive officer Bimbola Adisa, an aerospace engineer, started the company in 2014 after working several years for a power turbine manufacturer and as an investment banker covering the power sector in the U.S. For the latter, most of his clients included electric utilities, service providers and manufacturers. In an interview with TechCrunch, he said these experiences gave him exposure to the application of technology in the power sector, and he saw an opportunity to apply that in Nigeria and across Africa.

Adisa launched BPS in 2014 to address the inadequate electricity supply from power distribution companies. The U.S.- and Nigeria-based utility company provides energy management software and analytics for utilities. Its AI-enabled grid management platform, Adora, solves one of two fundamental problems power distribution companies face in Africa.

The software offers real-time visibility on network performance for electric utilities and connects to every utility asset and customer node on the grid, allowing energy providers to preempt outages and identify network losses, respond to them quickly and distribute electricity more efficiently. “The result is that utilities can operate more efficiently, recover more revenue, and by reducing outages, customers get increased supply of electricity (more hours supplied daily), so everyone wins,” said BFS in an emailed response to TechCrunch on how Adora works.

The other problem is data-focused, tackled by the company’s proprietary platform called Customer and Asset Information Management system (CAIMs). Utilities in Africa struggle to maintain an accurate database of their customers, assets and grid topology (the relationship between assets and customers). The CAIMs solves this by factoring in the unique conditions within which Africa’s utilities operate, for example, poor address systems, and helps them digitize their data, which serves as a foundation for network improvements.

“Africa is home to the fastest growing cities in the world, but when most people think of energy access in Africa, they think of the rural areas with little or no access to electricity at all. However, it is impossible for Africa to develop without significantly improving electricity access and reliability across its major cities,” said CEO Adisa in a statement. “When we realized that solutions designed for mature markets fail to address the unique infrastructure challenges Africa faces, we developed a tailored solution for power companies on the continent to improve daily grid supply of electricity.”

Bim Adisa (CEO)

Adisa told TechCrunch that BPS has grown from a single utility in Nigeria to four utilities in two countries, including Ghana, covering more than 8 million customers (residential and businesses). BPS’ business model entails working with its clients as partners over the long term, and not just to sell products, said Adisa. As such, the company can defer most of the upfront cost of deploying its technology in exchange for service-based payments commensurate with the value it creates.

The eight-year-old energy utility company says it differs from other platforms because it provides “local solutions that factor in the local operating environment in Africa.” For instance, most off-the-shelf solutions created for mature markets do not factor in the frequency of outages encountered in Africa or the network communications issues experienced, but BPS claims its solutions have solved that.

The company’s seed round was led by Seedstars Africa Ventures with participation from Persistent Energy, Kepple Africa Ventures, Factor[e] and Oridun Capital Management. Speaking on the investment, Maxime Bouan, managing partner at Seedstars Africa Ventures, said, “As a society, we have recognized climate change as one of the biggest threats to our generation, and it is critical we use smart capital to support entrepreneurs across Africa who are creating innovative and localized solutions to tackle this challenge.”

The new funding would enable BPS to improve its current products (product upgrades to add new features and incorporate automation) and expand into new markets beyond Nigeria and Ghana, where it currently operates.

Shield AI raises $165M at a $2.3B valuation to fuel development of its military autonomous flying systems

Technology built with defense in mind is getting some significant and serious traction at the moment, spurred by world events, advances in technology, and a growing appetite from end users to invest in more innovative ways to protect themselves. In the latest development, Shield AI — which makes software and hardware for drones and other autonomous aircraft used by military and other government organizations — has raised $165 million in funding, $90 million in Series E equity and $75 million in debt.

The funding is coming in at a $2.3 billion valuation, Shield AI said. The company has been on a strong pace on that front: it follows on from a $210-$300 million Series D about ten months ago that valued the company at $1.25 billion. (It never confirmed the final amount, which was also a mix of equity and debt.)

Doug Philippone at Snowpoint Ventures led the round, with Riot Ventures, Disruptive (a returning backer; it led Shield AI’s Series D) and Homebrew (it led Shield AI’s seed round). The company’s other investors include Point72, Andreessen Horowitz, Breyer Capital, and SVB Capital.

Philippone is an interesting person to lead on this latest round: in addition to being an investor, he is also Palantir’s global defense lead, a job he’s been in for the last 14 years. This is important not least because Palantir arguably was one of the key companies to change the game for how startups, spurred by the tech boom out of Silicon Valley, both engaged and started to win defense contracts and raised huge sums from VCs to fuel that growth.

Another influential startup changing the conversation around funding defense tech is Anduril, which as we reported just the other week, is raising up to $1.2 billion (potentially more) at a $7 billion valuation. That round, we have heard, is basically now closed.

Shield AI is based out of San Diego, which you could say is a little like the Silicon Valley of the defense industry. It’s the home port of the U.S. Pacific fleet, and according to stats gathered by the city’s chamber of commerce, outside of Fairfax County, Virginia (where the Pentagon is based) greater San Diego gets more defense spending than any other place in the U.S. Shield is based there among a dozens of other major and smaller defense contractors.

And if you don’t follow the defense industry, but have at least seen or heard of Top Gun or its recently-released blockbuster sequel, you’ll know that it’s a major center specifically for aerospace development. Shield AI targets a very specific customer base that is focused around the U.S. military and its allies, but even so it speaks about what it does in terms that bring is purpose and function into context for more ordinary people.

“China’s military is Netflix; the U.S. military is Blockbuster. China is Amazon; the U.S. is Barnes & Noble. China is Tesla; the U.S. is General Motors,” writes Brandon Tseng, the president of the company who co-founded it with his brother Ryan (who is the CEO). Brandon is also a former Navy SEAL so he speaks with some authority in making these sorts of analogies.

And on the company’s home page, it describes Hivemind, its AI-based autonomous software platform, as what else? “A Top Gun for every aircraft.”

As with a lot of other companies (maybe every company) in autonomous transportation, be it in the air or on the ground, Shield AI has a mix of software and hardware that is already usable, and then products that are still in development. Some will be used in purely autonomous systems, and some in tandem with humans.

In the case of Shield AI, the company says that Hivemind and its Nova drone (or small-unmanned aircraft system, sUAS, in more formal terminology) have been in use since 2018. Ryan Tseng tells us that the specifics of exactly where and how are classified, as are most of the companies other activities, but they are part of the U.S. Department of Defense Program of Record.

It’s also working on a vertical take-off and landing (VTOL) aircraft called V-BAT that will be soon equipped with Hivemind. The software is being integrated into other aircraft, too, such as the F-16 fighter jet pictured above, where it will act as a co-pilot alongside a human, with the aim for it to be used also across F-22s, F-18s, and other models. In the meantime, Tseng said in an interview that its V-BAT craft also have been operational since 2018 around the globe.

“The DoD and international militaries are acquiring V-BAT at a rapid rate so we’re ramping production as quickly as possible,” he said — one reason for this funding. V-BAT beat out 13 competitors to win a major Navy Program of Record, he added. Its selling point is its ability to withstand challenging conditions. “The unique design and controls allow it to take off & land in high winds, on crowded flight decks, aboard moving vessels with landing zones as small as 12’ x 12’.”

The bigger strategy is to build a “swarming” capability for its devices — essentially to use a number of them in concert as a way of evading jamming technologies from adversaries. This, Tseng said, is on track for coming to market by the end of 2023 (although since a lot of what they do is classified, they may not actually make anything public until it’s already being used).

Taking both Anduril’s recent landmark round and this latest round for Shield AI, we’re in a moment right now where VCs — working themselves in a challenging financial climate — have changed their tune when it comes to backing companies in the defense space, which includes not just companies like these building military technology, but also those working in cybersecurity and other kinds of technology that helps with resilience. This could include, interestingly, alternative energy tech and of course products that can be used by more than just governments but enterprises as well.

“The fundraising climate has never been more favorable for defense technology companies,” Tseng told TechCrunch. “Supporting defense was taboo in many circles. We were rejected by many early investors because defense was considered too controversial. Today, there is growing recognition that investment in defense contributes to security, stability, and peace, all of which are foundational to a flourishing society.”

As noted by others who are investing in this space right now, or building for it, there has indeed been a noticeable shift in how people view companies like Shield AI and what they are trying to develop. That is still a challenge, though, which might be one reason why a company like Shield goes through the work of putting out messaging to people who may never actually be customers to still take in what they are trying to do.

“Many people don’t realize the scope of conflict in the world – before Ukraine, 84 million people were displaced by violence and persecution, up from 39 million in 2011,” Tseng said. “There aren’t that many opportunities to contribute to technologies that meaningfully address humanity’s great challenges – or that create the general conditions for human achievement. When you work on AI pilots for defense – you are working on the most important and disruptive defense technology of the next thirty years – and are empowering our country and allies to advance security, stability, and peace.”

That is filliped also by the fact that adversaries are also hot on the heels building their own similar systems. China is aiming for military parity by 2027 in the Pacific, Tseng pointed out, meaning they aim to exceed the U.S. by 2028. And he added that there have been reports that it is already benchmarking their prototypes against Shield AI’s pilot.

Tseng also may be biased but has a very different idea of why autonomous matters more in this context. “Waymo engineers get to build minivans that plod through the suburbs at 25 mph, we get to work autonomous fighter jets that fly 1000+ mph, dodge missiles, and find threats,” he said.

All this is spelling not just an opportunity in the business sense, but a wider one, too, for those backing Shield AI.

“Investors are flocking to quality. This round is a reflection of Shield AI’s success in creating great products, building a business with strong fundamentals, and dominant technological leadership – with an AI pilot proven to be the world’s best in numerous military evaluations,” said Philippone in a statement. “We love that they are leveraging an AI and software backbone across a variety of aircraft to deliver truly game-changing value to our warfighters. The work they are doing today is just the tip of the iceberg.”

Energize Ventures raises $330M to fund energy, mobility and climate resiliency technology

Energize Ventures, an early and growth-stage venture fund, has announced the closing of its second fund with total capital commitments of $330 million. Fund II will be used to help scale and commercialize software across renewable energy, mobility, cybersecurity, battery storage, critical infrastructure and climate resiliency.

The fund, which is worth exactly double what Energize raised for its first fund, is backed by anchor investors such as Invenergy, CDPQ, SE Ventures, GE Renewable Energy and Hannon Armstrong. Credit Suisse, Xcel Energy, American Electric Power and Equinor Ventures also participated.

“Since we first launched Energize five years ago, we have seen the energy and industrial sectors undergo a massive digital transformation,” said John Tough, managing partner of Energize Ventures, in a statement. “The transition towards a more renewable and sustainable future is outpacing all expectations, and market participants are digitizing operations to address this new, emerging scale.”

To date, Energize has deployed capital from Fund II into three investments, including Munich-based predictive battery analytics software TWAICE, Columbus, Ohio-based IoT device company Finite State and New York-based critical infrastructure cybersecurity company Urbint, according to the firm.

Fund II is targeting 15 or more early-stage digital-first startups that are raising Series A, B or C rounds in the energy and sustainable industry sectors. Typically, Energize Ventures invests around $10 million to $20 million and prefers to lead the round.

The firm’s first round invested in 14 software-based companies, including the now-public EV charging solution Volta, cloud manufacturing startup Fast Radius and solar software company Aurora Solar.

“Energize exclusively invests in digital solutions,” a spokesperson for the company told TechCrunch. “That means no hardware, no moonshots that require untold amounts of capex to get off the ground – just technologies at the software layer at commercialization. Part of that comes from the firm’s investment strategy; the team leans on its LPs (including well-known corporates such as GE and Schneider) to identify the challenges facing the sectors today, and then finds solutions that overcome those barriers to decarbonization.”