In this Research Note, we examine what’s behind the move by Veritone to divest their energy unit as well as assessing GridBeyond’s focus and strategic rationale for acquiring the business. This analysis is based on Veritone’s 2022 10K Report, investor presentations and GridBeyond’s media coverage over recent years.
Headquartered in Denver, Colorado, Veritone, Inc. is a provider of AI solutions, powered by their proprietary AI operating system, aiWARE, to deliver differentiated products and solutions to Commercial Enterprise and Government & Regulated Industries customers. The company reported 2022 revenue of $149.7 million with a reported net loss of $25.6 million.
The divestment of Veritone Energy is part of the company’s efforts to accelerate their pathway toward long-term profitability.
During the second half of 2020, Veritone launched their energy solutions business as part of their Government & Regulated Industries solutions to help customers increase profitability and improve grid reliability as they make the transition to renewables. Veritone Energy’s AI-powered software offers proprietary, real-time energy forecasting, optimization, and control—all of which unlock the potential of Distributed Energy Resources (DERs) while enhancing reliability.
While they believe their energy solutions have significant long-term value, their aiWARE platform is in the early stages of deployment in this market, and given the current macroeconomic environment, coupled with the fact that they will need to continue making significant investments in product, sales and engineering to further develop current and future solutions, Veritone elected to divest their energy group in the first half of 2023.
On 10 July, GridBeyond announced the acquisition of Veritone Inc’s Energy business. Commercially trading since 2010, formerly known as Endeco Technologies, GridBeyond is a Dublin, Ireland-based firm monetizing and optimising energy flexibility both behind and in front of the meter for industrial and commercial customers as well as renewable players and asset owners.
GridBeyond said the acquisition of Veritone Energy will allow it to offer more functionality to its customers through a new design platform led by its data science team. The “extremely accurate” forecasting technology developed by Veritone will help the Irish start-up’s customers to generate revenues and support them on their transition to net-zero emissions.
“By combining the capabilities of both organizations, we offer customers a comprehensive suite of energy management and energy trading solutions that leverage the power of AI and machine learning. The acquisition will also enable GridBeyond to expand its reach in North America and strengthen its position as a global leader in optimisation and management of distributed energy assets.” said GridBeyond CEO Michael Phelan.
Point, GridBeyond’s AI-powered energy automated technology platform connects generation, load and battery storage assets maximizing revenues in energy markets. It enables Commercial and Industrial (C&I) businesses to sell and purchase energy in wholesale markets, generating cost savings through peak avoidance and new revenues by taking advantage of electricity price volatility. It also enables participation in grid balancing and ancillary services.
Since their launch, they have deployed their technology platform for managing distributed and flexible energy resources at over 500 C&I sites amounting to over 1500 MW’s worldwide, in Japan, Australia, Canada, the US, UK and Ireland.
Total disclosed venture capital and financing for this late-stage company amounts to $32.6 million. In announcing a €6 million debt financing round led by Claret Capital in October 2022, GridBeyond reported:
The company has grown revenue by an average 75% per annum over the last two years and is expecting a further 85% revenue growth in 2023.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.