Energy

The Distributed Energy Management Startup Landscape

Building Energy Management is a broad category encompassing energy management software and hardware, energy efficiency services and sustainability and carbon management solutions for buildings. It also includes the technologies involved in creating grid-interactive buildings, such as demand response, virtual power plants, distributed energy management and behind-the-meter energy storage solutions. Within that space, a software category called Distributed Energy Resource Management Systems (DERMS) has emerged to regulate multiple buildings in different geographies at the same time, in order to manage energy consumption and efficiency with the grid. DERMS are used to organize the operation of the aggregated DER within a power grid by balancing against Behind-The-Meter (BTM) Distributed Energy Resources in buildings. This places DERMS at the center of an exciting space co-occupied by virtual power plants (VPPs) and microgrids, where DERMS are becoming the enabling factor for rapid growth in the market. This emergence has attracted the attention of investors and in this research note, […]

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Building Energy Management is a broad category encompassing energy management software and hardware, energy efficiency services and sustainability and carbon management solutions for buildings. It also includes the technologies involved in creating grid-interactive buildings, such as demand response, virtual power plants, distributed energy management and behind-the-meter energy storage solutions.

Within that space, a software category called Distributed Energy Resource Management Systems (DERMS) has emerged to regulate multiple buildings in different geographies at the same time, in order to manage energy consumption and efficiency with the grid. DERMS are used to organize the operation of the aggregated DER within a power grid by balancing against Behind-The-Meter (BTM) Distributed Energy Resources in buildings.

This places DERMS at the center of an exciting space co-occupied by virtual power plants (VPPs) and microgrids, where DERMS are becoming the enabling factor for rapid growth in the market.

This emergence has attracted the attention of investors and in this research note, we track funding in the space from the past year, utilizing the extensive data in our 2023 StartUps in Smart Buildings and Smart Building StartUp Landscape reports.

Distributed Energy Management DERMS

Distributed Energy Management Activity in 2023 so Far

On June 14th 2023, residential-focused DERMS play Axle raised $1.6M in pre-seed funding led by Picus Capital. Founded in early 2023, the UK-based startup offers a home energy flexibility platform that connects EVs and other devices to energy markets, alongside APIs that enable energy suppliers and hardware manufacturers to monetize the flexibility of home energy devices.

On May 18th 2023, Canadian energy optimization software provider Peak Power raised $35 million in a round led by Greenbacker Capital Management. Peak Power develops software to optimally operate battery assets to provide energy services to the grid, and the recent financing will accelerate its expansion across key US states including New York, Massachusetts, Virginia, and California.

On April 12th 2023, Los Angeles based Haven Energy raised $4.2M in a seed funding round led by Lerer Hippeau and Giant Ventures. Haven guides homeowners through the selection, quotation and financing phases for home battery systems, matching them with installers, helping them develop virtual power plant models. The company intends to use the funds to expand throughout California and additional US markets.

On March 30th 2023, Logical Buildings secured $110M in funding for a virtual power plant (VPP) project facility with Keyframe Capital. The funding will be used to pursue VPP projects within New York and New Jersey-based multifamily residential buildings, and using a unique funding channel the investment will be repaid through energy savings and grid revenue.

On March 6th 2023, Hawaii-based Shifted Energy closed a $4.3 million seed funding round co-led by EPIC Ventures and Kapor Capital. Shifted Energy's software creates virtual power plants out of single and multi-family buildings by connecting electrical appliances such as water heaters and EV chargers to a cloud-based platform. The funds will be used for talent acquisition and expanding coverage areas throughout the US, Canada, and Australia.

On February 21st 2023, UK-based Powervault announced that it had closed a scale-up equity investment round of £3.8 million ($4.69 million) from new and existing investors, including Green Angel Syndicate. The company uses behind-the-meter smartSTOR software and AI batteries to intelligently learn consumption behavior and manage storage. The investment will help Powervault scale up their manufacturing capabilities in London.

On February 14th 2023, BluWave-ai secured a $9.5M Series A funding round led by the strategic investment and minority stake taken by PowerON Energy Solutions, a subsidiary of Ontario Power Generation. The resources from this round will be deployed to build on the company's Grid Optimization solution with a focus on EV charging infrastructure. This Series A follows a $3.9 million seed funding round in March 2020.

And, on January 23rd 2023, Slovakia-based Fuergy raised €16 million in funding from leading Bratislava real estate investor Pro Partners Holding. Fuergy's ‘brAIn’ energy storage and management system uses AI to gauge real electricity demand to adjust energy management intelligently. The investment is intended to support Fuergy expansion across Slovakia, the EU, and beyond.

Distributed Energy Management Activity in Q3+4 2022

On November 22nd 2022, California-based Swell Energy raised $120 million in a Series B led by SoftBank Vision Fund and Greenbacker Development Opportunities Fund. Investment will support the development of 600 MWh of VPPs through the deployment and aggregation of 26,000 energy storage systems across the US. This follows the $450 million in project financing Swell received from Ares Management and Aligned Climate Capital in December 2020.

On November 2nd 2022, Norway-based Enode raised $15M in a Series A round led by fellow Scandinavians, Creandum. Enode builds the digital infrastructure that makes distributed energy resources interoperable and the funds will be used to develop products and expand into the EU and US. The Series A follows a $2.2 million seed funding round led by Lowercarbon Capital in July 2021.

On October 10th 2022, Ireland-based GridBeyond raised €6 million in debt financing led by Claret Capital. The Distributed Energy Management platform provider aimed to use the funds to support its expansion plans and bolster its team, and part of that plan was realized a few months ago when GridBeyond acquired California-based energy forecasting and optimisation provider Veritone Energy on July 21st 2023.

And, on August 24th 2022, Lunar Energy came out of stealth to reveal it had closed $300 million of investment over two rounds in the past two years as it worked quietly behind the scenes. Led by former Tesla Energy executive, Kunal Girotra, Lunar was founded in August 2020. The funds have been used for talent and the Moixa acquisition, as well as product and manufacturing development in order to bring Lunar's first product to market later this year.

The list of funding in the DERMS space goes on... demonstrating a strong appetite for this technology space that seeks to balance energy supply, demand, and storage. While this market will be somewhat limited by the concurrent development of smart grids, buildings, and homes, we are seeing both innovative solutions and strong development taking place on all sides. The age of intelligently distributed energy management is emerging.

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