Our Investment in David Energy
Pioneering "Software as an Energy Service"
A key trend we have observed in this second wave of clean technology, or what’s been called “climate tech,” is the leading role of software. While technologies in materials science and related fields (often dubbed “tough tech”) play an essential role in decarbonization, companies that focus on bits moving atoms can also drive impact toward climate change by applying intelligence and network effects at scale. Exemplifying this trend, David Energy is enabling commercial properties to optimize for clean electricity consumption and save money through its distributed energy management platform. Excited by the team and their vision for addressing a major contributor to climate change, we’re proud to announce our investment in David Energy.
The David Energy team.
Our investment in David Energy’s $4.1MM Seed round was led by Equal Ventures with participation from an all-star roster of investors: Operator Partners, Box Group, Greycroft, Sandeep Jain and Xuan Yong of RigUp, and existing angel investor Kiran Bhatraju of Arcadia. In addition, David Energy is announcing that it has secured a $15MM working capital facility from Hartree Partners, a global merchant commodities firm specializing in energy and related industries.
What is David Energy?
Founded in NYC by James McGinniss (CEO), Ahman Salman (CTO), and Brian Maxwell, David Energy was created with the vision that a new type of energy provider was needed. The team saw the existing energy grid, one comprised of power plants that are centralized, large, analog, and fossil fuel-dependent, and imagined one that is decentralized, small, digital, and powered by clean energy. To this end, the company has built a software platform, “Mycor,” that connects with a building’s Distributed Energy Resources (DERs) (e.g. smart thermostats, HVAC systems, EV charging, rooftop solar, battery storage, etc.) to optimize for energy efficiency and cost. Because it knows the real-time electricity needs of a commercial building, the company is able to source the cheapest and cleanest energy from wholesalers. James, David Energy’s CEO, shared the vision behind the company in a Startup Series episode this past summer.
James McGinniss, CEO of David Energy, speaks with Jason on an episode of MCJ’s Startup Series.
Why Did We Invest?
James, Ahman, and Brian have rich collective experience in grid design, energy management, and building operations. Having studied physics and math at Georgetown University and pursued graduate studies in mechanical engineering at UT Austin, James has extensive expertise in designing and deploying rooftop solar and residential behind-the-meter storage. During his time as a graduate student, he researched next generation grid infrastructure. He also led a 30+ team of engineers as part of the SpaceX Hyperloop Pod Competition, ultimately winning the SpaceX Innovation Award for his team’s prototype. Witnessing the energy grid becoming more digital and decentralized, James left his PhD program and decided to found David Energy to capitalize on this emerging trend. The founding team has impressively homed in on a compelling value proposition and vision, acquired commercial buildings as customers, and raised pre-seed financing from a number of investors we respect (e.g. Box Group, Greycroft, etc.).
The Fragmentation of Data and Energy
With electricity needs that vary across its many discrete systems, a commercial building typically deals with multiple demand management software providers (e.g. a retail energy provider and a demand response provider). Lacking a consolidated solution, properties miss out on hundreds of thousands of dollars per year in value. In addition, a building’s DERs are typically siloed by each digital asset's own management system, making it difficult to leverage energy-consumption data or adjust the building’s energy needs accordingly. David Energy’s Mycor platform unifies the disparate sources of data from the various DERs, enabling the property owners to monitor and manage each asset effectively. Consolidating the data and demand management, David Energy acts as the sole electricity provider for the property and is able to save it money by purchasing electricity intelligently.
Solving The Built Environment’s Impact on Climate
According to the EPA, commercial & residential buildings represent 12% of total GHG emissions in the U.S.; globally, the carbon footprint of this category is even greater, representing 40% of total annual emissions. Much of the carbon output stems from direct activities (e.g. oil and gas burning, waste management, refrigerant leaks, etc.) as well as indirect activities, largely consisting of fossil fuel-based power plants. David Energy is mitigating the impact of the built environment in two-fold ways: by driving energy efficiency through software intelligence and increasing the consumptive mix of renewables (e.g. solar, wind, etc.). The confluence and scale of these benefits positions David Energy to both address a major contributor to climate change as well as upend traditional retail energy providers in a cleaner and more sustainable way.
Disrupting Traditional Retail Energy
There exists several intermediaries in the value chain that extends from the power plant to the property. David Energy offers a compelling reason that it can displace those entities as a result of the durable advantage it derives as an “energy operating system.” Supplanting REPs is just a start. With the continued adoption of on-premise energy generation, such as rooftop solar, commercial buildings are becoming power plants in their own right. As this trend decentralizes electricity generation, David Energy will be well-positioned not only to provide energy from large plants to properties, but also sell electricity back to the grid. Because of the scalable network effects the company can bring to bear, we are confident the team is poised to reinvent how electricity is being provided.
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