Our Investment in LevelTen Energy
Helping businesses achieve their renewable energy goals
For the world to achieve net zero emissions by 2050, BloombergNEF has estimated that 1,400 gigawatts of renewable energy will need to be deployed annually for the next thirty years. This growth will require trillions in investments to finance a drastic expansion of renewable energy infrastructure. One major impediment to more capital flowing to developers of renewable projects, such as solar or wind farms, is the opacity surrounding the projects such as the ultimate value of electricity generated and how that value compares to other projects in the market. This information asymmetry has historically limited potential demand for investments in renewable energy projects and made it difficult for projects to access financing and get off the ground.
Seattle-based LevelTen Energy is creating transparency between renewable project developers and the organizations seeking to buy clean power or invest in renewable projects. LevelTen created a digital platform and marketplace that enables businesses and their energy advisors to browse and secure renewable energy contracts with the ease, transparency, and efficiency akin to the experience of shopping for homes on Zillow. The company also recently expanded its Platform to enable renewable energy project developers and owners to quickly buy and sell the projects themselves. We’re thrilled to announce our investment in LevelTen, whose founder and CEO Bryce Smith we had the pleasure of speaking with on the MCJ Podcast back in 2020. We’re excited and inspired by Bryce’s vision for LevelTen, which is to position the company at the center of every transaction within the growing renewable energy market.
What is LevelTen?
LevelTen Energy builds renewable transaction infrastructure: the software, marketplaces and analytics that connect renewable energy buyers, advisors, sellers and financiers, and enable them to get deals done efficiently. The LevelTen Platform includes a renewable energy marketplace in which businesses can browse for and secure contracts that provide them with access to clean energy. The contracts, known as “power purchase agreements” (PPAs), serve as a commitment by a business or utility to buy electricity from a renewable energy project for a set rate over a predetermined time horizon, which can range from 10 to 25 years. For developers of solar and wind farms — and in some cases small-scale hydroelectric, geothermal, and biomass — PPAs represent a contractually guaranteed revenue stream which strengthens a project’s ability to secure financing before it is able to sell its electricity to the wholesale market.
The LevelTen Energy Marketplace enables organizations to compare PPA offers from renewable energy projects throughout North America and Europe.
LevelTen has partnered with more than 25 energy advisors and retail electricity providers, who use the platform to source renewable energy on behalf of their clients. Clients range from small-to-medium sized businesses to municipalities and large corporations that are motivated by their respective sustainability goals to source clean energy. LevelTen not only provides visibility into the market of renewable energy contracts in North America and Europe, but also provides buyers and advisors with tools and data to make informed decisions.
In 2021, the company expanded its Platform to include the LevelTen Asset Marketplace, which enables project owners, developers and investors to quickly buy and sell the projects themselves. Wind and solar projects often flip owners multiple times before they become operational; this new marketplace brings greater transparency to the process and accelerates deals.
Why Did We Invest?
Unifying a Fragmented Market
The renewable energy PPA market consists of a variety of project developers seeking buyers of their electricity. This includes everything from large developers to small firms and property owners, to name just a few. Prospective clean energy buyers have traditionally relied on third party brokers to identify potential PPAs, but without access to the LevelTen Platform, those brokers’ market expertise was limited. As we learned about this fragmented market, we quickly concluded that LevelTen, already the world’s largest PPA marketplace, was positioned to drive efficiencies across the growing renewable energy landscape and accelerate its scale.
A Growing Roster of Corporate Buyers
Though LevelTen originally focused on directly serving small-to-medium sized businesses, it recently partnered with established energy advisors, who represent a variety of corporations and institutions, from Fortune 500 companies to universities and hospital systems. This growing list of organizations are using LevelTen to source renewable energy to meet their sustainability and climate goals.
A sample of some of the corporations using LevelTen today.
Google, a marquee partner and investor, participated in the Series C round as part of its goal of supporting innovative solutions that help enable businesses of all sizes, including Google Cloud customers, to source 24/7 carbon-free energy.
MCJ Collective shares this view that LevelTen is well-positioned to not only make renewable energy procurement easier and more efficient, but also scale the transaction volume of clean energy sales. By fulfilling its potential, the company is helping to advance the urgent transition to a clean energy future.
WSJ: “Renewable-Energy Broker LevelTen Gets Google, Oil-Sector Backing” (PDF)
LevelTen Blog: “LevelTen Energy Raises $35 Million in Series C Funding from NGP ETP, Energy Majors, VCs and Google to Accelerate the Energy Transition”
MCJ Podcast Interview with CEO Bryce Smith (September, 2020)
If you are an accredited investor, and want to learn more about being an investor in our fund (to back more great companies like this one!), reach out here.