According to the U.S. Energy Information Agency, the country spends about $1.2 trillion annually for energy. Given the magnitude of that money involved, even moderate cuts can pay off. But that requires data.
“Having good data key is the key to good decision making,” says Sanjoy Malik, founder and CEO of Urjanet, Inc., one of the local companies helping others control their energy costs. “You can’t manage what you can’t measure.”
Over the last few years, energy efficiency firms large and small have made Atlanta their home. GE moved its Smart Grid Center of Excellence to Cobb County in 2010 and this spring Cisco Systems, Inc. purchased Atlanta-based JouleX, a company that provides energy management for data centers and networks, for $107 million.
“We believe that Atlanta is becoming a hub of smart grid tech,” says Brian Crow, CEO of Verdeeco Inc. “It is a great community for getting a business off the ground, the cost of business is lower than other parts of the country and we have great access to all the talent at Georgia Tech.”
Here are three firms in the local emerging smart grid sector.
Verdeeco Inc. is a smart grid analytics company that looks at the energy management problem from the utility’s perspective. Founded in 2009, the firm’s software is now being used by seven utilities, primarily in the Southeast.
“Verdeeco was formed to help utilities better manage the massive amount of data that is coming in from the field,” says Verdeeco’s CEO Crow, an 18-year veteran in the utility field. “We built out a platform that helps utilities manage the data and ensure it is reliable data, provide access to everyone in the utility and an analytics solutions set on top of the platform to provide specific analytic applications to the utilities.”
The company raised $800,000 in funding from the Atlanta Technology Angels and the Auburn Angel Network. Verdeeco takes data from customer utility meters, devices on the electrical grid, weather information and other sources, and presents the data in a way that helps utilities make informed decisions. Verdeeco can send the information to the utility’s data center or the utility can access the data though the cloud. Either way, it takes little or no IT resources on the customer end.
“Traditionally, utilities lack the in-house expertise to manage a very large and changing data infrastructure,” says Crow. “It is difficult for them to hire the right, experienced candidates, and they would never be able to achieve the economies of scale that we can provide by developing a solution for the entire industry.”
The company is currently working on growing its network of resellers nationwide has plans to raise an institutional round of funding.
“This will help us to really grow our business, with the primary focus on increasing our sales and marketing efforts and expanding our R&D effort,” he says.
Skye Energy, LLC
John Bracey has a background in both software development and in energy efficiency in buildings. Last year he put the two together when he founded Skye Energy, a firm that provides software to help building owners turn their energy audits into actual savings. The main problem with energy audits is that the building owner is provided a list of recommendations on cutting energy usage, but no clear set of actions to put those changes in place. The owner then has to figure out whether he can do it, evaluate the different products that are on the market, determine the costs and then calculate whether it is worthwhile to take those actions. Not surprisingly, many of those steps are never completed.
Skye Energy’s goal is to bridge the gap between the audit and the implementation by bringing together building owners and vendors.
“When an audit is done in our system, all that data can be shared with the marketplace of vendors and service providers and product representatives,” says Bracey. “They can do that investigative work for the building owner, flesh out the opportunities and then bring the solution to the building owner.”
Bracey got his company off the ground last year with a few hundred thousand dollars from friends and family and is using the current revenue stream to finance company expansion. One of his current projects is working with the Atlanta Better Buildings Challenge which has a target to achieve a 20% reduction in energy usage by 2020.
Most of his clients are currently in Georgia but he is reworking his software platform, based on the experience with the Atlanta BBC, before taking the product national. Being based in Atlanta gives the company a certain disadvantage that Bracey says will become a significant advantage when the company broadens its reach to the rest of the country. Georgia has low energy rates coupled with less regulation compared with some other geographies that have high utility rates coupled with state regulations that make it easy to achieve energy cost savings.
“We have to make sense economically for the owners, in addition to any environmental benefits,” he says. “If we can save money here where utility costs are low, we can do it where costs are higher.”
While Skye Energy wants its software to be useful for even smaller building owners, Urjanet, Inc. goes after those with the largest energy bills – $25 million a year on up.
“Energy spending is a big balance sheet item for these companies,” says Urjanet founder and CEO Sanjoy Malik. “We can provide them with data from all their locations so they have a good idea on what they are spending, and also help them measure their carbon footprint.”
Urjanet customer Cox Enterprises, Inc., for example, spends $100 million annually on electricity and natural gas, and had 30,000 different accounts coming from 190 utilities. After in-house efforts had failed to bring this under control, Urjanet set up a data feed for Cox that allows them to track energy usage and costs at all their locations, forecast usage and pay all their utility bills. Cox Enterprises’ Director of Procurement, Robert Fairey, estimated that having the data would allow the company to cut its energy costs by 10-15% in certain markets.
Last fall Urjanet raised $4 million in Series B funding led by Grotech Ventures and has also received funding from the GRA Venture Fund, LLC and Imlay Investments Inc. The company is working on rolling out some new products that provide greater intelligence, including weather information for each of the locations so they can factor in climate when comparing energy usage.
These three firms are off to a good start and there are more on the way. Given the financial and environmental benefits of controlling energy usage, now is a great time to look at bringing your bright idea to market. Who knows, that idea could soon be worth $100 million, just like Tom Noonan and JouleX’s idea for turning off PCs at night.
Editor’s Note: Company applications for the 2013 Venture Atlanta conference is now open. Companies can apply here.
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