A next-gen renewables middleman nets $3M
RenewaFi, a New York-based climate tech startup that lets companies buy and sell renewable energy, raised $3 million in seed funding, the company tells Axios exclusively.
Why it matters: Now that renewable energy can be generated efficiently, investors see it as time to rethink the way companies buy and sell it.
The details: First Round Capital, Floating Point, BoxGroup and Powerhouse Ventures participated in the funding round along with angel investors Arcadia CEO Kiran Bhatraju and Apollo partner Corinne Still.
- Yaffe declined to disclose the valuation of the round. None of the investors will have board seats, he confirmed.
State of play: Buying and selling renewable energy is a time and capital-intensive process, RenewaFi CEO Noam Yaffe tells Axios.
- Prior to starting RenewaFi, he worked on the sell-side for a power plant developer in Austin and Power Purchase Agreements would take months to close and would often delay construction on new plants.
- PPA fees, paid to the entity executing the contract, could run upwards of $2 million for a months-long process in addition to the contract cost itself.
How it works: RenewaFi took a page from fintech's playbook and moved the market for renewables online.
- Instead of paying fees and working with outside firms to secure a PPA, RenewaFi lets buyers submit projects for bids from sellers and select which proposal best suits their needs.
- RenewaFi takes a success fee from each completed PPA that Yaffe says is minimal compared to other firms' fees.
Quick take: Yaffe likened RenewaFi to a stock trading app and the traditional PPA process to calling an individual stock broker on the phone to execute trades.
- Though the latter works for some people, others may prefer a more DIY approach and save on the fees, Yaffe says.