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NineDot Energy raises $225M for community batteries

Jan 11, 2024
an illustration of the statue of liberty holding a battery instead of a torch

Illustration: Tiffany Herring/Axios

Neighborhood energy storage developer NineDot Energy has raised another $225 million to install batteries in and around New York City, the company announced yesterday.

Why it matters: The startup's unusual business model is drawing significant buy-in from cautious institutional investors.

Driving the news: ManuLife Investment Management led the raise with $135 million. The firm, the asset manager for Canadian insurance giant ManuLife Financial, is a new investor in NineDot.

  • Existing investor Carlyle participated. The round brought NineDot's total funding to about $400 million.

How it works: NineDot develops midsize battery systems in and around New York City. They average 5 MW — bigger than what you'd find in a house, but smaller than most grid-scale systems.

  • NineDot generates revenue by selling the energy from its batteries to local subscribers, a model that's similar to community solar.

Be smart: It's not quite as simple as that: there's no easy way to track electrons across a grid, so NineDot uses certificates created by a state program to account for the energy it provides.

The intrigue: Climate startups have struggled to win investment from institutional investors, either because their technology is seen as too nascent or the check sizes too small to make it worth a firm's time.

  • NineDot would seem to fit that mold: its projects are expensive to build, take years to generate revenue, and represent a shift from conventional wind and solar.

Yes, but: Once online, NineDot's batteries generally use fixed-price contracts — providing the kind of predictable revenue that's needed to attract a ManuLife or Carlyle.

The latest: NineDot's first project, in The Bronx, went online last summer.

  • The Brooklyn-based startup has another 30 projects under construction in the New York City metro area. It aims to have a 400 MW development pipeline by 2026.
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