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BFD Expert Voices - Climate Deals

BFD Expert Voices

David Energy, a New York-based electricity provider, has closed a $20 million Series A led by Union Square Ventures' climate fund and Keyframe Capital, CEO James McGinniss tells Alan.

Why it matters: New York is among the dozen-plus states that have enabled the rise of retail electricity providers, and David deploys software that integrates with customers' distributed energy resources. 

The details: Additional new investors include Toba Capital, Turntide and James Dice, along with existing seed investors Equal Ventures, Box Group and MCJ Collective.

How it works: Retail electricity providers (REPs) essentially sell the electrons flowing across poles and wires to the homes and businesses at their endpoints. 

"Think of us as Amazon or a logistics company shipping packets of energy on public roads," McGinniss tells Axios.

The company's software integrates with smart thermostats, solar panels, battery systems, EV chargers and other customer resources.

The software adjusts consumption in real-time, chiefly by dialing back usage as much as 50% when electricity demand is high, helping reduce electricity bills while easing strains on the grid. 

Go deeper: David Energy customers include Barry's Bootcamp and Crunch Fitness franchises, and the company plans to expand this summer to residential offerings.

The company had initially hoped to sign up large commercial and industrial clients, but soon pivoted to smaller commercial tenants, particularly "chain stores, restaurants, gyms, and retail storefronts," McGinniss says.

The company is set to launch a pilot in New York this summer aimed at the residential market. 

David's service area also includes New Jersey and Massachusetts, and it plans to introduce its commercial offering in Texas this fall.

What they're saying: "We know Shell and BP and Exxon because we’re so familiar standing at the pump filling up gas. There’s not a similar experience with electricity," McGinniss tells Alan. "But as ... power outages continue to happen and [people] get generators or use their Ford F-150 to back up their home, the experience users have with their electricity is going to get more and more real."

1 big thing: David Energy closes $20M Series A

Illustration of a lightbulb with a glowing filament in the shape of a bar chart.

Westbeck Capital Management raised just over $10 million in additional funding for its Energy Opportunity Fund, Megan reports.

Why it's the BFD: As global oil prices skyrocket, Westbeck needs to deepen its coffers to remain competitive. 

Context: Westbeck Capital Management is a London-based commodities-focused hedge fund managed by Jean-Louis Le Mee and William Smith. It launched its Energy Opportunity Fund with $100 million in 2016.

Driving the news: According to SEC documents filed Friday, Westbeck's Energy Opportunity Fund raised $10,050,000 from unnamed investors. 

State of play: As oil prices tick up globally, commodities funds stand to have a lucrative payday after a bumpy few years. 

Bloomberg reported March 4 that Westbeck predicted oil prices would rise above $200 per barrel. As of Friday, prices remained around $111 per barrel.

Be smart: Westbeck is putting its money where its mouth is and betting that another $10 million in its fund could double over the next several months.

Westbeck did not return Axios' request for comment.

2. BFD: Westbeck fund raises $10M as oil prices surge

Illustration of an oil barrel with a flower made of cash growing out of it.

The Clean Economy Employment Now (CLEEN) Project features more than 200 proposals submitted from companies, NGOs and individuals.

Why it matters: More than 50 of those ideas have been implemented by the Biden administration and adopted by Democratic lawmakers, the project said in an "annual report card" it posted online. 

Companies that have submitted proposals include Generate Capital, Electrify America, Arcadia Power, and Capricorn Investment Group, among others.

Go deeper: Some of the ideas that have made their way into policy or proposed legislation include:

The White House's decision to create a team focused on revitalizing communities long dependent on coal mining and coal-fired power plants.

A new White House effort to improve performance standards at government buildings. 

Movement by the Department of Transportation to help states build electric power and internet infrastructure alongside the grassy strips that make up highway right-of-ways. 

A Civilian Climate Corps integrated into congressional legislation from Democratic lawmakers.

By the numbers: The database drew more than 10,000 visits in 2021, the project says.

Background: CLEEN Project founder Jeff Tannenbaum tells Alan the project began in response to there being no repository for all the ideas floated in public and private sectors. "People print them, they put them in fancy binders and then they gather dust," he says. "There has to be a better way: Let’s create a co-op of the best private sector and public-sector ideas, let’s standardize them into a database for the federal government."

He adds that the database bypasses the lobbyists, and federal leaders and legislators can choose the ones they're most interested in. 

3. The "co-op" of ideas influencing U.S. energy policy

If you liked it then you should have put a gun on it: The U.S. EV maker Canoo showed off its models at an expo center outside Tulsa, Oklahoma, last week: a utility van, a similar cargo vehicle and a pickup with a [spins wheel] scoped rifle mounted to the top of the cab. The company, which last month disclosed a $138.1m quarterly loss in Q4, plans to build its vehicles in Oklahoma and Arkansas, with production reportedly set to begin before the end of the year.

The best intentions: Mexico's proposed energy reform initiative has an awkward outcome. The plan would actually increase emissions instead of you know, decreasing emissions, according to a Moody's report released Friday. The report is a laundry list of wrong decisions at the wrong time: Investment in lower-carbon technology has slowed and is triggering a reduction in private investment, electricity costs are on the upswing, and a renewed reliance on fossil fuels threatens Mexico's global standing in a transitioning energy market. 

TL;DR: Mexico still doesn't quite have its act together when it comes to renewables, and the proposed reforms won't help matters any.

Totally blowing it: TotalEnergies, the French mega-energy conglomerate, updated its 2021 annual report to disclose its entities with ties to Iran and Syria. Per Sec. 219, all companies must disclose business dealings that could violate U.S. sanctions, something TotalEnergies conveniently forgot. In all, TotalEnergies added six companies under consolidation (five in Iran, one in Syria) in 2021.

4. 🌡️ Temperature check

Regeneration.VC raised $45m for its debut fund focused on decarbonizing consumer goods. http://axios.link/WeHm

Pixxel, a hyperspectral imaging startup, raised $25m in Series A funding from Radical Ventures, Relativity Space co-founder Jordan Noone, Seraphim Space Investment Trust Plc, Lightspeed Partners, Blume Ventures and Sparta LLC. http://axios.link/Zqax   

EIG, an energy-focused institutional investor, teamed up with energy infrastructure company Fluxys to jointly acquire an 80% equity stake in GNL Quintero S.A., a liquefied natural gas regasification terminal in Chile, from Enagas Chile SpA and affiliates of OMERS Infrastructure. http://axios.link/1KjF

Heliogen, a renewables company out of Idealab, teamed up with Woodside Energy for a 5-megawatt solar energy module in California. http://axios.link/XTC2

Shopify purchased 50,000 tons of carbon offsets from DroneSeed, a reforestation company. It is DroneSeed's largest sale to date. http://axios.link/UgRP

5. Hot deals

Zoe Berkery has been promoted to chief operating officer at CleanCapital, a renewable energy investment startup. She was the company's first employee and was most recently head of asset management there. http://axios.link/BNbA

Actis expanded into Japan with two hires from Macquarie Group: Jun Ohashi as a partner and head of Japan, and Tareq Sirhan as head of North Asia energy. http://axios.link/QRif 

6. It's Personnel

🌎 Happy Monday and welcome to Climate Deals.

👋🏻 Welcome to week two! We're Alan Neuhauser (@alneuhauser) and Megan Hernbroth (@megan_hernbroth), and we want to hear how we did in our first week! Drop us a line.

🌿 Megan took over the yard work this weekend and eradicated most of the weeds ahead of a rare spring storm in Southern California. Let's give it up for some measurable moisture!

🥶 Alan took his winter jacket out of the storage closet for the third time in a month. Here's hoping this weekend marked the last of D.C.'s 30° weather.

Thanks for reading Climate Deals, and please be sure to share with your working groups, project leads and mentors.

March 28, 2022

1 big thing: David Energy closes $20M Series A