David Energy, A New Kind of Energy Company, Announces $1.5 Million in New Funding
March 5, 2020
David Energy, a new kind of energy provider, announced the close of its $1.5 million Pre-Seed round co-led by Box Group and Greycroft. Great Oaks, Oceans, and a group of strategic angel investors including Zach Weinberg, Nat Turner, and Kiran Bhatraju also joined the round.
David Energy has developed a proprietary software platform that utilizes machine-learning to act as the Energy Operating System for buildings and modernize how customers purchase energy. Used by commercial and industrial owners and operators, the company’s platform was developed to streamline wholesale energy purchasing, report sustainability metrics and optimize Distributed Energy Resources such as smart thermostats, battery storage, and solar according to a building’s unique needs.
David Energy is founded by James McGinniss, Brian Maxwell, and Ahmed Salman. McGinniss, CEO, previously founded and led Texas Guadaloop, a team of over 30 engineers competing in the SpaceX Hyperloop competition, where they received the 2017 Innovation Award. Salman, CTO, is an automation industry veteran with 15 years of experience at Siemens and Schneider Electric. Prior to co-founding David Energy, Ahmed developed a proprietary Energy Management Software platform for R3 Energy Management, a NYC energy consulting firm acquired by David Energy prior to the Pre-Seed fundraise. Prior to David Energy, Brian Maxwell founded and sold two renewable energy companies that developed hundreds of megawatts of utility-scale solar projects globally.
“We are at the dawn of a 40-year energy transition away from large, centralized, and analog fossil fuel plants and towards small, distributed, clean and digitally native energy resources that are placed in users’ homes and buildings,” said James McGinnis, Co-founder & CEO of David Energy. “This tectonic shift requires an entirely new business model and approach that incumbents are poorly positioned to create.”
Retail Electricity Providers (REPs) are traditional energy companies that predict user demand and purchase energy so that customers aren’t exposed to price fluctuations. The power REPs buy is then shipped on wires owned by the utilities. Distributed Energy Resources (DERs) such as smart thermostats, battery storage, solar power, backup generators, and advanced HVAC controls, which require software to be controlled, are fundamentally changing the electricity grid and shaking up this old-world, analog industry. REPs are having a hard time catering to customers with DERs, who are able to respond dynamically to energy markets and whose resources sometimes allow them to sell power back into the grid.
“This is a hard and essential problem to solve: we’re seeing how out of date our energy grid is through stories like the power shut offs in California while at the same time we need a very advanced grid to address climate change, one of the greatest issues of our time,” said Adam Rothenberg, Partner at BoxGroup. “David Energy has put together a dynamic team of domain experts who are leveraging software that will help accelerate the spread of renewables and save customers money while creating a more resilient grid. We think David Energy is well-positioned to lead the pack and create a category defining business.”
David Energy’s software platform and personalized approach to energy supply contracts offer customers unprecedented control and visibility while addressing many of the problems inherent in the shift to distributed and variable sources of electricity. By leveraging building data, demand-side software, and the DERs the building has at its disposal, the company’s Energy Operating System can intelligently buy power and optimize traditional supply contracts while integrating customer resources seamlessly into energy markets. As the world shifts to carbon-free energy and building owners face new regulations like the Climate Mobilization Act in NY, David Energy can help by sourcing cleaner sources of energy and ensuring buildings are consuming energy responsibly.
David Energy is taking a different approach than traditional REPs in how they charge customers. By taking a flat SaaS fee instead of a large markup on the amount of power procured, David Energy has true financial incentive alignment with customers to keep them happy, lower their energy bills, provide transparency, and minimize consumption.
“Energy is a trillion-dollar-plus global market that surprisingly has had little software innovation,” said Teddy Citrin, Principal at Greycroft. “David Energy is driving a wedge in the market by enabling cost reductions and superior operations, for some of the most advanced buildings in the world. James McGinniss is an incredibly ambitious entrepreneur that is meeting a massive global market. These are the ingredients we love.”
