First Stage Investor

New Pick: Invest in Efficient Energy Use

New Pick: Invest in Efficient Energy Use
By Andy Gordon
Date October 15, 2020
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Deal Details
Startup: COI Energy
Security type: Crowd SAFE
Discount: 20%
Valuation (cap): $18 million
Minimum investment: $100
Where to invest: Republic
Deadline: December 1, 2020


The way buildings are supplied energy is incredibly inefficient. So is the way buildings consume energy. The problem is that electricity — unlike other commodities — can’t be stored for use at a moment’s notice. It needs to be available when the switch is turned on — or when use surges. So electric companies try to operate at peak generation capacity — generating high levels of electricity even when it’s not needed. And the cost of operating at peak capacity is passed on to the building/customer.

Peak power has a lot to answer for. Spikes in electricity demand occur infrequently — for office and commercial buildings it’s less than 20% of the time. Nevertheless, peak generation capacity is required to meet peak demand. 

So what can be done about it? 

Two things. Reduce peak demand. And to lower electricity bills even further, reduce electricity use across all time periods. 

There are some companies that help building owners and operators eliminate unnecessary energy use (and charge based on percentage of energy saved). But there’s only one company that has the best interactive platform… provides real-time alerts… uses machine learning to predict spikes BEFORE they happen… and charges a flat monthly fee.  

And depending on the level of service requested, this company will even track and manage carbon credits earned through using its platform. 

That company – COI Energy –  is the startup I’m recommending to you today. 

COI Energy reduces electric bills by reigning in peak usage and eradicating energy waste. And there’s a big bonus: it also helps the grid. 

COI’s platform has an energy user side and a utility side. The utility can see everything the building is doing to save on its energy usage (up to 30% with COI’s help). It can then redirect the grid’s excess capacity from that building to other users who need it more, including underserved communities — COI has partnered with Habitat for Humanity and others to subsidize this. The utility spends less energy generating peak electricity — which is the most expensive energy there is. And COI passes ALL of those savings to its customers. 

How the Platform Works

For utility customers, COI installs its “gateway” hardware at each building. The COI gateway pulls real-time data from utility grade meters at a customer’s site in regular intervals. It translates that data into behavioral predictions, including those that needlessly inflate peak energy use. It then changes that behavior. 

It can be as simple as changing the settings on a building’s air conditioning system to account for cooler or cloudy days. Or as sophisticated as recalibrating the variable drive settings on a building’s pumping systems. COI does this automatically. Or, if the customer prefers more control,  COI sends an alert with the recommended change. 

The utilities themselves manage demand via simple two-way communication with their customers and COI’s comprehensive reporting capability. Utilities can view behind-the-meter assets — power equipment located inside the buildings — from a single application. They then use the data to optimize the supply of energy across their network. 

COI Energy’s platform is much better than what’s available because the platform is so well thought out. The proof is in the pudding. COI’s customers save so much so quickly, they’re made whole within six months. In the months and years that follow, they’re reaping the savings. 

The ability to see significant savings right away is a big deal. COI is running a very sticky business… so sticky that not one of their 150 customers have jumped ship in the two years they’ve been in business. Two years with zero churn! It’s unheard of. But COI founder SaLisa Berrien says it’s no accident. “What makes us stand out is our team with over 160 years of collective experience in energy tech, our intimate understanding of customer problems and our maniacal focus on customer delight.”

Just two years in and COI is massively exceeding expectations. Usually, startups begin with small victories and a slow ramp-up in sales. With her extensive network in the energy sector, SaLisa knew she could do better. And, boy, has she ever! COI already has two major contracts. One is with billion dollar utility companies Tampa Electric Company (TECO) and the other with the New York Power Authority (NYPA). 

It’s a major coup and a huge opportunity. The TECO contract alone is worth up to $10 million a year (in full force) and lasts for three years.

This year the company is on track to make $1.5 million. It would have been more if not for COVID-19 delaying the start of its two utility contracts. With its utility projects fully up-and-running by the end of this year — and with the money from this raise beefing up its sales and marketing team — SaLisa expects next year’s revenue to hit $14 million. “It seems like a big jump,” she says. “But really it’s not. Apart from the Covid delays, customers were getting early adopter pricing. Next year is when we’ll reap the financial rewards from everything we’ve done so far. No new initiatives are needed.”

Which isn’t to say that COI isn’t planning any new initiatives. As soon as this week or next, it’s bringing on a major New Jersey-based channel partner that serves the state’s hundreds of health care facilities. 

That will be COI’s second major partnership. The first is with SAP, the world’s third largest listed software company. COI is the only energy on-demand platform application on the SAP App Center. And SAP has already lined up seven utility customers for COI.  

The outlook couldn’t be more promising. COI has the benefit of a founder who has spent the last 25 years supporting collaboration between utilities and businesses to help the grid and the planet. It continues to see strong interest in adopting its platform.  And the rolling brownouts and blackouts on the West Coast reinforces the need for COI’s energy management tool that operates in real-time. 

If you choose to invest in COI, your money will be going to a company primed for a breakout year in 2021. 


How to Invest

COI Energy is raising up to $1.07 million on Republic. If you don’t already have a Republic account, you can sign up for one here.

Once you verify your account and are logged in to Republic, visit the COI Energy deal page.

Then click the blue “Invest in COI Energy” button. Enter the amount you want to invest, starting as low as $100, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.

Risks

This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. COI Energy might need to raise another round of funding in a year or two, if not sooner.

If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid.

Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.

All that said, I believe COI Energy offers an attractive risk-reward ratio.

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