National Grid, an international energy company based in the United Kingdom, this week launched its Silicon Valley venture capital arm by funding five companies. The current size of the fund hasn’t been disclosed, but Lisa Lambert, National Grid’s chief technology and innovation officer, says the team plans to invest US $253 million over the next two to three years, making 10 to 15 investments per year. The first five investments totaled $19.5 million.
It’s a great time to invest in energy-related startups, says Lambert. For one, there is surprising little competition.
“There was a massive boom in clean tech and energy sector companies in the first half of the 2000s,” Lambert says. “Massive amounts of capital were going into solar, wind, biofuels, and photovoltaics. These weren’t the typical VC deals, instead, they had long gestation periods, involved high amounts of capital. They were complex ventures.
“Then the bubble burst in 2008, and everyone left the sector.
“But some companies did come out of the carnage, cross the chasm, and become mature companies. These are interesting for us to invest in. There are a lot of [energy-related] areas that are emerging as big sectors—residential energy, distributed generation, and solar, for example—with huge companies in them. Amazingly, however, the VC industry has largely been ignoring these sectors. So many VCs have scars from the last time around. But we think these are important categories, that these technologies are important to futureproofing our business, and that there is a huge opportunity.”
National Grid Partners expects to be closely involved with the companies they invest in. While some of its investments are going into mature companies, others will be seed investments.
“By investing early in the life cycle of a startup, we can help form the strategy,” to better fit National Grid’s needs, Lambert says.
The organization plans to open up a co-working space to help incubate its companies, Lambert says. The location will be somewhere in the Bay Area and will open soon, but she’s not specifying where or when.
The companies in the inaugural class of National Grid Partners are:
AutoGrid, a data analytics company out of Stanford University. Founded in 2011, the company’s technology helps predict demand and supply on the electric grid network. That, says Lambert, “gets to the core of National Grid’s business.” Before National Grid’s investment, the company raised nearly $74 million, according to Crunchbase.
ClimaCell, a company aiming to provide accurate hyper-local weather forecasts by using IoT-based sensor networks and analyses of wireless signals in an area (a technique, the company says, that can pick up areas of precipitation), along with traditional weather information, as inputs to proprietary weather models. “Weather is important to us for disaster planning and for responding and recovering from storms,” Lambert says. “When we can get precise information about what weather will be doing in an area, we can improve readiness and reduce costs.” Before the latest investment, ClimaCell had gathered $65 million in funding.
Leap, which has developed an automated trading system for energy in hopes of making distributed energy markets more efficient. A tiny company about a year and a half old, Leap hasn’t disclosed any previous funding.
Omnidian, a provider of monitoring and contract maintenance for residential solar systems. Founded in 2015, Omnidian had already attracted $9.2 million in investment.
Sitetracker, a company using cloud-based software to allow people to better manage large infrastructure projects. “For us,” Lambert says, “that’s poles in the ground; we certainly need to manage how we deploy and build out our infrastructure.” Sitetracker recently completed its Series B investment round, bringing its funding to $35 million before the National Grid investment.