By Matt Gallagher, Red Herring
As Stem’s bare bones website mysteriously states, “Don’t turn off the lights.” Recently
launched out of stealth mode and landing a Series A investment of $10.2 million, the
company takes a green energy approach to energy savings without asking companies
to turn off a single switch or modify what they’re doing in any way. The payback is
immediate from day one, directly tackling one of the biggest expenses that affect the
bottom line–the electric bill.
The company takes advantage of computing power in the cloud to analyze massive
amounts of data. Stem then combines this data with state of the art battery power and
predictive analytics to do something that was impossible just a few years ago. It’s SAAS
solution analyzes a business’s energy usage, buys energy during non-peak, cheap times,
and stores the energy in a battery the size of a dorm fridge for later use. Essentially, it
combines business intelligence on one side, energy storage on another, and has developed
IP for predictive capabilities that allow businesses to buy energy more efficiently. The
savings more than pay for the service.
“We look at electric use like you’d look at financial trading,” said Brian Thompson, CEO
of Stem. “As energy use is constantly fluctuating, so does your energy costs. We buy
energy when it’s low, sell it when it’s high, and we do so whenever it makes the most
sense for our customers.”
“Like solar, the savings vary according to the size and type of business and are
significant. Stem tackles the portion of the electricity bill that hasn’t been touched
before–the part you have to pay,” Thompson continued. “We provide immediate savings,
and the customer doesn’t have to do a thing. People are going to be very pleasantly
surprised when they see the difference.”
Founded in 2009, the company has been focused on R&D, and has only begun to scratch
the surface when it comes to marketing, which is where this new round from Angeleno
Group and Greener Capital will come in handy. Though still in pre-sales, the company
has already signed enough customers to outstrip its manufacturing capacity until next
year. Its clientele include businesses with large commercial spaces – hotels, service
stations and supermarkets. While the company has initially targeted medium to large
businesses as it enters the market, Thompson views every business as a customer, as the
savings could equally apply to small businesses and even households down the road.
“We plan to play a critical role in the digitization of commercial energy,” Thompson
said. “We believe there will be a storage box in every business. Like hybrid cars, every
business should be a hybrid business. If you think of every business and every building
as a customer, and no one has deployed this technology yet, when you do the math you
realize we have a lot to be excited about.”
Not that there aren’t and won’t be competitors in the future. While other companies do
specialize in energy storage solutions, none couple it with business analytics and IP
that includes predictive capabilities. As competitors emerge, Thompson argues, Stem’s
technology will be well ahead of them.
“It would take significant time and resources to create a comparable solution for this
market, and we have a couple of major head starts,” Thompson said. “Like Google’s
advanced search algorithms keep it competitive, we have a system that works with
several years of development behind it.”
It was Stem’s uniqueness in the field that sealed the investment, explained Zeb Rice, Co-
founder and Managing Partner at Angeleno Group, the lead Stem investor.
“We have evaluated hundreds of companies in the cleantech sector. Stem is the only one
that uses big data, cloud computing and energy storage to improve the bottom line,” Rice
said in a statement.
And while the company’s solutions are green for the planet, they’re also green for the
dollar, Thompson pointed out.
“Any green energy improvement worth its salt is also a money making machine,”
Thompson said. “All companies have one green mandate- reduce the total cost of
ownership. We provide real savings while being good for the environment. That’s what
real efficiency is all about.”