99 Problems and a Small Fund Was One
EEx Fund One makes its public debut
We were like an indie band writing our first album. No record label, but a strong ecosystem of experts surrounding us. Energy Excelerator pre-released EEx Fund One to a group of 150 Silicon Valley investors and corporates in April. Everyone from General Electric to Apple was there. Our $3 million proof-of-concept fund made its public debut last week with this article on Medium sharing the ethos behind the fund.
Why did Energy Excelerator raise a venture capital fund and how did we do it?
Track 1: “Mo’ Money Mo’ Progress”
Why did Energy Excelerator raise a fund? The reason is two-fold.
One, in energy the need for capital is B.I.G. and energy startups are notorious for requiring more capital and time than tech startups.
And two, we are a federally-funded nonprofit and, like our for-profit startups, we can benefit from diversifying our funding sources. This $3 million VC fund is a follow-on to the $30 million commitment made by the U.S. Navy in September 2013.
Track 2: “99 Problems and a Small Fund Was One”
How did we do it? In August 2013, we gathered a group of close friends and sketched out the initial outline of what we were calling at the time “HI ‘Smart Growth’ Fund”. We entered a startup state of mind and dove into a customer discovery process, speaking to dozens of startups in our portfolio, investors in our ecosystem, and other accelerators who had raised follow-on funds. Through that process we took away three pieces of sage advice: 1) stick to what you know, 2) keep it simple, and 3) never stop asking yourself “am I adding value?”
As we moved from customer discovery to pitch mode, the number one question we got was, “Why are you raising such a small fund?” The answer: this is our proof-of-concept fund. With it we are testing two hypotheses that speak to our ability to impact our transition to 100% clean energy: 1) by aggregating multiple types of capital (grant and venture capital) under one roof, are we accelerating the pace of commercialization for the most innovative startups and the most needed solutions; and 2) is our program a derisking tool to help investors source the best investment opportunities?
Track 3: “Pongamia Fields Forever”
We have invested in three companies that are deploying demonstration projects in Hawaii and have gone through a 12 to 18 month due diligence process that is the Energy Excelerator program: Ibis Networks, Plotwatt, and TerViva (more on each below).
These three companies and the rest of our portfolio know that we LOVE karaoke, so we put together a playlist of our favorite songs to accompany the debut of EEx Fund One. Enjoy!
EEx Fund One’s first investments:
Ibis Networks — Ibis Networks enables commercial and government enterprises to cut plug-load energy consumption by up to 40%. Originally developed for the U.S. military, Ibis Networks’ technology creates a secure, scalable, and centrally managed system for controlling and monitoring devices. Their core technology was spun out of Honolulu-based tech innovation firm, OceanIT; is deployed across three University of Hawaii campuses; and is being sold through Honeywell’s Alerton.
PlotWatt — PlotWatt’s platform utilizes machine learning algorithms to derive intelligible, actionable insights from existing smart meters or energy management system data. PlotWatt works with small-to-medium businesses, quick service restaurant chains, and smart grid service providers using energy analytics to provide feedback and easy-to-understand recommendations. They are currently signing up businesses for their Energy Excelerator demonstration project at info.plotwatt.com/energy-excelerator.
TerViva — TerViva develops and commercializes new crops that grow sustainably on underproductive agriculture land. Pongamia, their first crop, is a leguminous species of tree that produces an annual harvest of pods containing seeds that can be processed into eight times more fuel oil than soybeans, using less water and fertilizers than most other crops.
EEx Fund One investors:
AIO Group: Hawaii-based family of businesses specializing in media, including Hawaii Business and five other magazines, technology, sports, and food.
Allotrope Partners LLC: San Francisco Bay Area-based merchant banking company focused on clean economy opportunities.
Hawaii Strategic Development Corporation (HSDC): An agency of the State of Hawaii; through the HI Growth Initiative, HSDC supports the development of an innovation sector in Hawaii through a return driven investment program in partnership with private capital.
Hawaii Gas: Hawaii’s gas utility focused on diversifying Hawaii energy fuel resources, including renewable natural gas. Subsidiary of Macquarie Infrastructure Company.
Pacific International Center for High Technology Research (PICHTR): A Hawaii-based non-profit established to accelerate technology commercialization in Hawaii and the Asia Pacific region. Parent non-profit of Energy Excelerator.
Syzygy West: Family office investment vehicle providing early-stage capital to promising agriculture, energy, and water companies.
Wilson Sonsini Goodrich & Rosati: Premier legal advisor to technology, life sciences, and other growth enterprises worldwide.
And individual investors
Supporting Partner
Energy Excelerator Corporate Foundation Partner — Hawaiian Electric Industries (HEI) (NYSE — HE): HEI supplies power to approximately 95% of Hawaii’s population through its electric utilities, as well as banking and other financial services through its subsidiary, American Savings Bank.
