Fifth Wall Invests in Turntide Technologies’ Series B2 Round
Turntide’s overhaul of the electric motor has global implications
The electric motor, while not especially alluring, has been around since the 1800s, and works quietly in the background of our daily lives, allowing our elevators, water pumps, and air conditioning systems to operate. In fact, almost half of the world’s electricity — $1.2 trillion per year — runs through electric motors. Unfortunately, most of those motors don’t run efficiently, and so up to half of that electricity is wasted. For those keeping up, that implies that almost a quarter of the world’s electricity is wasted by electric motors.
Turntide Technologies, led by Chairman and CEO Ryan Morris, has reimagined the electric motor, and developed something that is not only more efficient, but cheaper to manufacture, and more reliable. The company’s innovation — an advanced type of “switched reluctance motor” (SRM) — runs with 30% — 60% energy savings over the traditional AC Induction motors that they replace, and result in enormous energy savings for its users.
We have been so impressed by Turntide’s motor and its implications for the globe that we have invested in their Series B2 funding round. We join other equally-impressed investors including Breakthrough Energy Ventures, Keyframe Capital, FootPrint Coalition, Captain Planet LP, The Amazon Climate Pledge Fund, JLL Spark, and BMW i Ventures, to name a few.
In relentless pursuit of improving the electric motor
I first met Ryan Morris at a dinner in San Francisco, six years ago. He was an activist investor in his 20s whom Bloomberg had pinpointed as a wunderkind. Highly intelligent and a high-achiever, Ryan was obsessed with electric vehicles to a degree I had never seen. Over dinner, he revealed himself to be deeply knowledgeable about the subject, which was a breath of fresh air compared to most investors who have only a passing knowledge.
At the time of our meeting, Ryan was executive chairman of Sevcon, a company making electric powertrains for non-road vehicles (think forklifts). A year later, Sevcon was successfully sold, and, in relentless pursuit of his electric motor obsession, Ryan was introduced to Software Motor Company (SMC), initially making an investment in the firm and later becoming executive chairman. Today, that company is Turntide Technologies.
SMC was a low-margin electric motor manufacturer selling into the rather uneventful High Volume Air Conditioning (HVAC) market. Knowing this, I was curious to understand how they had captured Ryan’s attention, so I paid him a visit to peel the onion a little.
Puzzle solved
What I learned is that the motor SMC had designed (the SRM) was unique. It used the simplest motor architecture and only basic steel and copper — no exotic materials or magnets — which made it easier to manufacture. The historic downside to SRMs is that they are very finicky and difficult to control, and this is also the reason others in the industry had given up on improving them, relegating them to just a few niche corners of the world where their high reliability was tantamount — think nuclear power plants and submarines.
The difficulty is that SRMs must be fed electric current that has to be extremely and precisely “shaped,” lest the motor quickly become noisy and inefficient. No one had found a way to fix this, meaning traditional SRMs were noisy and inefficient, but reliable.
What Ryan found in the team at Turntide was an incredible group of academics who, for seemingly the first time ever, had cracked the code. By packaging edge computing into the motor itself, incorporating AI and machine learning to efficiently direct the current, and leveraging a sophisticated simulation-based design, the company had managed to make SRMs which were quiet, efficient, and reliable. A proverbial triple-threat. In effect, Turntide took the best of traditional SRM mechanics and paired it with the best of today’s technology to create a motor that is now considered the “LED” of the electric motor world. It’s essentially software wrapped in metal. The motors are cheaper to make, more reliable, and more efficient than traditional electric motors.
The largest real-world opportunity size I’ve seen
Motors are everywhere. From the elevators in your office building, to the fan in your car, and, as we saw with the debacles around the recent outages in Texas, electric motors run most of the most critical parts of our modern society, like water and sewage treatment plants. So, whilst being unsexy, it is a $100 billion market consuming 45% of the world’s electricity (9,900 trillion kWhs), at an annual cost of almost $1.2 trillion. In my career, this is likely the largest real-world opportunity size I’ve ever seen for a startup.
Savings for real estate equal to the entire U.S. energy bill
Turntide’s SRMs result in 30%-60% energy reductions in the real world. That statistic, verified by the U.S. Department of Energy and top electrical utilities, checked out across countries, customers and climates who are pushing out tonnes of HVAC. If Turntide’s motors replace all electric motors, it could result in approximately $500 billion in electrical cost savings, according to the company. That is immense. In fact, a year ago, I was in discussions with a global commercial real estate services company. In running the numbers, they discovered that if they swapped out all of the motors in the buildings they manage around the world with Turntide’s motors, they would save the equivalent of the entire United States’ electricity bill. That’s one company, installing one product. Real impact.
A practical solution to climate change
Fifth Wall’s own limited partners, who include some of the world’s largest real estate owner-operators, spend significantly on HVAC. In fact, depending on building heating and cooling needs, HVAC can comprise up to one-third of their total energy usage. With buildings contributing almost 40% of all greenhouse gas emissions globally, being able to save 30%-60% of the energy used in HVAC systems can meaningfully move the needle on climate change. And most importantly, it doesn’t require any crazy new science, or billions of dollars of research. These motors are here now, and can be installed immediately.
The equivalent of seven Amazon rainforests
Investing in Turntide Technologies may result in reaping the extraordinary benefits of SRMs’ multiple brute force advantages: greater reliability, greater efficiency, and lower cost production. Not only have these motors been profitable for Turntide and cost-saving for the clients, the effect these motors could have on the world’s carbon footprint and on climate change is massive. According to Morris, if we could replace all of the motors used in buildings on the planet with SRMs, it would be the carbon equivalent of adding seven Amazon rainforests. Effectively, what we believe we’ve landed on is a massive opportunity for a very practical arrow in our quiver against climate change.
In today’s age of instant-gratification and disposability, Turntide’s thoughtful approach to fixing what’s broken is rare and especially appreciated by Fifth Wall. It took Ryan Morris and the Turntide team to see the flaws of an old technology, hold a vision of improving it with new technology, and take the time to do so without wavering. Today, it’s clear we have the technology to make an enormous impact. As the globe races to meet carbon emission goals by the year 2050, we are proud to support Turntide and its quest to combat climate change in a very practical and powerful manner.
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