Fifth Wall Invests in Turntide Technologies’ Series B2 Round

Turntide’s overhaul of the electric motor has global implications

Hear from Turntide Technologies’ CEO & Executive Chairman, Ryan Morris, in episode 13 of Fly on the Wall.

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.

This post is presented for informational purposes only, is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Fifth Wall Ventures Management, LLC or its affiliates (collectively, “Fifth Wall”; any such investment vehicle, a “Fund”). Any such solicitation of an offer to purchase an interest will be made by a definitive private placement memorandum or other offering document.

Forward-looking statements and opinions as to carbon reduction initiatives and real estate markets or any other matters, as expressed in this presentation, are those of the individual presenters, but are not necessarily the views of Fifth Wall as a firm, and cannot constitute a guarantee of future success or profitable results. As a result, investors should not rely on such forward-looking statements and/or opinions, or on anything else contained in this post, in making their investment decisions. Moreover, certain information contained herein may have been obtained from published and non-published sources prepared by other parties and may not have been updated through the date hereof. While such information is believed to be reliable for the purposes for which it is used herein, Fifth Wall does not assume any responsibility for the accuracy or completeness of such information, and such information has not been independently verified by Fifth Wall. This presentation speaks as of its publication date, and Fifth Wall undertakes no obligation to update any of the information herein.

In addition, in considering any prior performance information contained in this post, prospective investors should bear in mind that past results are not necessarily indicative of future results, and there can be no assurance that any Fund will achieve results comparable to those of any prior or existing Fund or portfolio investment of Fifth Wall.

None of the information contained herein has been filed with the United States Securities and Exchange Commission, any securities administrator under any state securities laws or any other domestic or foreign governmental or self-regulatory authority. No such governmental or self-regulatory authority has passed or will pass on the merits of the offering of interests in any Fund or the adequacy of the information contained herein. Any representation to the contrary is unlawful.

This communication is intended only for persons resident in jurisdictions where the distribution or availability of this communication would not be contrary to applicable laws or regulations. Any products mentioned in this post may not be eligible for sale in some states or countries. Prospective investors should inform themselves as to the legal requirements and tax consequences of an investment in a Fund within the countries of their citizenship, residence, domicile and place of business.

No assurances can be given that any of the carbon reduction initiatives or other initiatives described in this presentation will be implemented or, if implemented, will be successful in effecting carbon reductions or any other initiatives. Further, no assurances can be given that any Fifth Wall fund or investment vehicle will ultimately be established to invest in these technologies or that such fund or investment vehicle, if established, will successfully identify and execute on investments that meet its stated objectives. Investments targeting carbon emission reductions involve substantial risks and may not ultimately meet Fifth Wall’s stated investment objectives. Investors should consult their own financial, tax, legal and other advisors in connection with any proposed investment and should carefully review all disclosures and descriptions of risk factors that are contained in relevant offering materials.

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INSIGHTS is the official blog of Fifth Wall Ventures, exploring the Built World’s biggest ideas, emerging trends and the most audacious concepts transforming the ways we live, work, sleep, consume, move, create, connect and play.

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Greg Smithies

Greg Smithies

Investor in Climate Tech, Sustainability, Robotics, AI, Software, and Sustainability applied to Unsexy Industries

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