The Climate Opportunity in Industrial Automation & Energy Intelligence: Why Clean Energy Ventures Invested in ndustrial

By Peter Sopher & Daniel Goldman

According to International Energy Agency (IEA) data, buildings and industrial facilities, respectively, accounted for 39% and 24% of global energy-related emissions in 2018.

Encouragingly, on the buildings side, solutions like building energy management software utilizing innovative sensing technology have been tackling this problem for years and are realizing low hanging fruit for building efficiency. In fact, the TRACXN database finds 300+ active startups, alone, that have built building-oriented software solutions.

ndustrial, early-stage energy intelligence startup

However, what has become clear from our analysis at Clean Energy Ventures (CEV), which includes two dozen interviews with industry participants and experts, is that industrial facilities are getting left behind their residential and commercial building peers.  

The industrial sector spans mining, a broad range of manufacturing, construction, electricity, water, and gas companies and comprises 25.6% of global 2018 GDP. Industrial ‘facilities’ largely fall in manufacturing, which alone comprises 15.4% of global 2018 GDP. Cooling is especially energy-intensive, so cold storage and food & beverage processing are among types of industrials that can benefit immensely from energy efficiency. Industrial facilities generally produce a high volume of low-margin products sold to global commodity or retail markets. Energy is usually a top two or three expense for these industrial facilities; so, significantly lowering this expense translates to increased global economic competitiveness for manufacturers.

U.S. industrial facilities are mainly composed of older, non-standardized facilities which are sensitive to changes in operational performance. They require highly customized energy management systems which can be complex to integrate with legacy systems. At present, software systems that provide energy management to industrials have often lacked emphasis on operational flexibility and material energy intelligence simultaneously, including a critical need of coincident electricity peak load reduction.

CEV was excited to find a solution that addresses energy efficiency and productivity in these critical industrial facilities. We recently co-lead the Series A financing of ndustrial with ENGIE New Ventures, the corporate venture arm of the French global utility.  We see a massive unfilled need in this broad and diverse sector, and a unique, proprietary solution to meeting the challenge.

Making Industrial Facilities More Efficient Through Energy Intelligence

ndustrial is a SaaS company offering highly customized data and energy intelligence (“EI”) solutions to digitize antiquated industrial facilities. To date, the company has bootstrapped their progress to millions of dollars in annual revenues, and they’ve developed a robust product-service offering, which, based on our assessment, many industrial enterprises would find compelling.

The world’s largest cold storage company is the flagship customer champion through which ndustrial has developed over the past several years.  Through this relationship, ndustrial has developed differentiated capabilities for integrating into antiquated facilities without disrupting existing workflows. They ingest and transform a wide range of sensing data from the facility, utility bills and market pricing into data lakes from which machine learning algorithms recommend and automate industrial process improvements. The ndustrial platform enables energy management capabilities that have improved energy intensity at customer sites by as much as 40%. These gains are primarily monitored via the proprietary ndustrial application, but often enacted via applications ndustrial’s customers build atop of their software. Differentiating technical capabilities of ndustrial include the ability to react to changes in data in real-time versus alternative systems that have a significant lag, as well as a proven ability to adapt to a wide variety of customer operations and legacy systems reducing costly customization.

Coincident peak price avoidance – the ability of a user to reduce their demand charges by utilities – is an area of energy intelligence where ndustrial is uniquely positioned to have significant financial and environmental impact. And for industrial customers, ndustrial not only relays coincident peak forecasts with 90%+ accuracy multiple days in advance, but these technologies can also automate industrial facility controls such that production is optimized while costs are minimized. In short, they enable the capabilities of behind-the-meter “virtual power plants” with the benefit of demand response captured by the user.

Growing energy Intelligence into a GHG Emissions Reduction Powerhouse

The company’s leadership is comprised of former energy industry and software veterans experienced in scaling businesses. Moreover, a strong group of anchor customer sites provides a solid base from which to expand within the cold chain space and adjacent industries.  Energy-intensive industrials are waking up, realizing technology and software can be a highly economic proposition for cost management, margin improvement, and significant productivity gains.

As ndustrial scales, not only will reduced grid energy needs lead to avoided greenhouse gas (GHGs) emissions, but improved resource and space efficiencies will also cut hundreds of millions of tons of carbon dioxide-equivalents via reduced refrigerant, construction, and other needs. At Clean Energy Ventures, we invest in companies where gigaton-scale GHG emission reduction is core to the company’s business, revenue growth and profitability. Via reduced energy usage in cold storage, food processing, cement, steel, and manufacturing, as well as reduction GHG emissions from avoided refrigerant leakage and facility construction, ndustrial can meet this target.