ImpactAlpha, April 17 – Redaptive, a San Francisco startup, handles upfront cost of energy saving upgrades and recoups costs from customers’ energy savings. Redaptive works with commercial and industrial real estate owners to install metering devices on lighting, HVAC and other energy-intensive building systems.
“It’s very easy to be energy-efficient in a handful of facilities, but to do it across hundreds or thousands of facilities, most don’t have the manpower to do that,” Redaptive’s co-CEO Arvin Vohra tells ImpactAlpha.
Commercial property services firm CBRE Group, which represents a number of Fortune 500 companies’ property needs, led Redaptive’s $20 million funding round. Also participating were ENGIE New Ventures and GXP Investments, the corporate venture capital arms of energy companies ENGIE and Great Plains Energy, respectively (see, “SoftBank, Salesforce and Orange signal corporate venture capital’s tilt towards impact investing”). Silicon Valley growth capital firm Linse Capital also joined the round.
Redaptive says its products can significantly lower costs for large property owners and managers. Energy use in buildings accounts for between 40% and 70% of energy consumption in the US. Redaptive’s customers include Fortune 500 companies like Aramark and McKesson.
“High-tech companies that are investing in human capital from the real estate standpoint, like having high-end offices and nice spaces for their employees, are more likely to be efficient,” Vohra says. “But in the industrial or manufacturing sectors, or in [older] office buildings, the investment in real estate is limited to non-existent.”
Vohra says the company is addressing three challenges to improving building energy efficiency: upfront capital for upgrades (Redaptive covers the upfront upgrade costs), performance data, and project resources (i.e. the human resources to support a portfolio-wide upgrade.)
Redaptive has about $200 million in contracts in the works, covering hundreds of millions of square feet of property. The company says the projects could save more than 400 million kilowatt-hours in energy.
The company handles all of the upfront upgrades and installations and then recoups its costs from customers based on the amount of energy saved. “We underwrite and fund the upgrades, so we put our money where our recommendations are,” says co-CEO John Rhow.