has raised $23 million in its Round C funding to move its energy auditing and utility measurement and verification business further into Europe. The startup also looks to expand its sales efforts in regulated and deregulated markets in North America.
Whether it’s an American regulated utility or a European player in the deregulated market, or any entity in between, “all of these providers have to understand their customers better,” said Swapnil Shah, CEO of FirstFuel.
As it has grown, the Lexington, Mass.-based startup has streamlined its offerings into two software-as-a-service products. FirstEngage is a self-serve engagement portal for utilities to offer their C&I customers. This is what FirstFuel offers via its partnership with Opower. The duo has announced that three utility clients are leveraging the combination of the two companies to serve the full spectrum of their customer classes.
The other product is FirstAdvisor, which combines virtual auditing, measurement and verification, and portfolio screening tools. It has grown out of its original business of solely focusing on virtual auditing. The service arm of utilities, particularly deregulated ones, can leverage this to design more customized solutions for customers that might include solar, storage and efficiency offerings.
“The line between ESCOs and deregulated utility companies is being blurred,” said Shah. FirstFuel is competing with various companies that are offering intelligent demand-side analytics, including EnerNOC, Lucid, C3, BuildingIQ, Ecova and Schneider Electric.
It’s not enough to just be a virtual auditing firm or demand response company these days. Instead many different firms are merging in a space where they can more holistically assess and address the energy demand of commercial buildings, either through utilities or directly for clients.
Currently, about two-thirds of FirstFuel’s business is with regulated utilities in North America, a figure that that will likely shift to about an even split between regulated and deregulated utilities. A small portion also comes from the government sector, such as the work it does with the GSA. Shah said he expects nearly one-third of FirstFuel’s overall revenue to come from Europe a few years from now.
With E.ON as a strategic investor in its previous funding round, FirstFuel is already working with the European utility to provide its small and medium-size business clients in the U.K. with an energy management portal.
The shifting, deregulated markets are where FirstFuel sees the most potential in terms of innovative offerings.
In the future, a marketplace like the one being imagined through New York’s Reforming the Energy Vision initiative could allow FirstFuel to help the platform providers (that are currently distribution utilities) mine data for commercial and industrial customers and extract meaningful information that they could then use to define offers for those customers. That offer might be energy efficiency upgrades funded by ancillary services payments, coupled with energy storage and on-site generation to eliminate peak demand.
“The data is only as good as what you do with it. By itself, it isn’t that interesting,” said Shah, adding that in an energy market like the one being proposed in New York, “Utilities are in a good place to glean insights from the data and then share those with the marketplace."
Even before states like New York completely overhaul their distribution energy markets, “We can mine that data and extract information for utilities,” said Shah. “The fundamental premise is the same.”
The recent addition of the Round C doubles FirstFuel’s total funding to $45 million. Next World Capital led the round and was joined by previous investors Battery Ventures, Rockport Capital, E.ON, Nth Power and new investor Electranova Capital, a fund sponsored by EDF Group in France.