Exergonix just acquired "substantially all of the assets of Coda Energy," a twice-bankrupt California manufacturer of energy storage systems. Exergonix will assume management and operation of all of the already-installed Coda systems operating at customer sites in California, according to a release.
Exergonix, founded in 2010, claims to have "reliably delivered energy projects geared for commercial- or utility-scale applications and has participated in strategic partnerships to win utility grid-level projects." Peter Nortman, Coda’s founder and CTO, "will join the management team at Exergonix and will help transition all existing [Self-Generation Incentive Program projects] to Exergonix."
In 2013, we covered the bankruptcy of VC-backed EV maker Coda Energy and the plans of its new multibillion-dollar investment firm owner Fortress Investment Group, which sought to resurrect Coda as a grid battery systems provider.
As Jeff St. John reported, the Los Angeles-based startup with manufacturing in China raised $344 million from investors including former U.S. Treasury Secretary Henry Paulson, but sold fewer than 100 of its electric-powered sedans before filing for bankruptcy protection. Fortress bought its share of the company's assets for $25 million in a "Section 363" sale.
The new business, created with the close of bankruptcy proceedings, consisted of the “core technology, engineering and energy storage assets of Coda Holdings, Inc., as well as its key contracts and partnerships,” which included deployments in a San Diego apartment complex, as well as in two InterContinental hotels in San Francisco with energy management startup Stem.
Despite some success in the behind-the-meter commercial and industrial energy storage market, last year Coda ended up entering Assignment for the Benefit of Creditors, according to its CEO at the time, Paul Detering. Detering commented to GTM, "Unfortunately, Coda Energy was unable to secure further funding for its 2016 operations."
At its high point, Coda Energy had about 60 employees and had installed a fleet of approximately 60 commercial energy storage systems under California's SGIP initiative. At the time, a press release noted, "Coda has a fully equipped battery system manufacturing and integration facility in Monrovia, Calif., which among other assets will be marketed through the ABC process to interested parties."
GTM Research senior storage analyst Ravi Manghani said, "Coda Energy couldn't secure financing to scale up and compete with the likes of Tesla, Stem and Green Charge Networks," adding, "Something not well understood in the industry is that the cost to acquire C&I customers is high, with sales cycles lasting a year or longer. So, it's challenging to grow a pipeline without access to financing, when existing projects under development are not bringing in revenue."
Third time's a charm?
Manghani adds, "The announcement has too much reliance on SGIP," noting, "CODA's second relegation to bankruptcy was largely due to the failure to expand its pipeline beyond SGIP projects, which, as the industry knows, are becoming more competitive and harder to win. I hope this acquisition can result in Coda being able to benefit from Exergonix's capabilities to bring its energy storage products to multiple markets. Exergonix itself is not a heavy hitter in the storage space with only a few projects under its belt, but it is building a coalition of partners in Draker, Neighborhood Power and Verd2Go to complement energy storage with energy management, solar and EV-charging markets."