Ethical Electric, a competitive renewable energy supplier focused on Mid-Atlantic and Northeastern states, has pulled in $11 million to expand its reach in deregulated markets.
The funding round, led by impact investor and political strategist Matthew Palevsky, will be used to leverage new customers for Ethical Electric's unique brand of power sales.
Co-founded by former MoveOn.org campaigner Tom Matzzie and climate strategist Richard Graves, the company blends political activism with a competitive power sales strategy to sell renewables while supporting progressive political causes.
On the power procurement side, Ethical Electric operates like any other similar company. It enters power purchase agreements with local developers (currently all wind) and pays fees for accessing grid infrastructure. Ethical Electric then sells 100 percent renewable electricity to customers and bills them through the utility -- charging roughly the same price for wind electricity as the current fossil-based mix on the grid.
The difference is that Ethical Electric uses traditional political organizing tactics to target and retain customers.
Ethical Electric uses a database called Megavolt that combines consumer information, energy market data and marketing strategies to build prospecting lists. This "microtargeting" model was pioneered by political campaigners, who use it to figure out the best voters to approach when canvassing.
The company also sets aside 1 percent of its sales for progressive causes, allowing customers to choose where the money goes. By working with big organizations like Credo Mobile, Daily Kos, Rebuild the Dream and the Sierra Club, Ethical Electric is able to find new customers interested in its overt political strategy.
"We think there's a massive group of people interested in clean energy that goes beyond the ones who are shopping for it. This is a way to engage people on the issues where they are," said Matzzie in a July interview with Greentech Media.
Those tactics have raised the interest of like-minded financiers.
The company just closed an $11 million Series A round from a small group of foundations, family offices and individuals -- adding to a $2.4 million seed round from Northwest Energy Angels in 2012. Only Matthew Palevsky was publicly announced as an investor.
“The Ethical Electric team is applying their experience building large-scale progressive movements to disrupt incumbents in the energy sector,” said Palevsky in a statement.
Matzzie said he and Graves were able to leverage previous relationships in the political organizing world to raise the money -- avoiding venture capital that might weaken their control of the company.
In July of last year, Ethical Electric had 4,000 customers. Although Matzzie wasn't ready to release new figures on customers, he did say the company now has "tens of thousands" of people signed up. A large portion of them are coming as leads through partnerships with big environmental and political groups.
Although the top energy companies spend gobs of money to influence politics, Ethical Electric is the first to push its political objectives on a grassroots level. The company may only be a blip compared to the largest influencers, but it's starting to catch the attention of liberal investors who see renewables as a platform for deeper engagement on their political and social issues.