Tendril, the company that’s built up a portfolio of software and services to help utilities manage their residential customers, has acquired FirstFuel Software to expand its offerings to utilities' commercial and industrial customers as well.
This is the third acquisition for Tendril since last year’s major investment, led by private equity firm Rubicon Technology Partners, meant to give the Boulder, Colo.-based company the capital to expand its scope of business for its utility clients.
In January, Tendril acquired EEme, an energy disaggregation technology startup, and last month it acquired EnergySavvy, a startup with about 45 utilities and public agencies using its residential customer engagement software.
But while those acquisitions were firmly in Tendril’s residential wheelhouse, FirstFuel is exclusively focused on helping utilities serve their business customers, CEO Adrian Tuck noted in a Monday interview.
“We were solving one part of the solution for our [utility] customers in the resi market,” Tuck said. “But the non-residential portion of the market was something we hadn’t addressed.”
Since its 2009 founding FirstFuel has raised about $44 million from venture capital investors Next World Capital, Battery Ventures, Rockport Capital, and Nth Power, as well as European investors E.ON and Electranova Capital, a fund sponsored by EDF Group in France.
In the U.S. market, it’s considered a market leader in utility business customer engagement, with deployments at more than 35 utilities, including Pacific Gas & Electric, Southern California Edison, Alliant Energy, Baltimore Gas & Electric, AEP and Southern Company.
Business customers make up more than half of a utility’s load and revenue, and are the focus of a majority of utility programs and products. There are big differences between the approaches a utility takes to energy efficiency and demand-side management programs aimed at its commercial and industrial (C&I) customers, compared to its residential customers, Tuck said.
First of all, C&I customers are much more varied than even the most dissimilar residential customers, he noted. There’s a huge difference between the energy usage patterns and demand-side management needs of an office building, a hospital, a chain restaurant, or a factory, for instance.
Second, the biggest commercial and industrial energy users have their own utility account managers, whether they’re large individual users like factories, or corporations with lots of chain locations, he noted. “There’s a mix of reaching out directly to the building owner or occupant directly, but also arming of account managers, utility employees, with the tools needed.”
FirstFuel has built a range of capabilities into its software to meet these needs, CEO Swapnil Shah noted in an email. The company’s core capabilities are built on analyzing massive amounts of energy meter data collected from utilities, along with weather data, building location information and characteristics, and other site-specific information, to create “virtual energy audits” that can cover hundreds of millions of square feet of property.
But in its years working with utilities, the company has learned from and incorporated a range of customer service improvements into its core platform, Shah wrote.
“The software takes utility data, like billing and meter data, and turns it into insights varying from the type of business to what the right rate plan should be, to what kinds of EE/DSM, DER or electrification solutions are right for cost or carbon reduction. FirstFuel delivers those insights as integrated software, or via APIs and widgets, directly into existing customer systems like customer portals or CRM systems.”
FirstFuel’s customers have reported some impressive results from this approach, including 25 percent increases in business customer satisfaction ratings, doublings of digital enrollment and engagement figures, and improved conversion rates and yields for energy efficiency, demand-side management and electrification or fuel-switching programs, he noted.
And in the world of energy efficiency, where one of the key barriers to progress is simply getting customers to participate, expanding the scope and accelerating the pace of projects can be as important a metric of success as how much energy is saved per project, he noted. “We've seen examples in the commercial sector of doubled conversion rates using a better, more informed customer experience. In other words, imagine if every EE/DSM sales/marketing dollar used to identify, inform and convert customers had twice the yield.”
Tuck noted that FirstFuel has a longstanding strategic partnership with Oracle’s Opower, a rival to Tendril in the residential utility customer management platform space.
“Obvously we’ll respect relationships with Oracle, and make sure that those customers aren’t left hanging,” he said.