David Energy’s Series A

Co-authored by Rebecca Kaden

Energy is a real-time commodities market.  The grid must balance supply and demand minute-by-minute to avoid blackouts or surges.  Big changes in supply (wind stops blowing) or demand (everyone turns on their AC) threaten to throw the system off balance.

Historically, the grid has only worked in one direction.  Energy would flow from generators along regional transmission lines and into local distribution grids, eventually reaching a business or home.  Customers could not choose who generated or sold their power – most were bound to a local utility.  

Tomorrow’s grid looks more like the internet – a set of loosely coupled nodes in two-way communication.  As the energy transition accelerates, big changes are occurring in tandem –

  • The grid is decarbonizing. Renewables are the cheapest and fastest growing source of energy but many do not provide baseload power.  Prices increase when renewables are offline (sun not shining, wind not blowing).
  • The grid is decentralizing.  Energy generation and storage are occurring at end nodes of the network, not just at central hubs.  Energy can be stored on-site (batteries, EVs) when it’s cheap and used later when prices are spiking.
  • The grid is digitizing.  Software has never been more relevant to manage the feedback loops between baseload power, intermittent renewables, and distributed energy resources (EVs, rooftop solar, etc).
  • The grid is becoming deregulated.  In more than 26 states, customers are no longer bound to purchase energy from their local utility.  Instead, customers can buy energy from suppliers who procure electricity in wholesale markets.

Taken together, these trends mean customers are seeing market-driven rates that “more accurately reflect the true cost of electricity”.  Customers are also exposed to more real-time price volatility than ever before.  In these circumstances, the rewards for intelligently managing power usage have never been higher.  

David Energy is a Retail Electricity Provider (REP) that manages price volatility to save customers money.  When energy prices are low, David Energy helps customers use energy (e.g., pre-cool) and store energy (e.g., charge their EV).  When prices are high, David helps customers curtail their energy use (e.g., turn off their AC) or sell energy back to the grid (e.g., from rooftop solar). Most customers can save at least 10% on their bill.

In some sectors, the savings are much higher.  Energy-intensive businesses like fitness clubs and quick-service restaurants are especially sensitive to changes in power prices.  Through the David Energy platform, these chains can manage their bill across dozens of locations and save thousands in annual operating expenses.

Industry incumbents have struggled to adapt to today’s grid.  When prices change, their only option is controlling supply.  This means flexing up/down last-minute, carbon-intensive generation (e.g., a coal-fired plant) or buying additional energy on the spot market.  Price volatility has become a major cost-driver for these businesses.

David Energy works in the opposite direction – turning up/down demand instead of supply. This type of control is only possible through a device-level network of distributed energy resources (HVAC, EVs, water heaters, etc.).  Like many networks, the platform improves with density.  More customers means more device-level data and points of control to shape demand.  Aggregating demand also helps David procure wholesale supply more competitively, lowering costs across the customer base.

Today, David Energy is live in New York State with commercial customers who have large and growing real-estate footprints.  Soon, they will be in deregulated markets across the US serving both retail customers and commercial landlords.  David’s device-level aggregation will allow them to build the most dense demand-response network in the US and shape large pockets of demand to ease strain on the grid and save their customers money. 

David Energy has built a team of experienced practitioners.  James McGinniss (CEO) is a mechanical engineer by training who won Tesla’s SpaceX Hyperloop Competition.  He deeply knows the dynamics of the nation’s most complicated energy markets.  Ahmed Salman (CTO) has spent more than 15 years across companies like Siemens and Schneider Electric.  Chaitu Parikh (Head of Retail) brings two decades of experience including as CFO, COO, and President of MXenergy (sold to Constellation) and as COO at Crius Energy (sold to Vistra Energy).

David Energy calls NYC home and so too does its investor base.  USV is thrilled to co-lead David Energy’s Series A alongside Keyframe Capital with participation from existing investors Equal Ventures, Box Group, and a host of others who are deeply knowledgeable about today’s evolving energy model.  As a city deep in the throes of building decarbonization, it’s exciting to see David’s impact close to home and expanding to markets around the country.