Sydney-based startup Wattwatchers has secured a $2 million funding injection to add to the $2 million it raised earlier this year, as part of a Series A funding round to expand its energy monitoring technology and save consumers more on their power bills.
The latest funding was led by the Clean Energy Finance Corporation (CEFC), which manages the Australian government’s Clean Energy Innovation Fund, and adds to the $2 million in funding Wattwatchers secured in April this year from the Southern Cross Renewable Energy Venture Capital Fund (REVC). REVC is a venture capital fund established under the Renewable Energy Venture Capital Fund Program spearheaded by ARENA, the government’s renewable energy agency.
Wattwatchers produces a compact, retrofittable energy management device that runs off Wi-Fi or 3G technology to deliver energy data from a user’s house to the cloud in real-time. This allows consumers to see what is driving power consumption in their households, and they can then switch off power-hungry devices and save on their electricity bills.
Wattwatchers was founded in 2007, and for 10 years was self-funded through “sweat equity” and sales, after founders Chris Bean and Jon Keeble encountered difficulty when trying to secure external investment, according to managing director Gavin Dietz.
Dietz says the key to completing this Series A funding round after so long was the team’s determination “not to give up” on the startup’s vision.
“The founders before I came on board [a year ago] had tried to raise capital unsuccessfully. You can’t give up,” he says.
Dietz also attributes the success of this raise to the startup winning the Australian Technologies Competition New Energy Award last year, an experience he said he was “skeptical about going in to” but which turned out to be “really useful in giving us a lot of contacts and exposure”.
The funds will be used to grow Wattwatchers’ sales and engineering team, to add to their current team of eight, and to “scale up” production runs to lower the cost of the product, which Dietz says is currently available in 10,000 – 15,000 homes across Australia.
The startup is also looking to consolidate its foothold in Australia, which Dietz says is “one of the best markets in the world” for the adoption of energy-efficient technologies, before launching its offerings internationally in the UK and US markets in coming years.
“Australia is leading the world in my opinion in this [energy efficiency technology]. There are 1.7 million houses in Australia with solar; I think there’s only 1 million houses in the US with solar power,” Dietz says.
“Consumers have Stockholm syndrome” in relation to energy prices
While new startups, such as Symbiot Technology, are increasingly attempting to disrupt the energy sector, the space has been historically dominated by the big industry players. This means energy consumers have had limited access to data.
“The energy space is one of the hardest areas for startups to work,” says Dietz.
“I think one of the reasons we [Wattwatchers] are really important is because the one thing that the energy space lacks is data.
“We produce data [with our device]. To produce data with electricity you need to install a device — there’s no [other] magical way to do that” he says.
Dietz says innovation in the energy sector is stifled because “the data isn’t free flowing” like it is in the fintech sector. It’s a gap that Wattwatchers aims to fill with its energy-monitoring, data-driven technology.
“I truly believe in the energy space we haven’t seen half the innovation we should [because] the data isn’t free flowing. Fintech does amazing things because that [financial] data has filtered to the top and become real time — energy still has a long way to go,” he says.
Dietz says there is “no doubt” that startups are still looking to “completely try to disrupt and innovate how energy is done” in Australia, but points to fundamental structural challenges that currently exist in the energy sector that are inhibiting startups from entering the space.
These challenges include the fact that the “big players don’t want to be disrupted” and so will try to edge out startup competition from the market; the lack of data infrastructure available for startups to leverage; and because “consumers have Stockholm syndrome” in their relationships with energy providers, which Dietz says leads them to believe a quarterly bill that estimates the cost of their next electricity is “the best [deal] they can get”.
In spite of these challenges, Dietz maintains that the future remains bright for budding startups in the sector.
“When all those three things start breaking down massively, there will be a huge change in the energy space,” he says.