A rare successful (?) exit for a VC-funded greentech company.
Digital advertising firm Red Ventures just acquired Plano, Texas-based Choose Energy for "less than $100 million," according to Dan Primack's Pro Rata newsletter. (We'd like to know just how much "less than $100 million" is, and we're asking around.)
Choose Energy is a retail energy choice platform that allows residential and commercial electricity and natural-gas customers (in non-regulated states) to select a cheaper or cleaner energy provider. Jerry Dyess is CEO and founded the firm in 2006.
The retail-choice company claims a sophisticated online strategy on its website: "Historically, retail energy companies have gained customers via acquisition channels like door-to-door, telemarketing and multi-level marketing networks. More recently, the greater volume of customers embracing retail energy choice has come from online and digital channels -- creating a more competitive landscape and a more informed customer."
As GTM has reported, the number of residential customers choosing their electricity source has grown considerably in recent years, and today there are more than 16 million accounts with competitive suppliers. Thirteen states and the District of Columbia are deregulated to allow consumers to select their electricity supplier.
Katie Tweed points out: "Whether the regulated or deregulated construct is the best approach depends in part on what the state is trying to accomplish. In New York, it's about creating an energy market at the distribution level. In Hawaii, it's about integrating very high levels of renewable energy."
The CEO of acquirer Red Ventures, Ric Elias, founded the digital marketing firm in 2000. Based in North Carolina, the firm specializes in "performance-based digital marketing." (Elias was a survivor of Flight 1549, the "miracle on the Hudson," and has given a TED talk recounting his experience.)
Primack notes that private equity firms Silver Lake and General Atlantic invested $250 million into Red Ventures in 2015. Last year, Red Ventures closed an $800 million credit facility, evidently to finance purchases like Choose Energy.
Choose Energy raised at least $25.7 million from investors, including Kleiner Perkins, BlueScape Resources, Sandler Capital and NGEN Partners. KP's investment in Choose came from the VC firm’s $1 billion green investment fund. We've asked KPCB partner David Mount for a comment and are awaiting his response.
Choose claims that its website has "helped over 100,000 consumers and business owners shop for and switch energy suppliers and plans." The company was profitable with “double-digit millions” in revenue, according to a Primack source.
Quick -- name six cleantech-funded VC-startup acquisition exits that would qualify as successful. "Successful" in this context means that in addition to a VC-quality multiple, the acquired firm continued to provide value after the exit was complete.
I'll start the list.
- Zep Solar (acquired by SolarCity)
- Nest (acquired by Google)
You can finish the list in the comment section.
By Eric Wesoff for Greentechmedia.com