Verdane partners with global clean tech and energy management software leader Cleanwatts
Verdane, the European specialist growth equity investor, through its impact fund Idun, has invested in Cleanwatts, an energy software company on a mission to accelerate global energy decarbonisation and alleviate energy poverty. The company, which grew year-on-year revenues by 65% in 2021 and expects 2022 revenue growth of more than 200%, offers energy management solutions that help local communities unlock the benefits of optimized renewable energy consumption, generation, storage, trading, and balancing. The partnership, in which Verdane is set to invest up to EUR25m, will draw on Verdane’s deep expertise of scaling SaaS companies, international network and in-house team of operating specialists.
Cleanwatts is an energy management software company that deploys renewable energy communities (RECs) in countries with advanced legal frameworks and policies that enable the activation of local energy markets. The company operates in Italy, Portugal, Spain, and the United States, with plans to expand further into Europe and Asia. REC members can include residents, commercial and industrial businesses, municipal buildings, schools, hospitals, and universities that collectively contribute to the clean energy transition while advancing energy efficiency, lowering electricity bills, and creating jobs within the local economy. By supporting citizen and commercial participation through internet of things enabled energy load management, energy communities can also help provide flexibility and local grid resiliency through demand-response and storage.
Cleanwatts is in the process of building more than 80 energy communities, several of which are already operational. Currently, the company manages and controls two terawatt hours of energy – or the equivalent of over 500,000 households’ annual consumption – and runs over 15MW in aggregated rooftop solar PV capacity through Cleanwatts™ OS, its modular operating system designed to manage energy communities. Cleanwatts REC members can lower their average energy costs by up to 60%.
In keeping with the company’s goal of removing friction and complexity from the launch of RECs, Cleanwatts complements its digital offering with zero upfront investment requirements for the adoption of distributed energy resources, including PV solar capacity, energy storage systems, EV charging infrastructure and electrification of heating and cooling for the built environment.
Cleanwatts plans to allocate Verdane’s investment primarily to accelerate and expand its commercial presence in target markets, and to further develop Cleanwatts™ OS to anticipate evolving needs in local energy markets. Together with Verdane, the company will also assess M&A possibilities if and where accretive to the Cleanwatts value proposition. To meet growing market demand for its services, the company expects to grow headcount by 50% over next 6-12 months, adding 40+ resources to its current team of 70 located in Europe and the US.
Verdane’s investment coupled with Cleanwatts’ unique and innovative capabilities, will enable Cleanwatts to tackle the world’s energy poverty problem, which is defined as the “lack of access to sustainable modern energy services and products,” by the World Economic Forum. Energy poverty affected between 50 and 125 million people across Europe in 2020 – a figure that has increased dramatically in the wake of Russia’s invasion of Ukraine and record-high inflation.
Michael Pinto, CEO and founder of Cleanwatts, commented: “Mitigating the rising cost of energy and supply constraints, while responding to an increasing demand for electricity and meeting decarbonization targets is an enormous global challenge. Fortunately, digitally enabled renewable energy communities now represent both an effective and efficient solution to address these problems. A wide range of viable technologies and regulatory frameworks are finally in place for our society to reframe its relationship with energy and pave the way for a cleaner, fairer, and more sustainable future. We are proud to partner with Verdane to address the rapid paradigm shift towards a more efficient and resilient decentralized energy network.”
Bjarne Kveim Lie, Co-Founder & Managing Partner at Verdane, said: “To ensure rapid decarbonisation, Europe – and the world – needs solutions to support deployment of distributed solar at massive scale. That requires companies that can offer strong value propositions to all stakeholders, and we believe Cleanwatt’s unique technology platform and commercial offering addresses this challenge in an impressive way. We look forward to contribute with our extensive experience scaling SaaS businesses and the capabilities of our Verdane Elevate operating team to sustain, and further accelerate, the Company’s already impressive growth trajectory.”
Verdane Idun is classified as “Article 9” under the European Union’s Finance Disclosure Regulation and closed in January 2022 at its hard cap of € 300 million, over its target fund size of € 225 million. Idun makes investments focused on driving impact in three clusters: energy transition; sustainable consumption; and resilient communities. Previous investments include Auntie, a digital provider of workplace wellbeing services; in Spond, a digital enabler of grassroot sports and physical health; and EVA Global, a managed services provider supporting the global shift to electric vehicles. To date, Verdane has invested in over 30 sustainable society businesses.
 Assuming an average consumption of 2.5 and 5MWh per year