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EnergyDeck Information Memorandum 2014
EnergyDeck Information Memorandum 2014Version 1.3, 18-Jan-2014
One Platform to Enable Everyone to Save Energy
Executive Summary
IntroductionEnergyDeck is an award-winning, web-based energy analytics and engagement platform focused on the real estate management space. It is powerful yet easy to use, combines big data analytics and benchmarking with innovative crowdsourcing, and facilitates sharing of key information among typically disconnected stakeholders.
EnergyDeck occupies a unique position in the rapidly expanding energy management market. Traditional energy management solutions use an enterprise software sales approach, are often complex and measure success in tens of customer acquisitions. With its specific combination of capabilities, low-cost pricing and network effects, EnergyDeck sets out to disrupt the industry and enable building owners, managers and tenants at mass market level to benefit from energy and resource efficiency.
Investment opportunityWe are looking to identify potential investors for our second seed funding round which is 1
planned for early 2014 with a total size of around £500K (potential to increase to up to £1M). The funds will be used to strengthen our product positioning in the real estate sector and lay the foundation for scaling the platform. On the market side, we plan to ramp up sales, partnership and marketing activities to significantly grow customers and revenue.
In summary, our investor proposition consists of the following:1. Experienced and well respected management team2. Large addressable global market opportunity3. Simple, scalable and flexible business model4. First commercial success and strong growth path5. Highly developed and deployed product with strong USP6. Ideally positioned to benefit from major industry trends
1 Given the limited size of this round, we are mainly targeting private investors eligible for UK EIS (Enterprise Investment Scheme with benefits including 30% income tax relief, capital gains and loss relief). We anticipate closing in March / April 2014 to allow investors to optimise their tax benefits with respect to tax years.
For more information contact [email protected] P. 1/12
EnergyDeck Information Memorandum 2014
Product and target marketEnergyDeck makes it easy to track, manage and reduce energy and resource consumption by providing:
● A single, easy to use platform for all building, consumption and environmental data which can be shared with different user groups incl. landlords, managers & tenants
● A wide range of data acquisition options - from utility bills to smart meters/sensors● Automatic analysis and benchmarking of consumption data to help users better
understand the performance of their buildings and identify savings potential● The possibility to track savings measures and learn about best practices based on
anonymised projects submitted by EnergyDeck users2
We target three segments with strong multiplier effects:● Asset owners / commercial landlords and building managers● Large housing associations / condominial landlords● Resellers such as energy brokers and sustainability service providers
Progress made so farIn 2013 we completed our management team which is composed of experienced leaders from Google, CBRE, Opower and Lloyds Banking Group. In addition, we signed 20+ paying customers with properties located in the UK and Europe. Key reference customers now on EnergyDeck include a global Top 10 real estate firm (for which we are managing the metering and monitoring programme across their European portfolio of prestigious commercial properties) as well as a major UK housing association implementing the largest residential monitoring project in the UK to date.
Major industry trends and opportunitiesIt is estimated that up to 30% of consumption is wasted in commercial buildings , costing 3
tenants in the UK alone billions of pounds each year . We are now witnessing the onset of 4
major trends which will alter the face of the industry over the next few years. These include smart meter roll-outs and the transition of Internet of Things (IoT) enabled devices into the mainstream at global level, increasing regulatory pressure around energy efficiency performance in EU and US markets, and last but not least continuously rising energy prices.
By leveraging these trends and taking advantage of a highly fragmented competitive context for energy management software - where the number one competitor at scale essentially remains Microsoft Excel - EnergyDeck is set to revolutionise the energy management space with a unique platform that enables everyone to save energy.
2 EnergyDeck is unique in the energy management space in that it uses anonymised data from all users of the platform to generate building performance benchmarks and datasheets for potential savings projects3Source: Carbon Trust4www.onlyelevenpercent.com/innovation-in-building-energy-efficiency-or-how-the-uk-could-save-8-billion-per-annum/
For more information contact [email protected] P. 2/12
EnergyDeck Information Memorandum 2014
Experienced & Well Respected Management Team
The EnergyDeck management team has a proven track record across technology, energy and real estate, with backgrounds at leading organisations including Google, Opower, CBRE, Carbon Trust, Lloyds Banking Group and others.
Benjamin KottCEO & Founder
Bruno GirinCTO
● 7 years in energy efficiency, renewables,clean energy policy & 7 years experiencein telecoms, media, internet
● Most recently Head of Green BusinessOps & Energy Advocacy at Google
● Previously Booz Allen, Sorgenia, Airbus● Member of Sustainability Advisory
Board of the BBC
● 15+ years enterprise solutions architectfor banks, service providers, assetmanagers
● Most recently solutions architect at LloydsBanking Group
● Previously BNP Paribas Real Estate, BTGlobal Services / NHS, CSC / Royal MailGroup, RBS
Nicholas MasonDirector of Business Development
Mike CharalambousDirector of Marketing
● 5 years experience in real estate,sustainability, CO2 accounting/reporting
● Most recently Senior Energy &Sustainability Consultant at CBRE, wherekey clients included Sainsbury’s, CBREGlobal Investors, Nomura Bank
● Previously Westminster City Council
● 15+ years marketing tech, cleantech,energy efficiency
● Most recently Director of Marketing EMEAfor Opower
● Previously Carbon Trust, Oracle, SiebelSoftware
On the technical side, we are closely working with a very experienced and cost effective web development team based in Kiev, which has been building the platform from the ground up and are fully integrated with the London team.
In addition, we are in regular contact with a range of advisors and mentors including experts from industry, real estate and finance. We are currently vetting a number of candidates for our advisory board.
For more information contact [email protected] P. 3/12
EnergyDeck Information Memorandum 2014
Large Addressable Global Market
EnergyDeck’s primary marketspace is the energy/carbon management software sector, estimated to be worth $6bn by 2017. Via future product developments we can also participate in the $104bn opportunity of energy and resource efficient equipment sales .5
Our focus is on enabling key stakeholders in the built environment to capture major savings opportunities in their buildings by making it possible to import, access, analyse, report and share relevant data as well as reducing risks associated with regulation, reporting and investing in energy efficiency.
We target three key segments through a combination of direct sales and partnerships:
While large commercial real estate owners / operators on the one hand and social housing landlords on the other can be seen as operating in opposite ends of the market, there are significant synergies for us as both segments care strongly about energy costs, operational efficiency and tenant engagement, among others.
5 source: Pike Research
For more information contact [email protected] P. 4/12
EnergyDeck Information Memorandum 2014
Commercial real estate "pain points" Social housing "pain points"
● Energy and carbon reporting requirements
(eg CRC, GRESB, CDP etc)
● Minimum energy performance regulation
(20% of current building stock becomes
unlettable from 2018 due to energy
efficiency rating of ‘F’ or lower)
● Rising energy prices, leading to tenant
pressure around operating costs & charges
● Competitive pressure to differentiate and
provide better client service
● Operational efficiency - management of
contracts, consumption, reporting, billing
● Impact assessment of savings measures
● Rising energy prices, leading to pressure on
rent payments by tenants
● Increase in fuel poverty among tenants
(50% or more already fuel poor), leading to
negative impact on rent payment and
estate as a whole
● Operational efficiency - management of
contracts, consumption, reporting, billing
● Impact assessment of savings measures
● Regulatory pressure in the form of carbon
reduction targets (especially UK - 20% by
2020 and 80% by 2050 over 1990 baseline)
From a product point of view, the EnergyDeck platform is versatile enough to service both sectors with minor differences in functionality and UI. One key development aim which we will be working on in 2014 is to radically simplify the interface for individual residential tenants, with the objective to show only the most essential information in an actionable format. A similar simplified interface has already been requested to engage employees and other non-expert stakeholders in the commercial real estate space.
Regarding distribution, we believe we are able to service these three segments even with limited resources by targeting the leaders in the space as direct customers and partners.
1. Commercial (Office/Retail) and Social Housing Associations.In both of these sectors we target the top and middle layers of the “building management stack” (landlords, investors and asset managers) through direct sales
2. Energy Brokers, Large Energy Consultancies and Equipment Suppliers.For channel partnerships, we target organisations that can act as intermediaries to engage with SMEs and other mid-sized organisations; we provide partners with an advanced and innovative customer engagement platform that allows them to sell value-added services and reduce customer churn
While our key geographical focus in 2014 will remain on the UK, we are working with UKTI to develop a broader internationalisation strategy and make EnergyDeck available in a number of additional markets. The platform itself is already accessible at international level through www.energydeck.com and can be used by anyone, anywhere. For full country deployment however, the user interface would need to be translated into the respective language and at least a basic level of local support provided directly or through partners.
For more information contact [email protected] P. 5/12
EnergyDeck Information Memorandum 2014
Simple, Scalable & Flexible Business Model
EnergyDeck operates a hybrid pricing approach consisting of:
● a free tier for basic users such as residents or small organisations with certain limitations in terms of meter types (for data input) and functionality
● a subscription model for larger users based on number of meters (data feeds) used
The rationale for offering a free tier is that it allows prospective users to sign up directly and start exploring key aspects of the platform independently; it also provides the basis for community programmes. A highly successful example of such a programme is the West of England Carbon Challenge. Initiated and managed by Forum for the Future, today more than 100 organisations participate in the programme, of which 80 are on EnergyDeck including the likes of Astra Zeneca, BBC and Cap Gemini. While we offer the platform for free to the participating organisations (who are able to set up 1 building with up to 5 meters each), it has proven useful in gaining exposure to the broader market and potential customers.
For customers - which is how we define paying users - there are three existing revenue streams with plans to develop further ones in the longer term:
● Direct SalesThis revenue stream is based on charging an up-front, tiered annual subscription fee based solely on the number and type of meters used (with decreasing average costs per meter as the number of meters bought increases). On request, we can provide customers with on-boarding and helpdesk support for a fee.
● Reseller PartnersThe reseller partner revenue stream is based in principle on the same tiered pricing structure as the direct sales model. EnergyDeck charges the partner for the aggregate number of meters purchased for all their end users, effectively treating the partner as a single customer and offering them the benefits of scale across their entire user base. It is also possible for the partner to whitelabel the offering.
● ConsultancyAn issue that can prevent organisations from using EnergyDeck to its full extent is the inability to acquire energy (and other consumption) data in a cost effective way. In response to this, we can offer large clients a consultancy service to support them around smart metering strategy development, meter technology and supplier selection and integration with EnergyDeck.
We do not intend to focus our offering on consultancy activities as this would limit scalability. Rather, we can provide this service to selected clients with significant upside potential regarding subscriptions to EnergyDeck and/or development of expertise and contacts in the industry.
For more information contact [email protected] P. 6/12
EnergyDeck Information Memorandum 2014
Currently EnergyDeck is earning revenue from the direct sales and consultancy streams to commercial real estate and social housing customers. We have several reseller partnership agreements in negotiation in the UK and Europe that are likely to launch in early 2014.
In the longer term we plan to develop additional revenue streams. These could include an integrated supplier marketplace that provides the opportunity for referral fees from suppliers of energy efficiency products and services (the performance of which can be independently tracked and validated through the consumption data held and managed by EnergyDeck). The level of utility of this marketplace to the user initially depends on achieving sufficient scale in terms of buildings, meter data and users, but will over time significantly enhance the value of our offering.
First Commercial Success and Strong Growth Path
2013 achievements
2013 was a successful year for EnergyDeck in terms of customer and revenue milestones:
Customers 20 paying customers including a global Top 10 real estate developer andinvestor), DAC Beachcroft, Ogilvy, East Midlands Homes, Leeds MetUniversity, Skanska Infrastructure Development UK, UK-GBC
Revenue £200K annual run-rate in top-line revenue from a standing start and strong pipeline across all target sectors to take us to a 10x net revenue level in 2014
Operations Increased management team from 1.5 to 4 full time staff;Software development team increased from 2 to 4 FTE;Monthly burn rate approaching £20K
Partners Five strategic partners including meter vendors, brokers, consultancies
For more information contact [email protected] P. 7/12
EnergyDeck Information Memorandum 2014
Awards During 2013 we won a number of awards and received plaudits from majorgreen/tech press; of particular note is Green Corporate Energy 2013where EnergyDeck was voted “Idea Idol” out of nearly 50 submissionsfrom major industry players and a live pitch in front of more than 200sustainability and energy professionals.
2014 plan
Our 2014 objective is to grow sales and pipeline while laying the foundations for scale:
Revenuetargets
£1M net revenue in 2014 run-rate
Customerpipeline
Currently including two of the Top 5 managing agents in the UK, aleading global carpet tile manufacturer, a leading global electronics andentertainment company, two leading infrastructure and energy servicesfirms, several major energy brokers with large numbers of SME clients
Operations Plan to increase UK team to 5-6 FTE, add 1-2 business developmentstaff across new markets, increase developers to 5 plus UX support;Expect to increase monthly burn rate to £30-50K (depending on sales,major projects to be managed and funding)
Partnerdevelopment
Fine-tune product and partnership proposition to make EnergyDeckavailable to a significant number of distribution partners / resellers inorder to achieve fast and low-cost scale in the UK and other markets
For more information contact [email protected] P. 8/12
EnergyDeck Information Memorandum 2014
Main challenges to overcome towards scale
We are in a good position to start scaling EnergyDeck in 2014 thanks to the way in which we can address the challenges inherent to this industry:
● Budget pressure / affordability of software solutions○ Low cost, simple and transparent pricing based on a single metric (meters)
makes platform accessible to a very wide market vs. competing products● Distribution to achieve scale
○ Strong multiplier effects through target direct customers and partners (organisations managing hundreds to thousands of properties / sites / meters)
○ Largely self-serve approach that requires no or minimal help desk support, and in combination with an online payment system (ETA 2014) will allow efficient onboarding of large numbers of SMEs and even residential users
● Metering hardware costs○ Working directly with a range of metering suppliers and installers to provide
the best integrated package to the customer at the lowest cost○ Providing options to all users to use low frequency energy data, and making it
easy to submit readings or utility bills manually (incl. email and mobile)○ Mid to long term leveraging smart meter rollout and Internet of Things
which will provide for low/no cost metering options at scale● Value add / utility to end customer vs. competition today
○ Powerful & easy to use product capabilities that are unique at this price point○ Unique aggregation of database with consumption benchmarks and savings
projects aim addition to community sharing capabilities● Long term success vs. competition
○ Continuous product improvement with specific sector focus and agile development approach
○ Network effects - increasing value provided to users the more people use it
Highly Developed & Deployed Product with Strong USP
In most cases, “traditional” sustainability tools focus on providing expensive, customised reporting capabilities for environmental and technical managers and can cost up to tens of thousands of pounds per building per year. EnergyDeck instead addresses the key barriers of energy efficiency in the built environment by solving the landlord-tenant engagement issue in a highly cost effective way. We achieve this through powerful community and sharing capabilities that utilise a combination of role-based reports, advanced analytics, big data and behavioural science in order to drive insights and action across the entire building stack.
For more information contact [email protected] P. 9/12
EnergyDeck Information Memorandum 2014
Thanks to our agile development approach and the utilisation of the latest web technologies, we have in a relatively short timeframe developed a product that is today largely “feature-complete” in terms of traditional energy management software capabilities, while providing a range of unique benefits to users (for context, development 6
work on EnergyDeck started in January 2012 with initially two developers; the platform was publicly launched in March 2012 and has been continuously improved since then).
Our 2014 product roadmap is built around extending our specific capabilities in the real estate space and enabling full scalability of the platform. Key deliverables include:
● Mapping of complex buildings and commercial landlord-tenant relationships
● Customer management functionality for distribution partners, e.g. energy brokers
● Implementation of platform concept to provide interfaces to external systems and allow third parties to independently develop specific apps that run on EnergyDeck
We will continue to provide on-going improvements and updates to the overall
6 See http://www.energydeck.com/tour/overview/ for a full overview of available features
For more information contact [email protected] P. 10/12
EnergyDeck Information Memorandum 2014
functionality and user experience in order to maintain our established lead in this respect.
Ideally Positioned to Benefit from Major Industry Trends
Energy management industry trendsThe energy management industry today is in some respects similar to the computer and internet industry of about 15 years ago. While most providers of energy management solutions now offer cloud-based versions of their products, these are often expensive, require extensive customisation and implementation work, and remain difficult to use for most people due to outdated and clunky user interfaces. In other words, many existing offerings are not dissimilar to the monolithic enterprise software solutions of the past.
We believe this industry is ripe for disruption in ways similar to e.g. the CRM (customer relationship management) software space at the turn of the millennium. The arrival of companies like Salesforce.com offering cloud-based, low-cost and customer focused products completely changed this space over the years to come (Salesforce is now the CRM market leader with in excess of $3bn annual revenue).
Hardware evolution and IoTOn the hardware side, the fact that “smart” meters for commercial use can still cost several hundred pounds and that meter operators practically own the data (charging collection and management fees for every single meter feed) further compounds the “legacy” aspect of today’s energy management industry.
This is set to change with the increasing availability of inexpensive sensors and meters that have recently entered the marketplace. In addition, more and more devices - from simple meters to data concentrators - are able to directly connect to the internet as part of the overall IoT trend, without the need for costly meter data management servers or additional fees for SIM card based data transfer.
Over the next three to five years we expect these trends to have a significant impact on the industry as a whole, leading ultimately to a commoditisation of the hardware side of energy monitoring and an explosion in terms of available consumption data and related environmental metrics. This will in turn shift the focus to energy data management software which needs to be scalable, easy to operate by a broad range of users, low cost and provide a broad range of functionality.
Competitive market contextThe market for energy management is extremely fragmented. While there are more than 100 energy management software solutions by some count , even the leading providers 7
7 Source: Verdantix
For more information contact [email protected] P. 11/12
EnergyDeck Information Memorandum 2014
have rarely more than 50-100 customers, which they service in a traditional way by charging high fees for implementation, customisation and maintenance.
Furthermore, most existing solutions remain difficult to use and unable to cope with large amounts of (high frequency) data. In part for these reasons, the most ubiquitous tool in the industry is still Microsoft Excel which comes with its own set of drawbacks as spreadsheets don’t offer advanced analytics, collaborative sharing and flexible access, to name but a few.
Energy pricesIn the UK, prices for gas and electricity have doubled in the past 6 to 10 years respectively . 8
Further price increases can be expected in major global economies over the next years. The resulting cost pressure will inevitably increase the focus on energy efficiency and in turn energy management, both in the commercial as well as the residential space where more and more households are being pushed into fuel poverty (currently 5M UK households are in fuel poverty, with one in every three households expected to be fuel poor by 2017 ).9
EnergyDeck: one platform to enable everyone to save energyWe see EnergyDeck as ideally positioned to benefit from the gap between spreadsheets and traditional software offerings in the competitive market context, and capable of fully leveraging the overall industry trends. We expect these trends to result in a seismic shift in the energy management industry over the next few years that is similar to what we have witnessed in the enterprise software space over the past decade. EnergyDeck is built from the ground up to make maximum use of the latest web technologies and with full scalability in mind. Our mission is to leverage our intrinsic advantages to become the leading energy management platform in the industry and enable everyone to save energy.
Disclaimer
Prospective Investors should not regard the contents of this Information Memorandum as constituting advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers before contemplating any investment or transaction.
EnergyDeck Ltd believes that the factual content contained in this document is accurate and the statements of their opinions herein are reasonably held, and does not accept responsibility to any recipient of this Information Memorandum for inaccuracies in factual representation or for any consequences to such persons of placing reliance upon statements of their opinion.
No responsibility or liability is accepted for any loss or damage howsoever arising that you may suffer as a result of this Information Memorandum and any and all responsibility and liability is expressly disclaimed by EnergyDeck Ltd and its directors, shareholders, partners, affiliates, employees, advisers or agents.
EnergyDeck Ltd reserves the right to update this Information Memorandum from time to time.
8 http://www.castlecover.co.uk/historic-home-utility-prices/9 http://www.cse.org.uk/work/tackling-fuel-poverty
For more information contact [email protected] P. 12/12
