Venture Houston sparks 6 predictions in energy corporate venturing for 2019

Crystal ball

Energy corporate venture capital expected to trend toward more renewables, data tech, and energy storage investments. Getty Images

In November, Houston played host to a meeting of the corporate venture minds at Venture Houston. Global Corporate Venturing and Global University Venturing put on the two-day conference and organized panels, showcases, and chats from energy and investment professionals from leading companies.

Following the Houston conference, Leif Capital published "Corporate Venturing and the Future of Energy."

"What better place to reflect on what happened in energy corporate venture capital in 2018 and look ahead to what might happen in 2019 than Houston, the world's capital of energy," the report reads.

In it, Tom Whitehouse, CEO of Leif Capital, and Kaloyan Andonov, reporter at Global Corporate Ventures, look ahead to what the energy corporate venturing trends will be in 2019. Here's what they identified in the report.

1. Data-driven technologies will be a hot commodity
Focusing on organizational efficiency, corporate venture capitalists will continue to look to invest in data-tracking technologies. Where there's data reporting, there's lower cost and increased safety. One example of a company that's already had some success is Maana, a "knowledge platform that accelerates knowledge discovery to increase profitability for industrial and oil and gas companies," the report says. The company received GCV's award for Energy-tech Corporate Venture Capital Investment of the Year.

2. The United States will continue to follow Europe's low carbon lead
Despite the government's passive approach to climate change and reinvigorated respect for coal, U.S. energy companies will invest in low carbon and renewable resources. "Indeed, historians may look back at Chevron's and American Electric Power's November participation in Chargepoint's $280m Series H round as the point at which mainstream US oil & gas accepted that the future of mobility was electric," according to the report. Attendees at the November Venture Houston event saw a fair amount of accomplished low carbon companies. The resurgence of renewables is due to advancements in technology.

3. Rethinking rechargeable tools
A big issue in robotics development, according to Houston Mechatronics CTO Nick Radford, is efficient batteries — and he and the robot industry isn't alone. Across the automotive, mobile phones, and utilities industries, companies are in want for better power storage tools. But not only better — cheaper would be nice as well. "Battery cost went down from $1,000 to about $200 perKw/h from 2010 to 2016 and thus, made intermittent renewables more viable, both operationally and commercially," the report notes.

4. Off-grid energy storage investing
Industrial and domestic energy consumers alike are trending toward "grid defection" — a mix of on-site renewable resources and energy storage that allows off-grid energy consumption. This practice will result investments in batteries and a new breed cleaner modular power generators. For example, a California company, EtaGen, that creates a linear generator raised $83 million in January 2018 from the likes of American Electric Power, Centrica Innovations, and Statoil Energy Ventures, the report says.

5. Upstream corporate venturing is now lower priority
In recent years, upstream has been the belle of the ball when it comes to corporate venturing, but the report notes that this isn't the case for 2019. "This creates an interesting vacuum that is being filled by financial VCs," the experts say in the report. "We predict that upstream venturing will be increasingly led by specialist US financial VCs, who will be happy to see their CVC counterparts busy with other opportunities. Leaving them with some rich pickings perhaps."

6. More collaborations and few exits
Corporate investors have only recently increased investment activity over the past two years, so exits are a bit far off. "Emerging energy businesses take more time to mature and the investment horizon in energy is longer than in, say, software," the report reads. Instead, expect internal joint ventures and collaborations between entities.

Griddy, lead by CEO Greg Craig, is making a surge in Texas by disrupting the state's outdated electricity plan. Courtesy of Griddy

Electricity startup puts its Houston customers on the grid

Power Player

In 2015, Greg Craig looked into Texas' wholesale energy industry and a light bulb went on over his head. He realized that the way consumers were delivered power was opaque and misleading. The electricity industry is one of the few areas that the tech boom hasn't yet infiltrated. That is, until Griddy came along, launching in Houston in the spring of 2017.

"Technology has changed and bettered everything in life," says Craig, Griddy CEO and co-founder, who compares Griddy to likes of Amazon, Uber, and Costco. "Our thesis was, 'what if we could build a tech platform that would connect the home directly to the grid?'"

Instead of profiting off hidden fees and fixed prices, Griddy provides customers wholesale electricity prices and promises to be open, honest, and transparent. Rather than charging inflated rates, the company only makes a profit from the $9.99 monthly membership fees. Everything else is at cost — no margins, hidden fees, or break fees. This all translates to savings of up to 30 percent, says Craig, who co-founded Griddy with executive chairman, Nick Bain.

Electricity of the future
Griddy customers are connected directly to their smart meter which records electricity use and communicates this information to the home owner's electricity supplier

Customers can download and use the Griddy app and get a by-the-second update of the wholesale price so that they know when the price spikes and it's time to turn off unnecessary energy suckers. The app also offers 36-hour forecast to give consumers an idea of what the wholesale price will be at a specific time.

The mobile aspect of Griddy is a large draw as consumers increasingly use their phones and do everything online or in-app. From the transparent prices to the mobile app, Griddy's features have been well received by millennials, a generation drawn to companies that stand out and are committed to strong corporate values that put the customer first and offer low prices.

This month, Griddy launched a new app, Griddy Guest, that allows non-members a chance to test the benefits of Griddy before becoming a member. "We understand people may be a little cautious of switching to a new type of energy provider so we created Griddy Guest to allow people to access the perks and track their potential savings before completely switching over to becoming a Griddy member," says Craig.

Consumers can use the app for free, view the current wholesale price of electricity and projected prices using your zip code, and receive an estimate of savings from using Griddy in comparison to the average rate for their location, house type, and weather zone.

"We're trying to be disruptive and innovative and do things no one's ever done," Craig tells InnovationMap. "No one's ever done 'we'll tell you exactly what we make,' no one's ever done 'here's real time wholesale,' no one's ever provided mobile app information like this by the second, and now no one's ever done 'be our guest, be our guest, put our service to the test', and now we've done it."

What's next?
Griddy, which is only in Texas, is continuing to spread into deregulated markets with sights set on the East Coast in the first half of 2019, to be closely followed by an international move to the United Kingdom, Australia, and Japan. The company is also pursuing machine-learning artificial intelligence to handle optimal time for power use, a technology that would automatically adjust power use for consumers during price spikes. This type of feature would be connected directly to households, closely monitoring the price of electricity to save consumers even more money.

Overall, Griddy has made a large footprint with its launch in Texas and is currently in 39 different cities within the state. The company hopes to continue to turn consumers to wholesale electricity over traditional overpriced fixed energy plans to disrupt the industry and save individuals money.

Feel the surge

  

Griddy users can enable push notifications that alert them of surge pricing so they can turn off any large appliances to avoid excess charges.

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Houston VC funding surged in 2024, fueled by major Q4 activity

by the numbers

The venture capital haul for Houston-area startups jumped 23 percent from 2023 to 2024, according to the latest PitchBook-NVCA Venture Monitor.

The fundraising total for startups in the region climbed from $1.49 billion in 2023 to $1.83 billion in 2024, PitchBook-NVCA Venture Monitor data shows.

Roughly half of the 2024 sum, $914.3 million, came in the fourth quarter. By comparison, Houston-area startups collected $291.3 million in VC during the fourth quarter of 2023.

Among the Houston-area startups contributing to the impressive VC total in the fourth quarter of 2024 was geothermal energy startup Fervo Energy. PitchBook attributes $634 million in fourth-quarter VC to Fervo, with fulfillment services company Cart.com at $50 million, and chemical manufacturing platform Mstack and superconducting wire manufacturer MetOx International at $40 million each.

Across the country, VC deals total $209 billion in 2024, compared with $162.2 billion in 2023. Nearly half (46 percent) of all VC funding in North America last year went to AI startups, PitchBook says. PitchBook’s lead VC analyst for the U.S., Kyle Stanford, says that AI “continues to be the story of the market.”

PitchBook forecasts a “moderately positive” 2025 for venture capital in the U.S.

“That does not mean that challenges are gone. Flat and down rounds will likely continue at higher paces than the market is accustomed to. More companies will likely shut down or fall out of the venture funding cycle,” says PitchBook. “However, both of those expectations are holdovers from 2021.”

Houston space company lands latest NASA deal to advance lunar logistics

To The Moon

Houston-based space exploration, infrastructure, and services company Intuitive Machines has secured about $2.5 million from NASA to study challenges related to carrying cargo on the company’s lunar lander and hauling cargo on the moon. The lander will be used for NASA’s Artemis missions to the moon and eventually to Mars.

“Intuitive Machines has been methodically working on executing lunar delivery, data transmission, and infrastructure service missions, making us uniquely positioned to provide strategies and concepts that may shape lunar logistics and mobility solutions for the Artemis generation,” Intuitive Machines CEO Steve Altemus says in a news release.

“We look forward to bringing our proven expertise together to deliver innovative solutions that establish capabilities on the [moon] and place deeper exploration within reach.”

Intuitive Machines will soon launch its lunar lander on a SpaceX Falcon 9 rocket to deliver NASA technology and science projects, along with commercial payloads, to the moon’s Mons Mouton plateau. Lift-off will happen at NASA’s Kennedy Space Center in Florida within a launch window that starts in late February. It’ll be the lander’s second trip to the moon.

In September, Intuitive Machines landed a deal with NASA that could be worth more than $4.8 billion.

Under the contract, Intuitive Machines will supply communication and navigation services for missions in the “near space” region, which extends from the earth’s surface to beyond the moon.

The five-year deal includes an option to add five years to the contract. The initial round of NASA funding runs through September 2029.

Play it back: Houston home tech startup begins 2025 with fresh funding

HOUSTON INNOVATORS PODCAST EPISODE 272

One of the dozen or so Houston startups kicking of the new year with fresh funding is SmartAC.com, a company that's designed a platform that enables contractors in the HVAC and plumbing industries to monitor, manage, and optimize their maintenance memberships through advanced sensors, AI-driven diagnostics, and proactive alerts.

Last month, the SmartAC.com raised a follow-on round with support from local investor Mercury to continue growth and expansion of the product, which has evolved on many ways since the company launched in 2020, emerging from stealth with $10 million raised in a series A. In a May 2023 interview for the Houston Innovators Podcast, Founder and CEO Josh Teekell explained how he embraced the power of a pivot.

The company's sensors can monitor all aspects of air conditioning units and report back any issues, meaning homeowners have quicker and less costly repairs. While SmartAC.com started with providing the service and tech to homeowners directly, Teekell says he's had a greater interest in working with plumbers and HVAC companies who then deploy the technology to their customers.

"It became quite evident that homeowners don't care about air conditioning really at all until their system breaks," Teekell says on the show. "The technology is really built around giving those contractors as another way to gain a customer relationship and keep it."

Revisit the podcast episode below where Teekell talks about SmartAC.com's last raise.

SmartAC.com's previous round in 2023 — a $22 million series B — was used grow its team that goes out to deploy the technology and train the contractors on the platform.

"We've been very fortunate to get some of the biggest names in Houston on our cap table," Teekell says in the May 2023 conversation. "Since we're raising a bunch of money locally, everyone understands what a pain air conditioning can be."

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