Clean-energy entrepreneurs sometimes bemoan Silicon Valley’s preference for funding software startups instead of the tough tech needed to tackle problems like climate change and crumbling infrastructure. But sometimes software really does the trick.
Amrit Robbins found that out the hard way. The Stanford alum founded and led Axiom Exergy, an East Bay startup that raised at least $12.5 million to equip grocery stores with thermal batteries. Those devices use electricity to precool so they can take over refrigeration duties during hours when electricity gets more expensive, saving money for the store.
If a power outage hits, thermal storage can keep food cool for several hours, preventing food spoilage. It was a specific instance of a central theme in the clean energy industry: helping a paying customer while making the broader grid system cleaner and more efficient.
That company shut down last year after five years, hit by the upheavals of 2020 and the realization that the hardware business wasn’t going to scale. But Robbins managed to rally his employees, buy back the intellectual property and relaunch as Axiom Cloud.
The new startup delivers most of the benefits of the predecessor, but with a pure software product that operates existing refrigeration systems more efficiently.
“We’re able to deliver [return on investment] that’s spectacularly better,” Robbins told Greentech Media this week.
On Tuesday, Axiom Cloud revealed a $1.1 million seed round led by Ulu Ventures and joined by Powerhouse Ventures, Lorimer Ventures and Correlation Ventures. The software is already live in dozens of grocery stores, including Whole Foods locations and three other major grocery chains in the U.S. and Canada, Robbins said.
The newly raised funds will go to delivering the service to hundreds of stores by the end of the year, he added.
Hard times for hardware
Axiom Exergy needed a bridge round of funding in early 2020. By March, the extent of the COVID-19 crisis was becoming apparent. Plummeting oil prices forced spending cutbacks for energy companies such as Shell, which had been a major investor.
On top of those new challenges, Axiom’s hardware business was proving more difficult to scale than it sounded on paper.
“We just weren’t moving as quickly as we had hoped was going to be possible,” Robbins said.
Axiom Exergy tried to pivot to software late in the game, but it was structurally committed to the hardware play. Major backers including Shell and Evergy Ventures based their commitments on the risk profiles and returns of a hardware company, not a software company. The startup had committed to research and development investments, equipment purchases and even insurance products needed for adapting thermal storage tanks to interface with commercial refrigeration machinery. Those once-necessary investments weighed down the enterprise, complicating a switch to software as the primary business.
“We tried everything we possibly could to keep it alive, but there just wasn’t a clear path forward,” Robbins said.
Robbins shut down the company in June. But he and the team thought there was still potential in the software they had developed to accompany the thermal batteries. Instead of using a tank of saline solution to store energy, a grocery store can use software to precool its freezers to dodge utility demand charges. Axiom Exergy had also been working on a preventive maintenance product using artificial intelligence to flag refrigeration performance issues that could be precursors to costly equipment breakdowns.
The Axiom alums decided to rally around those software capabilities with a new company, dubbed Axiom Cloud. They bought back their old intellectual property and customer relationships from Turntide Technologies, an electric motor company that acquired them after Axiom Exergy shut down. Turntide bought into the concept and invested in the new company, Robbins said.
New beginnings
The new strategy offers subscription-based apps that extract data from existing commercial refrigeration equipment and then use cloud computing and AI to put that information to use.
The Virtual Battery product precools systems to shed load during peak windows, avoiding expensive utility charges. Crucially, the service doesn’t just provide interesting charts for an energy manager to look at — it operates the system more efficiently on its own.
“Our output is actually taking actions autonomously,” Robbins said. “Our customer isn’t interested in buying a to-do list.”
Another product, Virtual Technician, compares refrigeration performance against a digital model of the ideal, in order to identify maintenance needs before a failure occurs.
For installation, Axiom hires a local contractor to connect a small computer box to the customer’s existing equipment. Axiom’s device only interacts with refrigeration, Robbins noted, so it remains independent from the grocery store’s other IT systems.
The upshot is that Axiom can deliver customers bill savings without the cost or complexity of integrating bulky new machinery into refrigeration facilities.
If the customer base continues to grow, Axiom’s services will shift grocery store power consumption away from the peak hours that drive disproportionate grid costs and carbon emissions. The flexibility they provide is valuable in its own right, Powerhouse Ventures Managing Partner Emily Kirsch noted in a blog post on Tuesday.
“With Virtual Battery, Axiom Cloud has the potential to bring hundreds of megawatts of load flexibility to the grid without requiring new energy storage hardware,” she said.
Source: Greentech Media
