Year: 2021

Digital transformation has been one of the biggest catchphrases of the past year, with many an organization forced to reckon with aging IT, a lack of digital strategy, or simply the challenges of growth after being faced with newly-remote workforces, customers doing everything online and other tech demands.

Now, a startup called Upstack that has built a platform to help those businesses evaluate how to grapple with those next steps — including planning and costing out different options and scenarios, and then ultimately buying solutions — is announcing financing to do some growth of its own.

The New York startup has picked up funding of $50 million, money that it will be using to continue building out its platform and expanding its services business.

The funding is coming from Berkshire Partners, and it’s being described as an “initial investment”. The firm, which makes private equity and late-stage growth investments, typically puts between $100 million and $1 billion in its portfolio companies so this could end up as a bigger number, especially when you consider the size of the market that Upstack is tackling: the cloud and internet infrastructure brokerage industry generates annual revenues “in excess of $70 billion,” the company estimates.

We’re asking about the valuation, but PitchBook notes that the median valuation in its deals is around $211 million. Upstack had previously raised around $35 million.

Upstack today already provides tools to large enterprises, government organizations, and smaller businesses to compare offerings and plan out pricing for different scenarios covering a range of IT areas, including private, public and hybrid cloud deployments; data center investments; network connectivity; business continuity and mobile services, and the plan is to bring in more categories to the mix, including unified communications and security.

Notably, Upstack itself is profitable and names a lot of customers that themselves are tech companies — they include Cisco, Accenture, cloud storage company Backblaze, Riverbed and Lumen — a mark of how digital transformation and planning for it are not necessarily a core competency even of digital businesses, but especially those that are not technology companies. It says it has helped complete over 3,700 IT projects across 1,000 engagements to date.

“Upstack was founded to bring enterprise-grade advisory services to businesses of all sizes,” said Christopher Trapp, founder and CEO, in a statement. “Berkshire’s expertise in the data center, connectivity and managed services sectors aligns well with our commitment to enabling and empowering a world-class ecosystem of technology solutions advisors with a platform that delivers higher value to their customers.”

The core of the Upstack’s proposition is a platform that system integrators, or advisors, plus end users themselves, can use to design and compare pricing for different services and solutions. This is an unsung but critical aspect of the ecosystem: We love to hear and write about all the interesting enterprise technology that is being developed, but the truth of the matter is that buying and using that tech is never just a simple click on a “buy” button.

Even for smaller organizations, buying tech can be a hugely time-consuming task. It involves evaluating different companies and what they have to offer — which can differ widely in the same category, and gets more complex when you start to compare different technological approaches to the same problem.

It also includes the task of designing solutions to fit one’s particular network. And finally, there are the calculations that need to be made to determine the real cost of services once implemented in an organization. It also gives users the ability to present their work, which also forms a critical part of the evaluating and decision-making process. When you think about all of this, it’s no wonder that so many organizations have opted to follow the “if it ain’t broke, don’t fix it” school of digital strategy.

As technology has evolved, the concept of digital transformation itself has become more complicated, making tools like Upstack’s more in demand both by companies and the people they hire to do this work for them. Upstack also employs a group of about 15 advisors — consultants — who also provide insight and guidance in the procurement process, and it seems some of the funding will also be used to invest in expanding that team.

(Incidentally, the model of balancing technology with human experts is one used by other enterprise startups that are built around the premise of helping businesses procure technology: BlueVoyant, a security startup that has built a platform to help businesses manage and use different security services, also retains advisors who are experts in that field.)

The advisors are part of the business model: Upstack’s customers can either pay Upstack a consulting fee to work with its advisors, or Upstack receives a commission from suppliers that a company ends up using, having evaluated and selected them via the Upstack platform.

The company competes with traditional systems integrators and consultants, but it seems that the fact that it has built a tech platform that some of its competitors also use is one reason why it’s caught the eye of investors, and also seen strong growth.

Indeed, when you consider the breadth of services that a company might use within their infrastructure — whether it’s software to run sales or marketing, or AI to run a recommendation for products on a site, or business intelligence or RPA — it will be interesting to see how and if Upstack considers deeper moves into these areas.

“Upstack has quickly become a leader in a large, rapidly growing and highly fragmented market,” said Josh Johnson, principal at Berkshire Partners, in a statement. “Our experience has reinforced the importance of the agent channel to enterprises designing and procuring digital infrastructure. Upstack’s platform accelerates this digital transformation by helping its advisors better serve their enterprise customers. We look forward to supporting Upstack’s continued growth through M&A and further investment in the platform.”

Outschool, a marketplace providing small-group, virtual after-school activities for children has raised a $75 million Series C led by Coatue and Tiger Global Management. TechCrunch first learned of the round from sources familiar with the transaction; the company confirmed the deal to TechCrunch later today.

The new funding values Outschool’s at $1.3 billion, around 4 times higher than its roughly $320 million valuation set less than a year ago.

To date, Outschool has raised $130 million in venture capital to date, inclusive of its new round.

The company’s valuation growth curve is steep for any startup, let alone an edtech concern that saw the majority of its growth during the pandemic. But while CEO and co-founder Amir Nathoo says his company’s new valuation is partially a reflection of today’s fundraising frenzy, he thinks revenue sustainability is a key factor in his company’s recent fundraise.

The new unicorn’s core product is after school classes for entertainment or supplemental studies, on an ongoing or one-off basis. As the company has grown, ongoing classes have grown from 10% of its business to 50% of its business, implying that the startup is generating more reliable revenue over time.

The change from one-off classes to enduring engagements could be good for the company and its students. On the former, recurring revenue is music to investor ears. On the latter, students need repetition to develop close relationships with a course and a group. Ongoing classes about debate or a weekly zombie dance class makes for a stickier experience.

Nathoo says everyone always asks what the most popular classes are, but said it continues to change since its main clientele – kids – have evolving favorites. One week it might be math, the other it might be minecraft and architecture.

Its changing revenue profile helped Outschool generate more than $100 million in bookings in 2020, compared to $6 million in 2019 and just $500,000 in 2017. Nathoo declined to share the company’s expectations for 2021 beyond “projecting to grow aggressively.”

Outschool reached brief positive cash flow last year as a result of massive growth in bookings, but Nathoo shared that that has since changed.

“My goal is to always stay within touching distance of profit,” he said. “But given the fast change in the market, it makes sense to invest aggressively into opportunities that will make sense in the long-term.”

What’s next

Nathoo expects to grow Outschool’s staff from 110 people to 200 by the end of the year, with a specific focus on international growth. In 2020, Outschool launched in Canada, New Zealand, Australia and the UK, so hiring will continue there and elsewhere.

On the flip side, Outschool isn’t  teachers at the same clip it was at the height of the pandemic in the United States. When the pandemic started, Outschool had 1,000 teachers on its platform. Within months, Outschool grew to host 10,000 teachers, a screening process that the founder explained was resource-heavy but vital. Outschool makes more money if teachers join the platform full-time: teachers pocket 70% of the price they set for classes, while Outschool gets the other 30% of income. But, Nathoo views the platform as more of a supplement to traditional education. Instead of scaling revenue by convincing teachers to come on full-time, the CEO is growing by adding more part-time teachers to the platform.

Similar to how Airbnb created a host endowment fund to share its returns with the people who made its platform work, Outschool has dedicated 2% of its fundraise to creating a similar program to reward teachers on its platform in the event of liquidity.

One of Outschool’s most ambitious goals is, ironically, to go in school. While some startups have found success selling to schools amid the pandemic, district sales cycles and tight budgets continue to be a difficult challenge for scaling purposes. Still, the startup wants to make its way into students’ lives through contracts with schools and employers, which could help low income families access the platform. Nathoo says enterprise sales is a small part of its business, but the strategy began just last year as part of COVID-19 response. It is currently piloting its B2B offering with a number of schools.

Outschool will also consider acquiring early-stage startups focused on direct-to-consumer learning in international markets. While no acquisitions have been made by the startup to date, consolidation in the edtech sector broadly is heating up.

Nathoo stressed that Outschool’s continued growth, even as schools reopen, has de-risked the company from post-pandemic worries.

“There’s going to be a big spike of in-person activities because everyone is going to want to do that at once,” he said. “But then we’re going to settle at some more even distribution because the future of education is hybrid.”

He added that Outschool’s ethos around online learning hasn’t changed since conception. The company has never seen opportunity in the for-credit, subject-matter digital education sector, and instead has focused more on supplemental ways to support students after school.

“That’s the piece of the education system that is underserved and that was missing,” he said. “The advantages of online learning will remain in the convenience, the cost, and the variety of what you can get that isn’t always available locally.”

When Hampus Jakobsson, Heidi Lindvall, and Joel Larsson, all well-known players in the European venture ecosystem, began talking about their new firm Pale Blue Dot, they began by looking at the problems with venture capital.

For the three entrepreneurs and investors, whose resumes included co-founding companies and accelerators like The Astonishing Tribe (Jakobsson) and Fast Track Malmö (Lindvall and Larsson) and working as a venture partner at BlueYard Capital (Jakobsson again), the problems were clear.

Their first thesis was that all investment funds should be impact funds, and be taking into account ways to effect positive change; their second thesis was that since all funds should be impact funds, what would be their point of differentiation — that is, where could they provide the most impact.

The three young investors hit on climate change as the core mission and ran with it.

As it was closing on €53 million ($63.3 million) last year, the firm also made its first investments in Phytoform, a London headquartered company creating new crops using computational biology and synbio; Patch, a San Francisco-based carbon-offsetting platform that finances both traditional and frontier “carbon sequestration” methods; and 20tree.ai, an Amsterdam-based startup, using machine learning and satellite data to understand trees to lower the risk of forest fires and power outages.

Now they’ve raised another €34 million and seven more investments on their path to doing between 30 and 35 deals.

These investments primarily focus on Europe and include Veat, a European vegetarian prepared meal company; Madefrom, a still-in-stealth company angling to make everyday products more sustainable; HackYourCloset, a clothing rental company leveraging fast fashion to avoid landfilling clothes; Hier, a fresh food delivery service; Cirplus, a marketplace for recycled plastics trading; and Overstory, which aims to prevent wildfires by giving utilities a view into vegetation around their assets. 

The team expects to be primarily focused on Europe, with a few opportunistic investments in the U.S., and intends to invest in companies that are looking to change systems rather than directly affect consumer behavior. For instance, a Pale Blue Dot investment likely wouldn’t include e-commerce filters for more sustainable shopping, but potentially could include investments in sustainable consumer products companies.

The size of the firm’s commitments will range up to €1 million and will look to commit to a lot of investments. That’s by design, said Jakobsson. “Climate is so many different fields that we didn’t want to do 50% of the fund in food or 50% of the fund in materials,” he said. Also, the founders know their skillsets, which are primarily helping early stage entrepreneurs scale and making the right connections to other investors that can add value.

“In every deal we’ve gotten in co-investors that add particular, amazing, value while we still try to be the shepherds and managers and sherpas,” Jakobsson said. “We’re the ones that are going to protect the founder from the hell-rain of investor opinions.”

Another point of differentiation for the firm are its limited partners. Jakobsson said they rejected capital from oil companies in favor of founders and investors from the tech community that could add value. These include Prima Materia, the investment vehicle for Spotify founder Daniel Ek; the founders of Supercell, Zendesk, TransferWise and DeliveryHero are also backing the firm. So too, is Albert Wenger, a managing partner at Union Square Ventures.

The goal, simply, is to be the best early stage climate fund in Europe.

“We want to be the European climate fund,” Lindvall said. “This is where we can make most of the difference.” 

Connected Cannabis Co. was founded in 2009 and has since grown to become a leading cultivator of designer cannabis strains. Today, the company announced $30 million in debt and equity financing. This comes after the company raised a $25 million Series A in 2019. The new round was led by existing investors including Navy Capital and One Tower Group. Emerald Park Capital, an affiliate of Bryant Park Capital, and Presidio View Capital also participated.

Currently, Connected Cannabis Co. operates cultivation and retail facilities in California and Arizona. With the additional financing, it intends to expand elsewhere. The company says it plans on focusing on states with robust cannabis cultures and promising outlook for growth such as Nevada and Michigan.

“We’re thrilled to bring Emerald Park Capital and Presidio into the Connected family and welcome back our long-term partners that have supported our company’s mission from the very beginning,” said Sam Ghods, CEO of Connected. “We are steadfast in our development of new, best-in-class genetics and our production of top-quality flower that has resulted in impressive growth and unwavering customer loyalty. That same commitment and quality that we’ve prided ourselves on from day one will stay with us as we enter additional states. We look forward to bringing our true product and brand to consumers in new markets – that is our highest priority every time we look at expansion.”

Connected Cannabis is among a growing number of cannabis-focused companies amassing a war chest ahead of expanding outside of select regions. As more states in the United States legalize cannabis, more companies are exploring expansion options. Strict federal regulations often slow the process and make it cumbersome for cultivators like Connected to operate in different states, which often have different regulations and federal law prohibits interstate commerce.

Growing cannabis is easy. The plant is hardy is hearty and forgiving. Growing cannabis at scale is anything but hearty and forgiving, which is why Connected turned to additional funding to fuel its national growth.

The sheer volume of people migrating to Austin from all over the country, but particularly from the San Francisco Bay Area, has been making headlines for a while now.

One result of this continued migration is a steady surge in housing prices due to increased demand and low inventory that dropped to nearly zero earlier this year. Now, Homebound, a Santa Rosa, California-based tech-enabled homebuilding startup, is entering the Austin market with the goal of helping ease some of the pain felt in the city by offering an alternative to buying existing homes.

Homebound has raised about $73 million over the years from the likes of Google Ventures, Fifth Wall, Khosla, Sound Ventures, Atomic and Thrive Capital. It raised a $35 million Series B last April and then closed on a $20 million convertible note late last year. CEO Nikki Pechet and Atomic managing partner Jack Abraham founded the company in 2017 after Abraham lost his home to wildfires.

Essentially serving as a virtual general contractor, Homebound combines technology and a network for “vetted” and licensed building “experts” to manage the new home construction from the design phase to completion. The startup has developed tools to track and manage hundreds of unique tasks associated with building a home.

Up until this point, Homebound has been focused on helping homeowners navigate the challenges and complexities of rebuilding after wildfires in California. But this month, Homebound will be expanding to Austin, its first non-disaster market, with the goal of taking learnings from those rebuilds and applying the same “streamlined, tech-enabled building process” to make custom homebuilding an option for local homeowners.

I talked with Homebound’s CEO and co-founder, Nikki Pechet, to learn more.

With Homebound, she said, the company is out to serve as a “next gen” homebuilder to make it possible “for anyone, anywhere to build a home.”

Austin’s housing market is definitely overheated, with homes going 10-30% above asking in some cases (I should know, I live here).

“Homeowners have been reaching out to us from across the country asking us to come to their market,” Pechet said. “We’re already seeing Austin grow faster than any of our other markets did in their early days. It’s going to be a huge market for us.”

It’s a model Pechet envisions replicating in other cities with similar housing supply issues such as Miami, Tampa, Raleigh and Charlotte.

“This is just the start,” Pechet said. “We’re taking the platform to markets across the country to help exactly with this issue.”

The company starts by helping a potential homeowner identify land they want to build on, or help them find a lot among the inventory Homebound has already built up. From there, it can help with everything from architectural plans to design to actual construction via its platform. Homebound offers a set of plans for people to choose from, with varying levels of customization.

Building costs for a typical single-family home in the Austin area will start around $300,000 depending on the size, complexity of house, lot size and location. That does not include land cost. Some people are opting to build second units on existing properties.

“In most cases, people can build a new home for less than they can pay for an existing home just because of the dynamics,” Pechet said.

TechCrunch is embarking on a major new project to survey European founders and investors in cities outside the major European capitals.

Over the next few weeks, we will ask entrepreneurs in these cities to talk about their ecosystems, in their own words. For this survey we are interested in startup hubs in England and Wales. (Scotland will follow, and Northern Ireland is here).

So this is your chance to put your cities on the Techcrunch Map!

We’re like to hear from founders and investors. We are particularly interested in hearing from diverse founders and investors. These are our humble suggestions for the cities we’d most like to hear from:

Birmingham
Brighton
Bristol & Bath
Cambridge
Cardiff
Liverpool
Manchester
Newcastle
Oxford
Reading and Thames valley
York

If you are a tech startup founder or investor in one of the above cities please fill out the survey form here.

The more founders/investors we hear from in a particular city, the more likely it is that city will be featured in TechCrunch.

This is the follow-up to the huge survey of investors (see also below) we’ve done over the last six or more months, largely in capital cities.

These formed part of a broader series of surveys we’re doing regularly for ExtraCrunch, our subscription service that unpacks key issues for startups and investors.

In the first wave of surveys, the cities we wrote about were largely capitals. You can see them listed here.

This time, we will be surveying founders and investors in Europe’s other cities to capture how European hubs are growing, from the perspective of the people on the ground.

We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and generally how your city will evolve.

We leave submissions mostly unedited and are generally looking for at least one or two paragraphs in answers to the questions.

So if you are a tech startup founder or investor in one of these cities please fill out our survey form here.

Thank you for participating. If you have questions you can email mike@techcrunch.com and/or reply on Twitter to @mikebutcher.

Offering a respite from processed foods for the richest 20% of Americans, Simple Feast has landed on U.S. shores with a mission to expand its presence on the back of $45 million in financing from investors.

The European startup is looking to take a page from the shouty LIVEKINDLY Collective playbook and take on the U.S. market with gourmet prepared meals that come with a gourmet price tag and a mission to make Americans eat less meat by proffering more tasty and delicious vegetarian options.

It’s a strategy that netted LIVEKINDLY Collective’s business $335 million in a recent round of funding, making it one of the most well capitalized new entrants in the vegetarian food brand category.

“There’s a general health problem that’s coming mostly from what we put in our mouth,” said Jakob Jønck, the company’s co-founder and chief executive.

For folks in the U.S. who can afford it, Simple Feast is offering packaged meal kits with menus developed by chefs from some of the world’s highest end restaurants — place like French Laundry in California or Noma in Norway, where meals can run roughly $350 per-person.

A selection of three prepared meals for two-to-three people will run customers around $98 per-week and for a family of four or five that number jumps to $159 per-week.

Simple Feast’s foray into the US market represents just a small portion of the company’s total offerings. In the Nordic region the company offers about 30 different products all targeting people who want to reduce the amount of meat they eat.

Investors certainly love the company’s offering, because, as Jønck says, the products probably represent the highest margin in the meal kit category.

Those financiers include firms like the European venture capitalists Balderton Capital and Kinnevik, and New York-based 14W.

As for the company’s customers, they’re mostly moms with kids whose income puts them in the top 20% of the population. While they may be far more wealthy than the hoi polloi, Jønck said they still suffer from exposure to the worst aspects of America’s industrial food machine — highly processed foods that are causing an explosion in chronic health conditions like diabetes and obesity.

Data from places like the Rand Institute indicate that in America, the burden of insufficient nutrition and the chronic conditions that stem from that are disproportionately affecting low income and middle income families.

Health is a problem in the U.S. with $794 billion per year estimated to be lost in productivity between 2016 and 2030. An article from HealthAffairs cited research from the Joint Center for Political and Economic Studies estimates stating that health inequities and premature death cost the US economy $309.3 billion a year.

However, these costs are primarily born by the poorest Americans, particularly minorities. “People of color face higher rates of diabetes, obesity, stroke, heart disease, and cancer than whites,” the HealthAffairs article says.

Simple Feast is working to correct that, says Jønck. The company’s European packaged prepared meals available in retail stores cost around $15, he said, and the company will offer salaries far above the minimum wage in the U.S. to do its part in ameliorating some of the wealth disparity in the country.

“This is a general play on an industry that needs to change for the ground up. This system needs to change,” Jønck said. 

 

Slice, a startup that helps independent pizzerias build an online business, has raised another $40 million in Series D funding.

The round was led by Cross Creek, with participation from KKR, GGV Capital and Primary Ventures, as well as Twitter’s former CEO Dick Costolo and former COO Adam Bain (through their firm 01 Advisors).

Last spring, the startup announced a $43 million Series C. Why not raise more money this time? Founder and CEO Ilir Sela described this as “a quick round” to get Costolo and Bain  on-board as investors. He also suggested there may be additional fundraising conversations in the not-too-distant future.

“Slice has emerged as the leader in powering these types of small businesses that have been serving our communities for decades,” Bain said in a statement. “We look forward to working with Ilir and the incredible team at Slice to marry our significant operating and business-scaling experience with Slice’s focus on enabling economic growth in this category.”

Slice has built a mobile app and website for ordering from local pizzerias, but it also provides tools so they can build their own websites, run marketing campaigns, improve their search engine optimization and more. Slice only charges those pizzerias a fixed $2.25 per order, and last fall it even removed the fee for orders under $10.

The company continues to expand its products and services with the recent launch of a point-of-sale system for pizzerias called Slice Register, as well as a cross-pizzeria loyalty program called Slice Rewards.

Some of this might sound a bit niche — a POS system, just for pizzerias? — but when I brought this up with Sela, he replied, “I love it when people say that, because then they continue to stay out of the way.”

Slice already has 15,000 pizzerias on the platform, with plans to increase that number to 20,000 at the end of the year. He added that although the current addressable market consists of 57,000 independent and small chain U.S. shops, with the Slice Accelerate program (where the startup provides select pizzerias with $15,000 worth of technology and services) “there could be 100,000 in the U.S.”

“With Accelerate, we’re taking inefficient pizza shops who are predominantly offline and helping them realize their vision for their brand,” he continued. That might mean improving an existing location, or it might mean launching new ones. In fact, he said the new program has already helped to revamp Pizza Mia in Staten Island and will work with Crown Heights-based Billy’s Pizza & Pasta to open a second location.

“I definitely think that long term, there’s a big question whether our very unique model could be applied to other verticals,” he said. “I think it can, but it would be a mistake to move into those verticals today, because of the opportunity that it exists in pizza.

Wire, the end-to-end encrypted messaging app and service, has raised a $21 million Series B funding round led by UVC Partners. As the company said a couple of years ago, the company is focusing on the enterprise market more than ever.

While Wire started as a consumer app, it never managed to attract hundreds of millions of customers like other messaging apps. That doesn’t mean that Wire is a bad product.

The app lets you securely talk with other people using text messages, photos, videos and voice messages. You can also start a video call and send files with other users. Wire supports both one-to-one conversations as well as rooms.

Everything is end-to-end encrypted by default, which means that the company can’t decrypt your conversations, can’t hand them over to a court or can’t expose your conversations to a potential hacker. You can also view the source code on GitHub.

In 2019, the company told TechCrunch that it would open a holding company in the U.S. to raise some funding. The idea was to double down on enterprise customers to find a clear path toward profitability. And this focus hasn’t changed since then.

“If I think back on the evolution of the business – three years ago we had zero revenue and zero customers – whereas today we’re announcing a B round and we have clearly established a well-recognised enterprise brand amongst the likes of Gartner, which is one of the things I am extremely proud of,” Wire’s CEO Morten Brogger told me.

“I also think that with the focus on a revenue-generating, enterprise business, we avoid situations like WhatsApp, where the only model you can ultimately turn to is monetising data,” he added.

And it seems to be working well when it comes to revenue growth. Right now, Wire has 1,800 customers. The number of customers has increased by almost 50% over the past year.

The company focuses on large customers, such as big corporations and government customers with a ton of potential users. Five G7 governments are currently using Wire. Overall, revenue has tripled in 2020.

In addition to working on Messaging Layer Security (MLS), Wire has been focused on improving conference calls and real-time interactions. The company believes messaging apps and real-time collaboration apps are slowly converging. And the startup wants to offer a service that works well across various scenarios.

You can also expect more end-to-end encrypted services in the collaboration space. Wire is still relatively small with 90 employees, which means it has room to grow and iterate.

Standard Energy, a vanadium ion battery developer, announced today it has raised a $8.9 million Series C from SoftBank Ventures Asia. The South Korea-based company says its batteries’ advantages over lithium ion include less risk of ignition and the ease of sourcing vanadium. The latter is an important selling point, as electric vehicle makers face a potential shortage of lithium ion batteries.

Instead of serving as a replacement for lithium ion batteries, however, Standard Energy chief executive officer Bu Gi Kim said they complement each other. Vanadium ion batteries have high energy, performance and safety, but they are not as compact as lithium ion batteries.

Lithium ion batteries will continue to be used in hardware that needs to be mobile, such as electric vehicles or consumer devices like smartphones, but vanadium ion batteries are suited to “stationary” customers, like wind and solar power plants or ultra-fast charging stations for electric vehicles (Kim said Standard Energy is scheduled to ship its batteries to an ultra-fast charging station in Seoul soon).

Founded in 2013 by researchers from the Korea Advanced Institute of Science and Technology (KAIST) and the Massachusetts Institute of Technology (MIT), Standard Energy expects one of its main customers to be the energy storage systems (ESS) sector, which the company says is expected to grow from $8 billion to $35 billion in the next five years.

“A large number of renewable energy projects have slowed or even stopped in many places due to the unstable battery performance of lithium ion. VIB cannot be as compact as lithium ion. However, ESS projects or solutions including renewable energy plants provide enough space for our products to be integrated into their systems,” said Kim.

Standard Energy has already performed a total of over one million battery testing hours, including in a lab, at a certified battery performance test site and in actual operations. Kim said the company is confident its performance data will convince customers to adopt vanadium ion batteries.

In a press statement, SoftBank Ventures Asia senior partner Daniel Kang said, “The existing ESS market was in a state of imbalance due to the rapidly growing demand, and safety and efficiency issues of products. Standard Energy is expected to create new standards for the global ESS market through its innovative material and design technology with massive manufacturing capabilities.”