Why We Invested In Public Grid
Public Grid (formerly known as Cottage) empowers residents to save money and procure clean energy via its platform aggregating energy supply.
This week, we introduce you to one of our Q2 ‘23 portfolio companies, Public Grid, a groundbreaking platform aiming to transform the way residents manage their energy consumption. With a clear vision, a proven problem, and a team of exceptional individuals at the helm, Public Grid is poised to revolutionize multifamily housing energy consumption by making it more sustainable, cost-effective, and convenient for users.
The Problem Set Driving Our First Pre-Revenue Investment
a) Multifamily residents lack easy access to renewable energy options despite 73% of renters saying it's something they want provided to them
b) Renewable energy is generally more expensive than traditional options
c) Previous business attempts to convert individuals to renewable energy have failed due to non-aligned incentives and minimal scalability
In May 2023, we made the strategic decision to invest in Public Grid, recognizing its tremendous potential to revolutionize the renewable energy market and drive sustainable change. What stood out to us was Public Grid's unique positioning in the market, with a focus on the B2B real estate channels rather than solely targeting high-income apartment renters or the single family residential market. In 2022 the National Multifamily Housing Council (NMHC) renter preference survey found that it was important for 73% of renters that their building offered renewable energy - the highest scoring preference factor measured. Additionally, we were impressed by Public Grid’s very early partnerships, having been granted access to a potential customer base of 350,000+ units. By combining their innovative platform with strong industry relationships and a deep understanding of the market, Public Grid is poised to lead the charge towards a sustainable and renewable energy future in the multifamily asset class.
The High-Voltage Team Behind Public Grid
Public Grid is powered by a dynamic and talented team consisting of three key members. Their passion, dedication, and ability to leverage strategic relationships position Public Grid for rapid growth in the multifamily housing sector.
Zack Schmitz, Co-Founder and Chief Executive Officer (CEO), is a visionary leader with a background in design research and innovation. Zack spent five years at Deloitte Consulting and recently completed a Master's Integrated Design & Management and EECS at MIT. Amongst Zack’s work at MIT is research on energy markets directly applicable to the problem Public Grid is solving. While working in the consulting sector, Zack started Public Grid’s predecessor with a similar problem focus, except the customer base was single family home natural gas customers. Zack pivoted this previous venture into Public Grid after meeting his Public Grid cofounder, Ryan.
Joe Robbins, Co-Founder and Chief Operating Officer (COO), brings a diverse skill set and a strong focus on social impact and sustainability. With prior experience in founding a last-mile delivery startup and the EDF’s climate corps program, Joe has a deep understanding of marketing mediums and is adept at driving positive operational change. His commitment to sustainability aligns perfectly with Public Grid's mission, and he plays a pivotal role in shaping the company's marketing strategies and ensuring a seamless customer experience.
Ryan Freed, Partner, Investor, and serial entrepreneur, adds significant value to Public Grid through his extensive experience and strong industry connections. As the former founder of hOM, a tech-enabled amenity platform for residential and office buildings, Ryan has a deep understanding of selling to and through building owners and tenant software platforms. His prior success in growing hOM, which was eventually acquired by Alfred in 2021, showcases his ability to scale ventures and build strong relationships with major real estate players needed to scale the company.
Lowering Costs And Delivering Sustainability
The business model is simple yet innovative. Public Grid partners with building owners and property managers to aggregate demand during the resident onboarding process and offers that demand to energy retailers who compete to win these accounts. This model capitalizes on three important incentive alignments:
1) Ensures end users get the best energy pricing through bulk contracts
2) Lowers CAC (and hedging costs) for suppliers
3) Provides a new revenue stream for the owner/manager through revenue sharing with Public Grid
Public Grid stands as a complete energy management solution for residents. The platform offers renters the opportunity to lower their energy costs while making a positive impact on the environment by switching to solar and wind instead of more harmful alternatives. Through their innovative approach, Public Grid taps into the power of aggregated demand, securing discounted energy pricing for residents similar to what commercial and industrial businesses enjoy as a market standard. This approach has previously proven successful in United States energy markets, with average savings of 5.4 cents per kWh for commercial and 8.9 cents per kWh for industrial customers in deregulated states. By leveraging this aggregated demand, Public Grid estimates potential aggregate savings of $300 per year per consumer for both the end user and the energy supplier.
The platform is free for consumers to use. Once in the platform, Residents can subscribe to renewable energy without increasing their utility bill, scan markets to secure local credits, receive price alerts to reduce bills further, and soon integrate with smart thermostats and home IoT devices to adjust usage based on local energy price to further optimize spend for customers.
(Note that Public Grid was formerly known as Cottage).
For more information on energy markets, Public Grid has some very helpful resources on their website.
A Scalable Platform For Renewable Energy
Public Grid's technological infrastructure plays a crucial role in its success. The platform operates in a "serverless" environment, ensuring scalability and performance, even with thousands of users accessing the platform simultaneously. This flexibility allows Public Grid to quickly onboard new customers, making it an ideal solution for launching across multiple buildings or portfolios.
Furthermore, Public Grid has strategically aligned incentives across its value chain to drive adoption and organic distribution. Residents benefit from low prices on renewable energy, building owners and landlords are incentivized through revenue-sharing agreements, encouraging them to promote Public Grid to residents and improve renter satisfaction. Channel partners and energy suppliers also benefit from this ecosystem, reducing customer acquisition costs and improving profitability.
Source: Clean Energy Buyers Association
Public Grid is initially targeting the PJM and NYISO energy markets (deregulated energy markets with high demand) - the PJM is the largest energy market in the U.S. focused around key states like Pennsylvania, Illinois, New Jersey, Washington D.C, and Virginia.
Early Action And Growth Potential
Public Grid's early traction with large pilots is a testament to the power of its value proposition and the capabilities of its team. With strategic partnerships already in place, including Moved, and major players such as, Invesco, and GreyStar, Public Grid has the potential to continue to onboard users going green. By targeting the vast market of approximately 20 million renters in the US within deregulated states, Public Grid estimates a serviceable addressable market (SAM) of well over $1B. A tailwind for the market is that as states continue to move toward deregulation, the market opportunity expands even further.
Public Grid represents a game-changing solution in the residential energy management landscape, empowering residents to lower their energy costs, reduce their carbon footprint, and actively participate in the transition to renewable energy. With its innovative technology, strategic partnerships, and clear value proposition, Public Grid is primed for exponential growth. At Hamilton Ventures, we are excited to support Public Grid on its journey towards transforming the energy market and creating a sustainable future for all.
At Hamilton Ventures, we’re thrilled to support Public Grid. We think their recent traction is just the beginning. If you, or any real estate owners/property management companies you know, are interested in Public Grid’s energy offerings, please don't hesitate to reach out. To learn more contact Public Grid directly by visiting the company’s website, or schedule a demo by contacting:
Connect With Hamilton Ventures
If you are a proptech entrepreneur looking for guidance or capital please apply via our website, or contact TJ Fleming: tfleming@hamiltonventures.io
If you are interested in investing in our portfolio opportunities, reach out to Prashant Kothari: pkothari@hamiltonventures.io