The Final Q1 Featured Founder | BlocPower
The 4th New Majority founder currently fundraising from YOU this quarter.
Hello New Majority Investors! Meet the future of equitable energy efficient buildings with this week’s Featured Founder, Donnel Baird and company, BlocPower! This one is lengthy, but that’s because climate change is a BIG issue.
BlocPower
First, some context:
🌎🔥Climate change is one of the biggest challenges facing humanity today, and the race to create climate solutions is on.
🤯Americans spend up to 90% of their time indoors, and these buildings contribute around 30% of annual emissions (Source: BlocPower).
🤷🧐From choosing appliances to scoping out a project, electrifying buildings can be complex and costly, presenting a variety of hurdles for urban planners and homeowners alike to make buildings greener.
🔋Cities and homeowners have vastly different project scales and energy needs. Leasing contracts can help to spread the costs of a project, making access to green energy systems more feasible.
🏠🌱With the rise of remote work and concern about climate change, homeowners are increasingly eco-conscious and are looking for one place to learn about how to make their homes healthier and greener.
💁♀️🤝And once they learn about the IRA* rebates, they’re looking for reliable, trustworthy contractors to do the work.
*IRA stands for Inflation Reduction Act: Passed in 2022, the IRA is notable for promoting the adoption of clean energy systems. The IRA created tax incentives, Home Efficiency Rebates, and Home Electrification and Appliance Rebates, which can cover up to 100% of the cost of green appliances and upgrades.
💪🏢Municipal and Utility Leaders are looking for ways to make their cities and businesses resilient to rising temperatures, energy costs, and tap into IRA funds.
3️⃣BlocPower offers services to three customer demographics:
👥Property & Home Owners: BlocPower acts as project manager, scoping and outfitting homes and small buildings with new electric heating systems which use just ⅓ of the energy needed for fossil fuel heating systems (Source: BlocPower).
💼Municipal & Utility Leaders: BlocPower can scale up their end-to-end services for larger partnerships and electrification projects, emphasizing low income and underserved areas.
👷♂️Contractors: BlocPower works with contractors to provide electric heating systems to clients in their projects, capitalizing on clean energy incentives and enabling contractors to maximize their client pool.
💡🔌This raise is for BlocPower Energy Services 3 (BPES3), which primarily focuses on projects with individual property owners. BlocPower calls themselves “a one-stop-shop for green home and building upgrades,” working as comprehensive end-to-end partners with property owners from site assessment to repairs throughout the duration of the leasing contract.
This company is made for you if:
♻️🔜You believe green infrastructure will become the standard infrastructure in the future.
🙌⚖️You believe that climate justice is crucial to solving climate change, and that green and clean solutions should be accessible to all.
🔆You want to invest in a company tackling one of the biggest contributors to climate change – building emissions – from multiple angles (aka multiple revenue streams).
Tell me more:
BlocPower is solving one of the biggest issues in the fight against climate change, leveraging technology and strategic partnerships to electrify buildings across the country and reduce carbon emissions. BlocPower Energy Services 3 houses a wing of the company dedicated to making electrification accessible for individual property owners and families, promoting BlocPower’s commitment to climate justice. In BlocPower’s own words, they’re “electrifying buildings much like Tesla is electrifying cars!”
THE DETAILS
Industry: Transportation & Construction, ConTech, CleanTech, Urban Planning, Infrastructure, SaaS
Impact: Good Health & Well-Being (SDG 3), Affordable & Clean Energy (SDG 7), Industry, Innovation, & Infrastructure (SDG 9), Sustainable Cities & Communities (SDG 11), Climate Action (SDG 13)
Team Diversity: Black Founder
HQ: New York, NY 🍎🗽
Company size: 51-200 (employment numbers for BlocPower, the parent company of BlocPower Energy Services 3)
Year founded: BlocPower was founded in 2014, and BlocPower Energy Services 3 was founded in 2021.
Key investors: BlocPower boasts an impressive list of institutional investors, including but not limited to: Goldman Sachs, VoLo Earth, Andreesen Horowitz, and Microsoft’s Climate Innovation Fund. In the past year alone, BlocPower raised a whopping $150m. Read BlocPower’s March 2023 press release here.
Goldman Sachs: Goldman Sachs worked with BlocPower to raise $130m in debt financing. These funds are reserved for specific “multi-family and small commercial projects” (Source: BlocPower).
VoLo Earth: VoLo Earth invests in companies pioneering solutions to the climate crisis and led BlocPower’s Series B for over $24m.
Investment type: Priced Round*
*A Debt Note includes a fixed annual interest rate and period to maturity, with payments made back to investors annually. BlocPower Energy Services 3’s current offering has an annual interest rate of 7.25% over 12 years. The first payment will be made on January 2nd 2025.
Amount Invested: $218,400
Min investment: $100
Goal: $50k-$1m (BlocPower Energy Services 3 has already reached its minimum fundraising goal, but will continue towards a maximum of $1,000,000 by their March 31 deadline).
Deadline: March 31, 2024
Early traction:
🚀📑BPES3’s parent company, BlocPower, has secured major contracts with cities across America to electrify their buildings and move towards carbon neutrality. Notable projects include:
🛠Ithaca, NY: BlocPower was chosen to lead Ithaca’s decarbonization efforts in electrifying nearly 6000 buildings in an effort to achieve carbon neutrality by 2030.
⚙️New York, NY: BlocPower has a range of electrification projects in progress in NYC and is also an integral part of the Civilian Climate Corps, a green workforce training program – the NYC mayor’s office recently invested $54m to add 3000 new trainees.
🏗 Cambridge, MA: BlocPower is partnering with property owners to make use of MassCEC (Massachusetts Clean Energy Center) grants totaling $800k for the decarbonization of multi-family buildings.
🌟Cincinnati, OH: Following the passage of the 2023 Green Cincinnati Plan, which included goals to electrify 20k homes by 2030 and halve reduce carbon emissions by 2030, BlocPower announced plans to leverage BlocMaps technology to create a plan for retrofitting buildings for electrification.
Other municipal partners include Menlo Park, San Jose, and San Luis Obispo, CA, Denver, CO, Buffalo, NY, and Atlanta, GA.
✅💸From crowdfunding to institutional investments, BlocPower has a demonstrated track record in fundraising. Previous crowdfunding rounds have generated a total of $3.3m since 2021 for BlocPower and its subsidiaries, like BPES3.
2021: $997,250 in their 1st crowdfunding offering, with capital deployed towards 20 project signings and 8 project completions.
2022: $1,808,800 in crowdfunding, which they translated into a further 8 project signings.
2023: $472,012 in another crowdfunding offering (Q2 2023).
🗣🗯BlocPower has considerable press, including:
In March 2024, NPR profiled BlocPower in an article discussing the city of Ithaca’s plans to decarbonize buildings.
Founding Team:
Donnel Baird (Founder, CEO): Donnel is a powerhouse in the clean energy world and a passionate advocate for clean energy and climate justice as the keys to healthier people and a healthier planet. With over a decade of experience in community organizing, startups, and sustainability, Donnel also speaks extensively on the future of climate solutions. Watch Donnel’s talk on fossil fuels and household appliances with TED Conferences or listen to the podcast where I first heard Donnel and became obsessed with Blocpower.
DUE DILIGENCE
Pros:
🔗 Combining tech with data and construction: As an early mover in the space, BlocPower has developed a variety of tech tools and a massive database on the energy operations of buildings nationwide, making projects more efficient and accurate from start to finish.
🔍🗺BlocPower leverages their unique, proprietary BlocMaps Saas platform to identify target buildings and create cost-efficient, compelling electrification plans for large-scale projects and city partners.
🧑💻For property owners, BlocPower can assess sites virtually to efficiently create accurate project scopes.
🔒💥Industry Pros: BlocPower is well-established in the CleanTech and ConTech space, with dedicated teams in multiple markets to focus on BlocPower’s three key customer demographics (Property Owners, Municipal & Utility Leaders, and Contractors).
✨✍️Attractive financing model for homeowners: BlocPower is making electrifying homes more accessible, requiring no money down and covering maintenance/repairs for the full length of a property owner’s contract (typically 15-20 years). This enables clients in underserved communities to achieve cleaner, more efficient homes, while also combating climate change.
📈😄Reaching the maximum goal of $1m in this current raise would enable BlocPower/BPES3 to carry out 50 new home/apartment electrification projects. (Source: BlocPower)
🫰Leveraging debt and policy: BlocPower/BPES3 aims to maintain a 1.2x Debt Service Cover Ratio (DSCR) in 2024, built on a multi-million dollar pipeline of major projects with city partners and a projected $228k/year revenue from current leases.
*Debt Service Cover Ratio (DSCR): BlocPower wants to ensure that their revenue after operating expenses is at least 20% greater than annual debt service payments.
Policies like the IRA have introduced rebates which further incentivize customers to pursue green energy solutions for their homes through BlocPower’s services.
Potential Risks:
🎢🚧Regulations and incentives around climate impact projects are constantly changing and have become intertwined with politics. Subject to the political environment and changing administrations, BlocPower could face much higher costs and less motivated customers if recent policy advances like IRA are reversed.
⬆️⚠️⬇️BPES3’s revenue comes from lengthy contracts (15-20 years) that mirror mortgage and lease terms and appliance lifetime. This speaks to BlocPower’s confidence in the durability of their work, but also exposes BlocPower to the risk of having to cover repairs over a long period.
🤔BlocPower/BPES3 needs to continue acquiring new customers/contracts to generate further revenue. Customers could be slow to adopt BlocPower’s home heating electrification services, as solar-focused companies have tended to dominate the clean energy market.
🚫While BlocPower has ambitious financial goals in 2024, BPES3’s long term debt increased from $980k to $3m in 2022. Through September 2023, BPES3 was still running a net loss and not projecting profitability in the near future. But, BPES3 has upheld their debt payment obligations to date.
Competitors: Given BlocPower’s diverse service offerings in the ConTech and CleanTech space, they have a range of competitors. For homeowners and property owners, most competitors are focused on solar power alone, while BlocPower/BPES3 focuses on electrifying a home’s heating system.
NineDot Energy: Focused on clean energy solutions in New York, NineDot was founded in 2015 and has venture capital backing from notable investors like Carlyle. Working with a similar set of customer demographics as BlocPower, NineDot emphasizes batteries for energy storage to decarbonize power grids.
Onsemble: Newly launched in 2024, Onsemble is based in California (currently serving the San Francisco Bay Area and surrounding counties). Onsemble’s services are focused on installing electric water heaters, but with the financial incentives of IRA rebates, hype around green home appliances, and SF’s goal of net-zero emissions by 2040, plans to expand Onsemble’s home electrification offerings are on the horizon.
Many other home energy startups install batteries, which can improve energy efficiency and store energy that can be deployed in the event of an outage. However, while these energy upgrades involve harnessing solar power to fuel the battery, they do not solve the issue of fossil-fuel powered appliances within a home.
Why BlocPower Energy Services 3:
BlocPower Energy Services 3 (BPES3) presents a unique opportunity to support climate justice and building sustainable communities. BlocPower (BPES3’s parent company) is a leader in climate solutions for infrastructure, bringing a decade of expertise and proprietary technology that form an innovative, competitive edge towards addressing the pressing issue of climate change. In their previous crowdfunding raises, BlocPower/BPES3 has shown their ability to create results in the communities they serve and expand their market footprint. This raise will enable BPES3 to continue BlocPower’s mission to electrify the nation, one building and family at a time.
