Proving the Business Case for the Internet of Things

PassivSystems turns to crowdfunding to finance growth plans

Steve Rogerson
October 10, 2017



UK home energy asset management company PassivSystems has turned to crowdfunding to accelerate its growth strategy.
 
It has launched a fundraising campaign on Crowdcube with an initial target of £650,000 to provide additional working capital to support faster deployment of its smart energy management services for utility companies, solar PV asset managers and the fast-growing district heating markets.
 
“We have demonstrated solid demand for our technology and services based on long-term contracts and recurring revenue streams from our major partners,” said Colin Calder, chief executive of PassivSystems. “Now we have an opportunity to build on our success as the demand for smart energy management in homes continues to grow, both in our UK and overseas markets.”
 
He said the prevalence of solar, battery storage, electric vehicles, smart appliances and electric heating had created an “unstoppable momentum” in clean, distributed power that was fundamentally changing the way that energy was generated and consumed.
 
“Our smart home energy asset management services enable us to reduce lifetime operating costs for consumers making our services compelling for equipment manufacturers, financial institutions and energy companies,” he said.
 
PassivSystems counts Western Power Distribution, Wales & West Utilities, Foresight, E.On, EDF Energy, British Gas, Engie and Hitachi among its tier one customers. It has more than 40,000 solar PV systems under management using a business model that generates recurring revenues. This market offers growth potential with more than 800,000 solar PV systems installed in the UK alone. Typical service contracts range from three to twenty years, providing long-term, predictable revenue streams.
 
The company is forecasting more than 80 per cent revenue growth this financial year and is EBITDA profitable on a quarterly basis.
 
PassivSystems has a track record of collaborative research with partners including University College London and the Energy Technology Institute. Through its R&D programmes it aims to transfer intellectual property to commercial products.
 
The company’s secure, scalable cloud-based energy services platform is the result of more than 200 man-years of R&D. The platform collects approximately two million meter readings from homes each day.
 
Using weather adjusted algorithms and machine learning, the platform optimises operational performance of solar PV, home batteries and heating equipment. Its smart heating service has been demonstrated to reduce lifetime operating costs to UK households worth hundreds of pounds a year per household. It has been selected by utilities to help differentiate their supply services.
 
“The residential energy market has been largely untouched for over sixty years and, as the clean power generation revolution continues to unfold, the wealth creation in the industry will be very significant for companies who enable grid flexibility,” said Calder. “PassivSystems has a highly experienced, focused and driven team with a track record of building successful companies in rapidly changing markets. Through our crowdfunding campaign, we look forward to welcoming many more investors to share in the success of our exciting journey.”