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Capacity. Amy Haase, CIO Amit Shah, CTO TC Chang, CMO Matt Grodin, CFO Travis Engelman, CEO. Problem & Customer. Problem: Increasing electricity costs Government mandates to monitor & reduce energy consumption Hotel expansions underway while economy tightens
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Capacity Amy Haase, CIO Amit Shah, CTO TC Chang, CMO Matt Grodin, CFO Travis Engelman, CEO
Problem & Customer Problem: Increasing electricity costs Government mandates to monitor & reduce energy consumption Hotel expansions underway while economy tightens Ec0-savvy competition/consumer Utility companies may be over charging Customer: Hospitality Industry Demonstrated demand for energy efficiency systems Opportunity for large scale energy savings A large hotel chain spends $112 mil on HVAC and lighting or $597/room/year Source: PKF Consulting Report
Market Size & Growth Market Size 15 million hotels worldwide $2.2 billion/year spent on lighting and HVAC Top 20 hotel chains owned by 10 groups Representing 18% of market (2.79 million rooms) Growth Average expansion of 6% per year in 2006-2007 Average operating income increase of 12% per year Projections for 2008… Business objectives Implement Capacity solution across major hotel groups Enable hotels to experience significant savings (20+%) to mitigate rising electricity costs Source:http://www.mkg-hospitality.com
Solution Offering • Add-on module to make existing light controllers and thermostat that enables bi-directional data transfer • Designed to work with existing Wi-Fi standards and provision to work with ZigBee standard as well • Gateway Box to collect overall usage data (connected wirelessly to add-on module) • Software will be offered As a Service (SaaS) over WWW with focus on business/operational intelligence from data that provides actionable list • Eliminates need for hotels to manage IT infrastructure, avail pay as you go expense model and instant scalability Source: http://buildings.lbl.gov/CEC/pubs/E5P22T1e_LBNL-53406.pdf http://wisuite.com/downloads/documents/WiSuite_WiPoint485.pdf
Product Features Visualization/Analysis Features: Charts: Average, X-Y Scatter, High-Lows etc... Load duration: Sort and bin data for plotting load (or load factor) and hours at each load. Aggregation: Aggregate multiple buildings or sub-meters. Per sqft: Normalize consumption by area for power/utility cost. Forecasting: Forecast day-ahead loads. Demand Response (DR) Benchhmarking Features: Notification: Notification of DR event via web-site, e-mail, phone, pager, cell phone, etc. Saving analysis: Cost estimation of expected utility bill saving using forecast and/or utility tariffs Benchmarking: Benchmark usage against other building for same hotel chain or other hotel chains Sources: http://buildings.lbl.gov/CEC/pubs/E5P22T1e_LBNL-53406.pdf http://wisuite.com/downloads/documents/WiSuite_ControlCenter.pdf
Business Strategy Competitive advantage / core differentiators: Software service model Outsourced hardware sold at or near cost (low-cost) Fluid integration with existing facilities systems
Value Curve Differentiation/competitive advantage from incumbent solutions: SW Web-based Control Commercial Capacity Agile, Lucid, Greenbox InnComm, Onity WiSuite, WattStopper, EnergyEye HW Non-web-based Sensing Residential
Market Forces Firm rivalry (medium threat – unique position) Complements (low threat – healthy eco-system in place) Hardware suppliers: sensors & data collectors; thermostats, meters, & networking equipment Installers Consultants Threat of new entrants (medium threat) HW-focused providers in the hotel energy monitoring industry can move towards a software focus. Metering, automation, or networking providers can develop specific solutions to target the hospitality industry. Substitutes (high threat) Other energy conservation solutions (solar, cogeneration / combined heat and power, water conservation efforts, water heating conservation efforts) Renovation Energy hedging Customer power (high threat – large chains with economies of scale) Supplier power (low – commodity components)
Revenue Model In-room sensor $5 Web Database $1.50-$3 per month Base Unit $5000
Customer ROI 20% lower Electricity/HVAC bills • Capacity pays for itself in year 1 • Average large hotel electricity cost $232,000 20% Savings = $46,400 Capacity cost = $12,250 year 1 $6000-9000 annual after yr 1 Source: AHLA Report
Resource Allocation and Funding Founder commitment: $1 M – Q1 2009 Series A: $4 M – Q1 2010 Series B: $5 M – Q1 2011 Total: $12.5 M Series C: $3.5M- Q1 2012 Series A Round Need: To further develop the hardware and software leading up to 2010 Series A Round Milestone: Working prototype of the solution, Established a partnership with a hardware manufacturer for components, Patent filed Series B Round Need: Necessary for the implementation of the first generation of SW + HW Series B Round Milestone: By Q1 2011 Capacity will have a contract with one major hotel chain Series C Round Need: primarily for operations for rapid market adoption in 2012.
Return on Investment The premoney valuation in 2010 will be $32 M. In exchange for $4 M Capacity will exchange 32% of total equity. Possible exit strategy to be acquired by one of the big three infrastructure Valuation: $125.5 M based on 5x P/S energy monitoring multiple $40 M return on the investment which corresponds to a 225% IRR.
