Subbloie’s Budderfly raises $55 million
Shelton-based Budderfly, a pioneer in the corporate energy efficiency-as-a-service industry, on Tuesday announced it had raised $55 million in new growth equity and project debt funding. The financing round was led by Balance Point Capital of Westport with participation from Connecticut Innovations.
Budderfly is the brainchild of software entrepreneur Albert R. Subbloie Jr., who founded Tangoe Inc. and served as its chief executive from 2000 to 2016. Before that he founded and headed Information Management Associates (IMA) from 1990 to 2000.
The new funding, together with the previous $22 million funded over the past 24 months by Edison Partners, Subbloie, Budderfly senior management, the state’s Department of Economic & Community Development (DECD) and others, will be used to scale customer project installations, accelerate Budderfly’s go-to-market efforts and expand product growth, according to the company.
The new financing round "is very big because we're a very capital-intensive company," explained Budderfly Vice President for Corporate Development Matthew Nemerson, who was among the initial investors in the company. "The energy efficiency-as-a-service model requires us to invest in equipment for businesses and buildings. As we grow, which we are doing geometrically, it requires a lot of capital. So the timing is perfect."
In a statement, Budderfly said it is now positioned to implement its business plan to manage more than $3 billion in customer energy spending over the next decade.
Budderfly brings an innovative approach to the emerging Energy Efficiency as a Service market, with advanced software, patented energy Internet of Things (IoT) measurement and control devices and numerous energy-saving facility components and upgrades.
Budderfly’s business model delivers an energy-management solution that provides significant energy savings at no cost to commercial energy users. To date the company has deployed some 1,000 installations in facilities including office buildings, retail stores, restaurants, schools, recreational buildings, health-care facilities and other sites.
Locally Budderfly is installing energy-management solutions at Science Park in New Haven and Chabaso Bakery. "We're focusing on the types of businesses that are the biggest users of electricity on a per-square-foot basis," Nemerson explained. "That's where our model can have the most impact."
Studies show that over 30 percent of energy used in commercial buildings, or nearly $60 billion annually, is wasted because necessary investments are not being made in energy efficiency measures. Budderfly’s business model removes the major impediments to taking action, including a lack of investment capital and confusion over best practices due to the complexity of the options.
“Successful energy management is a real problem for most organizations due to the complex and fragmented nature of the energy space,” said Subbloie in a statement. “Our service combines accurate point of consumption measurement and controls with our energy efficient infrastructure upgrades, maintenance, expertise, and monitoring to provide a one-stop, single vendor, energy management solution that delivers real savings to our customers.”
Said Balance Point Capital Managing Partner Seth W. Alvord in a statement, “Budderfly has taken a leadership role in the emerging energy-efficiency market, leveraging its strength in software automation and IoT [Internet of Things] energy devices along with a proven management team and distinctive business model to deliver a leading-edge solution that is a great new option for many businesses and building owners.”
In addition to Balance Point Capital, Connecticut Innovations, the state's pubic-private technology-investment arm, invested $2 million in debt and equity in Budderfly, according to Nemerson. Also, the state's Department of Economic & Community Development (DECD) provided about $1.5 million in debt financing during the initial funding round, he added.
Shasta Partners LLC acted as exclusive financial advisor to Budderfly on the transaction.
Contact Michael C. Bingham at mbingham@newhavenbiz.com