Face-To-Face with our Portfolio: Bidgely
It’s been almost a decade since Bidgely was founded in a garage in the heart of Silicon Valley and around two years since innogy New Ventures LLC participated in a significant Series C round of funding for the company. Today many of the world’s top utilities count on the company’s technology to transform multiple dimensions of their data into actionable consumer energy insights. At the start of January, Bidgely announced a major new partnership with US smart infrastructure firm, Itron, that will see its ground-breaking artificial intelligence (AI) driven analytics capabilities installed in 40 million smart meters across the US to enable new insights and drive efficiency in the energy industry.
We sat down with Bidgely CEO Abhay Gupta and innogy New Ventures LLC Managing Director Stefan Padberg to talk about Bidgely’s rapid growth phase and vision to further unlock the power of data and AI in energy.
Can you tell us a bit about what your company does and what you are focusing on at the moment?
Abhay: Bidgely is a data analytics company that has spent the last eight years extracting information out of meter data for electric and gas utilities and energy retailers around the world. We invested in the technology of load disaggregation that allows utilities to understand who their customers are and interact with them in a highly personalised way, such as through relevant offers, rate plans and energy saving programmes. The arrival of solar and batteries has challenged the future of energy utilities, and in order for utilities to transform and better serve customers’ needs, they need to first understand who their customers are.
We are currently focused on spreading the use of AI across all utility customer interactions and decision making. Our UtilityAI platform enables utilities to be more strategic in the way they operate, providing them with actionable insights on the customer experience, including satisfaction levels, to reduce churn reduction, improve energy efficiency, enable peak demand shifting and introduce new revenue models.
What key challenges do you foresee for utilities going into a digitised and decentralised energy system? What role do you see data usage and AI playing in this future and what impact will it have for their retail business?
Stefan: Energy companies are on their way to catching up and develop more customer-focused solutions. I want to give you one simple example: Imagine you receive a credit card bill only once a year and you were told “Please pay €X – don’t ask us why.“ And now think about your energy bill where a German energy customer receives a bill once a year and has no understanding what the energy has been used for and why the bill is what it is. We are on a journey to fundamentally change the way utilities communicate with their customers. Digitisation is the key for transparency here. And transparency, in turn, is key to the optimisation of energy usage. We want to support our customers in the way, how much and when they use energy. Just like in every other industry, we will finally be able to truly understand customer behavior and preferences and become an integral part of the customer’s journey.
How is Bidgely transforming the energy industry? Do you see Bidgely’s technology as the next big thing that has the potential to disrupt the existing system?
Abhay: Bidgely has developed a technology that truly transforms the decision-making process for many utilities, both internally and externally. Bidgely’s technology focuses on load disaggregation; identifying the footprint of each appliance within a household using data extracted from meters without any additional hardware sensors or consumer inputs. This means that for hundreds of millions of homes where data is already collected every day from the field, Bidgely can identify what is happening inside the home, specifically which appliances are being used and when – as well as how efficiently or inefficiently they are performing. As a result, consumers can accurately be put on the right rate plans, energy programmes and rebate offers. Additionally, utilities can use this information to shift loads for better grid stability using non-wire alternatives. For energy retailers, this also means they can make more revenue per customer.
Almost all the companies in this space are, in some shape or form, looking to buy, develop or partner with a provider that has access to this AI-powered technology. Bidgely is that solution.
Why did innogy New Ventures LLC invest in Bidgely? What opportunity did you see in the company and how does it fit with your strategy?
Stefan: Bidgely‘s technological solution is a good example of how we envisage the digitised future of energy. It´s a cornerstone of our strategy to better understand and ultimately benefit from data-driven business models. Bidgely has been gathering, analysing and interpreting the energy usage patterns of millions of households around the world for many years now. The insights this data enables helps us to understand how to build the decentralised, customer-focused and more sustainable energy company of the future. We have used the Bidgely technology as an entryway to our core markets, attracting thousands of happy customers already.
Why did you choose innogy New Ventures LLC as an investor?
Abhay: innogy is one of the largest, most advanced energy retailers in Europe. This relationship not only allows Bidgely to scale faster and better understand the needs of the industry, but it also provides an opportunity to commercialise our technology while still in the early phases of the company. We love working with innogy and are very proud to have them as a partner in this journey.
Can you tell us about your approach to giving growth support to Bidgely?
Stefan: Bidgely is a rapidly maturing company that’s achieving strong commercial success. In the last couple of years, their strategy has evolved mainly to focus on their large customers in the US. That’s why our relationship with them differs from some of the “growth” cases we have in our portfolio. We have limited impact on their strategy for growing with US utilities, but we have helped Bidgely with market entry to Europe, most notably in Eastern Europe, as well as providing insights and perspectives based on our energy industry experience. I must give thanks to Abhay and his team for working with us during all these years. Abhay and his team have become trusted partners in the Silicon Valley ecosystem for us and actually helped us grow as partners and investors. So, I would call this a win-win for Bidgely and innogy alike.
What makes innogy New Ventures LLC different to other investors (VCs or other corporates)?
Abhay: innogy makes a distinct and organised effort to help their investments commercialise. They have offered connections within their business as well as the Innovation Hub’s wider ecosystem, introducing us to numerous partners and helping us become well connected in the industry.
You have already acquired some big names in the energy industry as your customers and successfully completed a significant Series C round of funding. When do you expect exponential growth for your business?
Abhay: We are going through an excellent growth phase – doubling our business year-over-year for the last three years, and we plan to continue this momentum for the next few years. The utility industry is a segment where adoption takes time and things can move slowly. There are very few companies in this space that have made it big let alone experienced an exponential growth rate compared to their impact in other verticals. Bidgely has done tremendously well compared to most other companies in the space – growing steadily over the last several years. We expect that growth to accelerate in 2020 with new partnerships that we are working on, including a partnership with Itron that was announced recently. We’re excited that this partnership has been well received and that the industry recognises that further integration between meter hardware and analytics capabilities is a significant way to unlock new opportunities for utility savings and distributed resource integration.
Can you provide some concrete examples of how innogy New Ventures LLC has provided growth support/cooperation?
Abhay: innogy has provided a great deal of support to us, largely through introductions to investors as well as internal business experts. They also provide critical industry advice and references that are helping us grow as a company.
Where do you both want to be in two years from now on this joint journey?
Abhay: We have already seen the widespread adoption of AI technologies by utilities looking to enhance their decision making. Billions of dollars have been invested in smart grid technologies, and we are now noticing an even larger adoption of data-driven analytics by utilities as demand for actionable data insights increases. We anticipate itemised energy bills to become a standard, and customer targeting to be much more sophisticated thanks to highly accurate consumer energy profiles generated by AI. We also see utilities develop “Energy-as-a-Service” models, where they can diversify their business more broadly and expand beyond the current business model of simply selling kilowatt hours as their primary source of revenue.
Stefan: I would say we will be able to look back at a successful time if the energy used by our customers is more sustainable, cheaper and as reliably delivered as today. Bidgely’s technology and AI as described by Abhay are the “Tools we Need” so that we can jointly make this happen. Sound ambitious? It is. And that’s why innogy and Bidgely must work even closer to bring these benefits to customers and new and digitised energy companies alike.