Invenergy, one of the biggest U.S. developers of wind, solar, storage and natural-gas power plants, is launching a 10-year venture fund to help digitize the grid.
The Invenergy Future Fund is targeting startups building a "digital application layer" to help make the electric grid more distributed, reliable and renewable, said Managing Director Amy Francetic.
"We’re at the place where utility-scale wind and solar is very competitive. The control system layer can improve the application of those resources. There’s real value in supporting those startups," said Francetic.
Francetic was formerly the CEO of Clean Energy Trust, a Chicago-based accelerator that has helped cleantech companies raise tens of millions of dollars. She joined Invenergy last February as the senior vice president of new ventures and corporate affairs to help the developer branch out into new sectors, such as distributed generation and demand response.
Now Francetic is managing Invenergy’s new venture arm that was formed to support the software and controls startups working to improve integration of those resources. Applications include predictive analytics, energy trading, cybersecurity and distributed energy control systems.
The companies operating in those sectors "are critical to the energy transition," said Francetic. "It’s a good time for these folks to make money."
General Electric and the Wisconsin utility WEC Energy Group are partners in the fund. Over the last decade, GE has ramped up its investments in the "industrial internet" — using sensors and software to digitize the electric grid, commercial buildings, power plants and other heavy machinery.
The Invenergy Future Fund is not just focused on environmental performance. Investments will target startups working on grid security and operational efficiencies.
For example, the fund’s first investment was Aquilon Energy Services, a software company that speeds up energy trades.
The fund will also support distributed energy integration and grid balancing, with a focus on storage, microgrids and virtual power plants.
The investment group will be housed inside Invenergy’s Chicago offices. "We’re excited to look beyond Silicon Valley and become a funding resource for companies all over the world," said Francetic.
Invenergy is one of the the top developers of renewable energy, natural gas, and more recently, battery storage. The company has completed nearly 16,000 megawatts of projects, including 10,071 megawatts of wind.
The brain trust — which includes Francetic, Invenergy CEO Michael Polsky, Invenergy COO Jim Murphy and former Kleiner Perkins associate John Tough — was formed to figure out the best way to apply venture capital to the cleantech sector.
"We’ve learned a lot about how the venture model fits into energy. It’s hard to invent a new fuel or material. There’s real value in supporting the startups developing the control systems and digital application layers to support the grid," said Francetic.
Details about the size of the fund were not disclosed.
Will cleantech venture capital ever make a comeback? Is it even the right model for the sector? Listen to our debate on The Interchange podcast.