Energy fund to help Root3 stay put
Silicon Valley investors wanted Chicago company to move
By Julie Wernau
Finally, news about a promising startup that’s not leaving for Silicon Valley.
Energy Foundry, a Chicago-based venture fund paid into by Commonwealth Edison and Ameren shareholders, is infusing Root3 Technologies Inc., a firm that collects and analyzes data for large energy users to help them save on utility costs, with $150,000. This is Energy Foundry’s first investment; other Midwest and Silicon Valley investors are chipping in an additional $600,000.
“As a startup, you need capital, you need connections and you need a community, and Energy Foundry is doing a fantastic job of bringing all three to the table,” said Archie Gupta, Root3′s CEO. “If they weren’t here, we definitely would be moving to Silicon Valley.”
The additional money, Gupta said, will allow the company to provide automation options. In time, the company expects its technology would interact with a “smart” electrical grid being built by ComEd and Ameren that would time electricity usage with periods when electricity prices are lowest.
Several Silicon Valley investors were keen on Root3 moving to California. Illinois inventors of solar and battery technology, waste heat recovery systems and affordable residential solar installations, among others, have left the state in recent years for California, Ohio and Texas.
“It is good for the entire state when a company with this kind of potential makes Illinois its home,” said Jason Blumberg, managing director and CEO of Energy Foundry.
The decision to stay put is also good news for the clean tech community. It pushed for the fund’s creation in 2011 as part of a law paving the way for a massive overhaul of the state’s electrical grid. Among other mandates, the law directed the utilities to provide $22.5 million to support emerging energy technology.
Root3′s technology, developed at the University of Chicago, helps large institutions such as universities, airports and hospitals save 10 to 30 percent on energy costs.
Root3′s technology has been operating on the University of Chicago’s campus for five months, culling and analyzing data about everything from weather patterns to energy usage trends to give hour-by-hour advice to campus operators about the best times to turn on chillers, boilers and other equipment for the most energy savings.
In addition to Energy Foundry, a consortium of investors supports the company, including Midwest investors Manasota Capital in Chicago and Huron River Ventures in Ann Arbor, Mich., as well as California-based funds Claremont Creek Ventures and Mohr Davidow Ventures.