Wed Jul 30, 11:00 AM PDT
Alexey Dubov
Investment call discussing Emergy’s decentralized hydro tech, Series B raise, and strategic partnerships.
Reviewed Emergy’s evolution from early pilots in Atlanta, Denver, and New Zealand to a scalable developer model.
Outlined the Series B raise details: targeting a total of $45M with $15M as equity and $30M as a development debt facility.
Discussed potential partnerships, including a referral to Brick and Mortar Ventures (Curtis) and a data center lead for integrated water-energy projects.
Audio and Connection
Emily experienced an echo at the beginning due to her hotel's acoustics, and both switched to headphones to resolve the issue.
Blitzscaling and Fellowship Connections
Emily mentioned that Blitzscaling invested in Emergy's Series A and a subsequent capital raise.
Alexey noted his long-standing connection with Blitzscaling through a similar program for fund managers, although no deals had been done.
Emily explained she met Blitzscaling through the Barclays Bank fellowship for entrepreneurs called Unreasonable, where they attended an event together.
Barclays Fellowship Experience
Emily described the Barclays Unreasonable program; despite initial hesitations, she found it global, well-connected, and productive.
During the program, while raising $15 million with $3 million still needed, she secured all $3 million from connections made at the event.
Emergy’s Technology and Business Model
Emily provided background on Emergy, a company founded in 2016, which uses unique technology to generate power from water through a decentralized hydroelectric system.
She mentioned her background in defense contracting, which led her to the underlying technology in water power generation.
Emergy develops water infrastructure for profitable water and energy projects, combining revenue streams from both power and water.
She compared the system to the “solar panel of hydro,” highlighting the regulatory challenge of natural water projects and the enabling exemption for manmade water infrastructure permitting within 60 days.
Technological advancements allowed the use of commercial solar inverter technologies on hydro systems, facilitating fast grid connection and cost-effectiveness (e.g., a project in New Zealand using local solar inverters).
Funding History and Evolution
Initial funding included a ~$2 million launch from DOE grant funding plus approximately $850,000 in angel investments, used for early pilots.
Pilot projects were conducted with the city of Atlanta, Denver, water districts in Utah and Wyoming, and an installation in New Zealand during COVID.
An oversubscribed round of about $4.5 million was closed in late 2018 to refine manufacturing and beta customer installations.
The Series A round, named as such in corporate documents, raised $18 million, aimed at validating technology bankability and product-market fit for larger scale deployments.
Shift in Business Model to Developer Approach
Following Series A, Emergy shifted from selling equipment to a developer model focused on securing exclusive rights for project development via long-term power purchase agreements.
They have signed up 10,000 miles of water conveyance under an exclusive letter of intent in the U.S. (out of 150,000 miles available) and converted 10 water districts managing about 1500 miles of canals to 30-year definitive project contracts.
Emily emphasized that modernization of water infrastructure presents further economic opportunities, such as charging on a per gallon or per acre foot basis, which they are in the process of validating.
Current Fundraising (Series B) and Strategy
Emergy is currently fundraising for a Series B round, anticipating a total raise of $45 million.
Of the $45 million, $15 million is expected as equity in Emergy Inc. while the remaining $30 million will be structured as a development and construction revolving debt facility.
Alexey advised caution in communicating the $45 million figure to avoid misconceptions regarding valuation and ownership stakes.
Partnerships and Future Connections
Alexey mentioned contacts at Brick and Mortar Ventures, specifically Curtis, who focuses on construction technology, water, and energy, and offered to forward Emergy’s information to him.
Emily noted the relevance of data centers to Emergy’s technology, given the co-location benefits for water cooling, and acknowledged the potential value of partnerships in that area.
Alexey requested additional materials such as the investment pitch deck, product presentations, and any case studies relevant to data centers, and Emily agreed to send them under different email covers by the end of the week.
[Transcript] Meeting with Emily Morris (Emrgy) - Meeting Notes