In conversation with the CEOs of Vargas and Climeworks
After announcing their $35m Series B, we Zoomed in with WeaveGrid’s CEO Apoorv Bhargava and CTO John Taggart to understand how this software company intends to use bits to change the actual electrons of the grid. WeaveGrid’s software sits at the center of two centuries-old industrial systems, utilities and transportation, neither built for integration. By partnering with “data guardians” from both sides, they optimize EV charging to lower grid infrastructure costs, enable rapid EV adoption, and mobilize otherwise wasted clean electrons. Now they’ve caught the attention of the world’s largest enterprise software company, Salesforce, that’s bobbing and weaving their own way into the electrification - ergo digitization - prize of transforming the grid.
How do you define “the grid”?
AB: The grid is the most incredible innovation known to mankind. I define it as a force that enables all of the modern comforts that we enjoy today, whether it be healthcare, education, or the internet. It's this incredible, complex machine of machines that generates economic activity from power. Gretchen Bakke’s book The Grid sums it up nicely. No matter who you are, rich or poor, it’s accessible to you, particularly in the United States. When I turn on a light switch, somewhere out there a turbine spins or a solar panel absorbs a photon to create an electron, and I can have a cup of coffee!
JT: There’s the physical grid - the poles and wires - and then there’s the social and policy construct of how we make sure this basic service is available to everyone in a fair and cost-effective way. In addition to the physical infrastructure, we need to consider how that system is built, operated and governed.
What needs to change and how is the grid evolving?
AB: We’re seeing this huge shift from centralized fossil fuel generation to more and more clean energy sources. We also have to bring transportation, another century-old system that has never interacted with the grid, into the equation.
There are 280M cars in the United States, responsible for ~1/3rd of nation-wide emissions. That’s 2x the number of households in the United States - we’re truly a car nation. The grid challenge in front of us is how to take this massive, complex system of vehicles and make them all go electric in the next 10-15 years. There's incredible work being done on batteries, supply chains, and EV manufacturing, but what about the grid? Forcing all these new EVs onto a 120 year old electric grid is a challenge. Combining these two separate energy and transportation systems, intertwining and “weaving” them together, that’s the crux of our mission.
JT: This is where the digitalization and decarbonization piece comes in. We know we need to decarbonize the grid, but we also have new capabilities enabled by digitization including sensing, computing, etc. Previously supply was there to meet demand, but now supply and demand are both flexible. EVs are a demand resource that is flexible and have a huge potential to be able to balance supply and demand.
What’s different now versus during the OPower days? What needed to be true to set the stage for WeaveGrid?
AB: In 2015 when I headed to the West Coast for grad school, the cost of renewables was starting to plummet. Natural gas and fracking had started changing the dynamics of the power system, but renewables and batteries were taking it further. Tesla’s success had changed the conversation to “what happens when transportation goes electric?” But fundamentally the conversation was still about the first order issues of electrification like how do we build enough charging infrastructure? Batteries? Cars?
JT: And now, we’re just starting to see the snowball roll down the hill toward EV adoption at scale. Automakers are starting to produce EVs that people want to buy - i.e. sufficient range, model variety, volume.
Apoorv, how did you and John Taggart first come together to start WeaveGrid?
I started my climate journey as a chemical engineer and energy economist during cleantech 1.0. I joined BCG working with utilities then joined a company called Opower, an energy efficiency and demand response software platform which was one of the rare cleantech 1.0 success stories.
I met my co-founder John Taggart at Stanford where he was a PhD. John had worked at Tesla for CTO JB Straubel, so his background was in automotives and lifecycle emissions. We understood that these two very large systems - automotives and utilities - had never really interacted with one another.
The grid was not designed to handle exponential growth. And that’s precisely where the idea behind WeaveGrid started. We kept asking ourselves: how do we make these two multi-trillion dollar industries codependent on one another for electrification? Beyond charging infrastructure and the battery supply chain, the second order problems of consumer behavior change and digital integration is critical to prevent the grid from becoming a bottleneck for large-scale electrification.
What was your unique market insight that led you and John to build WeaveGrid?
This weekend is actually WeaveGrid’s fourth anniversary, but since then our founding premise has remained the same - that opportunity is trapped in the data silos of the utility and automotive sectors. The bridge between those two silos are future EV customers who will radically change their interaction with utilities.
Over time, we’ve developed a deeper appreciation for last-mile, low voltage distribution. Most of the “electrify everything” mantra is focused on generation and transmission. But unless you’ve got some magical way to bring all of that new nuclear fusion energy directly into my household to charge my car, we’re not actually electrifying anything! The third aspect of the grid, distribution, is consistently ignored and yet represents ~40% of our average bill. The distribution system is about a century old, and the average asset on it is about 35-40 years old. It's rickety, aging, and incredibly vulnerable to supply chain issues which electrification will only pound on. In a world of zero cost marginal clean electricity generation, delivery will be the new challenge.
Distribution is an underappreciated opportunity. What’s your solution and what are your unique technology capabilities?
We’ve stitched together various pieces of siloed data across the automotive, utility, and customer worlds. This allows us to intelligently co-optimize the generation and transmission supply side with cost reduction opportunities at the infrastructure and distribution level. We take a very collaborative approach to designing a better experience for our users and our customers. Complex climate problems can’t be solved alone by the best technology. That’s why we have an active policy, sales and business development, and partnerships team that work closely with our utility and automotive charging partners. We've hired unbelievable people from Google, Slack, etc. with transferable skills and a desire to tackle this complex climate tech puzzle.
What does the grid data value chain look like today? How does WeaveGrid’s software fit in?
Every moment - from the point of electron generation through to when it’s transmitted and delivered - provides a unique opportunity to optimize and generate data and predictive insights. To give an example, one of our partners, Xcel Energy, owns a wind project that generates excess energy in the middle of the night when demand is low. Instead of curtailing that clean energy generation, they send us a signal and we optimize a bunch of cars to charge at exactly the right time overnight with that wind energy. But again, we operate in a dynamic system and need a host of other data inputs in order to know if it’s really the best time to charge. Like how much are the cars already charged? What’re the drivers’ daily behavior patterns? Will an exceptional driving event occur today? Too much of the conversation about energy and data has been premised on the idea that some magical amount of data will just show up from all of these distributed resources. It's not true. Every distributed resource has very different data quality. One of WeaveGrid’s essential decisions was to prioritize access to the highest quality data, partner with the guardians of that data, and then actually work alongside them in bringing them into the value chain.
Is this a data access problem or is it an “intelligence” problem?
The data is actually very much accessible. There’s a false narrative that the data is trapped. In reality, by partnering with the right stakeholders and actually creating value by driving revenues up or costs down there’s ample data available to share. Freeing the data alone doesn’t save the world. You have to drive tangible action with it in order to move the needle on decarbonization. For startups who deliver a business case, the guardians of data are very willing to share.
What’s the benefit to the customer?
AB: Where our value truly shows up for customers is that we automate people's charging. You go home, plug in, and basically set and forget. If you're participating in one of our programs, you don't have to think about it. People think that they know the right time to charge their cars. That's generally untrue; the right time to charge your car is a very complex, dynamic thing that's changing all the time, especially as more and more people buy EVs. Maybe the right time to charge your car is at 11pm. But then, if three people in your neighborhood buy EVs too, that could change to 12am.
JT: The benefit to the customer is personalized automation. Consumers want to know they are doing the right thing - for the environment, for their wallet, etc. They want to know that they are getting the lowest cost and that they have control, but they don’t necessarily care about the details of the optimization. They also want to know that their car will be usable as a car. We give them the peace of mind that they can do all of these things at once.
What’s the business model?
We operate as a pure SaaS model where we charge a software subscription to utilities in exchange for helping them save costs that they (or ratepayers) would otherwise have to bear via rate increases. It’s very much a B2B2C model; we're charging our utility partners a fee for the analytics, insights and automation while offering a service to drivers for free.
How does WeaveGrid save costs for utilities?
BCG published a report which illustrates the costs per EV of going electric across generation, transmission, and distribution. Optimization can decrease transmission and distribution costs by ~70% per EV. It's critical that we keep the costs of electrification in check. Otherwise, EVs may lead to a pretty tremendous increase in the cost of electricity.
What’s your perspective on vehicle-to-grid? Is V2G an expansion opportunity for WeaveGrid?
In order to get to the state of vehicles contributing power back to the grid, we need to first understand how the vehicle can participate on the grid e.g. availability of the resource, level of customer trust, etc. Before a V2G future is possible, the grid first needs to be able to accommodate all these EVs. Many of our automotive partners are working on V2G. While complete V2G remains far off, I think that vehicle-to-home is a very valuable and near-term use case, where cars will provide backup resiliency to their homes.
Congratulations on your $35B Series B, announced earlier this week! Who’s involved, and - most excitingly - what’s next for WeaveGrid?
We’re delighted by the Series B, and especially excited that Salesforce Ventures led the syndicate of new investors from Activate Capital, Collaborative Fund, Emerson Collective, and MCJ Collective, as well as our existing investors Breakthrough, Coatue, Westly Group, and Grok Ventures.
Salesforce is the largest enterprise SaaS company in the entire world, and has taken a particular interest in sustainability within the utility and automotive sectors like through their public relationships with Ford and Volkswagen. Both sectors are going through tremendous digitization trends and are finally coming to the cloud. There’s a lot of synergy between shared clients, and their services and offerings.
We’re really grateful to all of these investors, and tremendously excited about our incredible team. There’s so much talent coming out of the tech industry who see how climate is a really incredible space. A lot of our team has never worked in climate before and this is their gateway. Now we’re excited to welcome more, it’ll be a lot of fun.
Interested in leading the charge to EV charging optimization? WeaveGrid is growing and wants to hear from interested talent, customers or partners. Special thanks to Shreya, Gabriela, and Sarang for their help weaving this together.