SCIenergy Partnering In Over $400 Million Fund For Efficient Building Retrofits

On the heels of its $12 million round of funding, SCIenergy, a provider of software and project development services for energy efficient building retrofits is partnering with an undisclosed investor to deploy a new $400 million fund for what it calls managed energy service agreements.

The new fund builds on the company’s existing strategy and mirrors a similar partnership that SCIenergy has with its investor Mitsui USA. The American arm of the Japanese conglomerate became an investor in the Dallas-based company’s latest financing round, according to a person familiar with SCIenergy.

Through the partnership between the two companies, SCIenergy has had access to a $100 million fund to finance energy efficiency projects in buildings, according to a person familiar with the arrangement.

Since merging with Transcend Equity Development in 2012, SCIenergy has kept a fairly low profile and has gone through a series of executive changes, not the least being the appointment of Transcend Equity Development’s Steve Gossett Jr. to the position of chief executive.

Property owners have always been interested in energy efficiency measures as a way to save money, but have been loath to invest significant capital up front to upgrade their buildings. Now, building efficiency software companies are providing access to capital to boost the growth of energy efficiency projects. In March, Noesis Energy announced a $30 million fund to provide financing for building efficiency retrofits.

To date, SCIenergy has raised $62 million from previous investors including The Westly Group, DFJ Core, DFJ Growth and Triangle Peak Partners. The company’s latest round was led by Braemar Energy Ventures and included Edison International, in addition to Mitsui USA’s investment.

Since its overhaul, SCIenergy has steadily gained traction, including a recent deal signed with Drexel University for a $6.6 million project to upgrade energy efficiency in 430,000 square feet wroth of science labs and academic buildings. The company is also working with Mitsui USA on a project to reduce energy consumption by 23.6% at 125 Maiden Lane, a 320,000 square foot condominium office property.

“Our goal is to essentially deliver Energy-Infrastructure-as-a-Service. Building owners and tenants get the benefit of building upgrades without the complexities or financial risk. Contractors and financial institutions, meanwhile, will see a huge increase in opportunities and deal flow,” said Gossett Jr., in a statement about the company’s financing. “In a few years, property owners are going to stop thinking of their utility bill as a pain and start thinking about it as a vehicle to get needed improvements done.”

Photo via Flickr user National Nuclear Security Administration