Canadian-founded, San Francisco-headquartered AppDirect announced its second acquisition of an energy brokerage this year as it seeks to profit from rising power demand.
“Our acquisitions of DNE and BOX are happening at a crucial time when increased AI consumption has skyrocketed energy demands.”
Nicolas Desmarais
AppDirect
The software firm has bought Kirkland, Que.-based DNE Resources, an energy brokerage serving deregulated markets in the United States (US) and Canada, such as Alberta and Ontario. The acquisition follows the firm’s purchase of US-based Broker Online Exchange (BOX) in May.
AppDirect also announced it had received a $100-million credit facility from provincial pension fund and repeated backer La Caisse de dépôt et placement du Québec, which the company said helped finance both acquisitions.
The acquisition will allow AppDirect to further break into North American energy markets, the company said, as it seeks to capitalize on an anticipated increase in electricity demand over the next decade. AppDirect is seeking to provide the “everything store” for B2B services, including cloud services, telecommunications, hardware, artificial intelligence (AI), and now, energy.
“Our acquisitions of DNE and BOX are happening at a crucial time when increased AI consumption has skyrocketed energy demands,” Nicolas Desmarais, AppDirect chair and CEO, said in a statement.
AI infrastructure, including data centres, is expected to cause a 160-percent increase in power demand globally by 2030, according to a May 2024 report from Goldman Sachs. This could consume four percent of the world’s energy, up from one to two percent today, and double associated carbon emissions.
La Caisse has funded AppDirect several times over the years, including a combined $230 million towards establishing and topping up AppDirect Capital, a financing program for the tech advisors using the company’s platform. The pension fund also led a $185-million USD (then $240-million CAD) round into AppDirect in 2020.
RELATED: AppDirect eyes rising energy demand with acquisition of Broker Online Exchange
This week, La Caisse announced a five-year climate plan that includes a planned $400 billion in climate action investments by 2030 as it continues to decarbonize its portfolio. The pension fund claims it has cut the carbon footprint of its $473-million portfolio in half since 2017.
Like BOX, DNE Resources will continue operating as its own brand and retain its customer base, AppDirect said. With the acquisition, DNE customers will gain access to AppDirect’s suite of technology services, including BOX’s My Service Cloud platform.
AppDirect has made acquisitions a key part of its business strategy, as the DNE purchase marks its sixth known purchase since the beginning of 2023. The company told BetaKit it expects its gross revenues to cross $1 billion USD ($1.37 billion CAD) in the next two years.
Based in San Francisco, AppDirect has offices in Montréal and Calgary. It was co-founded in 2009 by Canadians Daniel Saks and Desmarais, with backing from the Desmarais family, one of Canada’s wealthiest and most influential families. Via Power Corporation, the family has backed Canadian tech companies such as Wealthsimple, Koho, and Borrowell.
Feature image courtesy Marcus Spiske via Unsplash.