Swtch Energy is charged up over securing $16.5 million CAD ($13 million USD), and is preparing to use the fresh funds to make inroads into the United States market.
The electric vehicle (EV) charging and management startup secured $12.7 million CAD ($10 million USD) in a Series A round led by the venture capital arm of Aligned Climate Capital. Swtch also received a $3.8 million CAD ($3 million USD) credit facility from Silicon Valley Bank.
“It becomes quite a financial motivation to own an EV for more moderate income households because now they’re not paying $2 a litre for gas anymore.”
Elemental Energy, IBI Group, Active Impact Investments, and Pacific Reach all participated in the Series A raise that closed on April 7.
Swtch plans to use the money to expand its EV charging solutions to multi-family buildings across North America.
“With rising gas prices, more and more Americans are looking to go electric,” said Peter Davidson, CEO of Aligned Climate Capital. “But that means we need more charging infrastructure, and we need it where people live. We are proud to invest in a company that makes it easier for people to go electric, save money, and be a part of the climate solution.”
Carter Li, co-founder and CEO of Swtch (the startup’s other co-founder is Laura Bryson) noted Aligned is the first US investor for Swtch, and comes as the startup looks toward expansion in the States. Brendan Bell, Aligned’s COO, is joining Swtch’s board.
Li said he believes Bell will bring help on both the policy and business sides along with insight in the US market. He pointed out that Bell was the director of strategic initiatives for the US Department of Energy under the Obama administration. “He can help us a lot with understanding the policies and incentives in the US,” Li noted.
Li claimed investors were attracted to Swtch because of its model of EV charging-as-a-service, which reduces the barrier of the upfront costs. Instead of having to pay $5,000 to install a charger and the associated infrastructure, Swtch charges users a flat monthly fee, and as Li said, “You’re off to the races.”
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When Swtch first began in 2016, the startup had the idea of shared personal charging stations “like an Airbnb for personal charging for different groups,” Li said. But at that time the people with the charging stations lived in the suburbs, and the people who required the charging stations lived downtown. As Li wryly noted: “The idea of people driving to the suburbs to charge their vehicles didn’t necessarily work out.”
So Swtch pivoted to working with real estate developers and property management companies to put its infrastructure directly into buildings, which Li claims makes the charging stations more cost-effective, and reduces the electrical infrastructure requirements.
“With over 75 percent of our charging stations currently deployed in multi-family buildings, Swtch strongly believes in the importance of providing equitable, convenient, and affordable charging access at home, where people need it the most,” Li said. He wants to expand Swtch’s charging-as-a-service model into more low-and-moderate income communities across North America.
“It becomes quite a financial motivation to own an EV for more moderate income households because now they’re not paying $2 a litre for gas anymore,” he opined.
Swtch claims it has some 1,500 charging stations installed in North America, largely in Canada. But by the end of 2022 it anticipates managing 5,000 charging ports in over 900 locations in all 50 US states and 10 Canadian provinces, of which over 50 percent will be in low-to-moderate multi-family buildings.
Currently the startup is in the midst of piloting a blockchain-enabled EV charging station. The pilot is meant to show how commercial building owners can accommodate the growing demand for EV charging stations while simultaneously improving the building’s energy efficiency and reducing operational costs.
The pilot is designed to help solve the issue of how to accommodate a rise in EV charging infrastructure without placing additional strain on the electrical grid.
Swtch’s vehicle-to-grid technology allows buildings to draw energy from parked EVs during on-peak hours rather than from the grid. During the pilot, a parked Nissan Leaf will store energy during off-peak hours and redistribute that energy to the building and the EV chargers in use, creating an energy flow that is cost-effective and environmentally sustainable.
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Swtch is part of the current cohort of the Clean Fight Program, a not-for-profit climate-tech accelerator supported by the New York State Energy Research and Development Authority (NYSERDA) and New Energy Nexus.
“Swtch was selected as one of just a handful of cohort companies from a very competitive applicant pool to participate in the Clean Fight program that’s focused on high impact solutions that bring the environmental, economic and health benefits of deep decarbonization to non-luxury buildings,” said Thatcher Bell, program director at The Clean Flight.
“After less than six months in the program, Swtch is already working on new installations in LMI [low-moderate income] communities in NY with two different partners in The Clean Fight, in collaboration with two other participating cohort companies,” Bell said.
Swtch is an alumnus of Communitech’s Fierce Founders program and DMZ Sales Accelerator, with the startup having won $25,000 after taking part in the DMZ’s Women Founders accelerator pitch competition in 2018. The startup raised $1 million in 2020 in its seed round.
Swtch is not alone in the EV charging space. AddÉnergie, a Québec City-based startup that creates charging solutions for electric vehicles (EV), closed $53 million in Series C funding in October, 2020. In the US, Swtch faces competition from the likes of ChargePoint, which is the largest operator of charging networks there, and Tesla, which ranks second in the market.
A bigger issue than competition is a looming lithium ion battery shortage along with other key components for EV batteries. RJ Scaringe, the CEO of EV vehicle maker Rivian, anticipates shortages in every part of the battery building process, including mining raw materials like cobalt, lithium and nickel, processing materials and building the battery cells themselves, according to a report in Protocol. A slow-down in EV production could dampen Swtch’s charge to build out its infrastructure.
Already, the rush is on to build manufacturing facilities to offset the shortages. Mangrove Lithium secured a $10 million USD ($12.6 million CAD) Series A round partly backed by Bill Gates in 2021 to address the emerging deficit of high-purity lithium needed for electric vehicle batteries.
The company will use the investment to build its first commercial-scale plant with the intention of expanding lithium refining capacity in the Western Hemisphere.
For now though, Swtch has no intentions of slowing down. The startup wants to add another 20 in the next six to 12 months to add to its staff of 34. “This equitable access to EV charging is really important to us,” Li said.
Feature image courtesy Swtch.