Parity, a startup that uses AI to eliminate energy waste in multi-residential buildings, is hoping to take advantage of new rules in the United States (US) that will fine buildings that produce high emissions.
The startup just announced an $8 million CAD raise, and plans to partially use the new capital to expand both in Canada and the US.
A number of large urban markets in the US, including New York City, are enacting legislation that will set limits on emissions from large buildings in order to help combat climate change.
“The market needs a lot of education and they need to be shown that these solutions are now available.”
The New York Times reports that “nearly all the 50,000 buildings subject to the law will be in compliance for the first deadline, Jan. 1, 2024, according to city estimates. But that leaves 2,700 buildings across the city where action is needed to avoid fines — heating systems tuned up, leaky windows replaced and energy-efficient lighting installed.”
Parity has its sights set on not only New York City, but also Boston, Washington, Baltimore, and Chicago. The startup claims that buildings using its AI consistently reduce their annual carbon emissions by 30 to 50 percent and have supported the reduction of more than 5,500 metric tons of CO2 emissions to date.
Parity’s platform controls existing HVAC equipment in multi-residential buildings, and claims to deliver 20 to 30 percent in energy savings.
Wyse Meter Solutions and RET Ventures both invested in what Parity called a strategic round, which closed in July. The startup said Parity’s new investors joined existing shareholders including ArcTern Ventures in the round.
Wyse provides utility submetering and sustainability solutions to multi-residential, condominium, and commercial markets in Canada, while RET Ventures is an early-stage venture fund focused on technology for multi-family and single-family rental real estate.
“Wyse is continually searching for ways to provide our clients with access to high-quality green technology to meet and exceed their sustainability agendas – and this investment is a direct reflection of that commitment,” said Peter Mills, CEO, Wyse Meter Solutions. “We are excited about a future that brings together sustainability leaders to help customers across the country reduce utility consumption, save money, and lead greener lives.”
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Parity’s total funding to date is $14.25 million. Parity received $1.25 million in venture debt from Silicon Valley Bank in 2019, at that time stating it would use the funds for US expansion. To date, that expansion has been limited to some two dozen buildings in New York City.
The startup also closed a $5 million series A round in 2019. Currently, Parity has 18 staff and serves some 180 buildings in Toronto and New York City.
Brian MacLeod and Brad Pilgrim are the co-founders of Parity. MacLeod previously worked on a project that found a way to measure gas usage in buildings, while Pilgrim brought experience working in the US solar industry for multiple renewable energy companies.
Working for the latter, Pilgrim said that’s where he found his passion for the environment and renewable energy solutions. But the idea for Parity came to Pilgrim while he was living in a high-rise in Toronto. He said he saw the opportunity for energy savings, but not a product that fit the market.
Parity bootstrapped for its first few years, making $1 million in sales in its first year, and just under $3 million in booking and sales in its second year, before deciding to raise its Series A.
While Parity’s strategy to focus on high-emission offenders in the US may help give it an edge, Montréal startup Brainbox AI represents strong competition.
BrainBox AI raised $30 million USD overall in Series A financing within the past year to support its global expansion. BrainBox claims that its technology has been installed in over 100 million square feet of commercial building space across 70 cities and over 20 countries.
Founded in 2017, BrainBox also uses AI to help lower energy consumption in buildings.
The startup’s solution uses deep learning, cloud-based computing, and autonomous decision making to predict a building’s thermal load, which then enables the HVAC system to operate autonomously. BrainBox, as well as other companies focused on AI energy management, also stand to benefit from the new legislation in the US.
Despite the competition, Pilgrim foresees continued growth ahead for Parity in North America thanks to the investment from Wyse and RET Ventures. Nor does he view the competition as a bad thing.
“I think the industry and the market are young and ripe enough for many players to be in it,” Pilgrim said. “We look at other direct and indirect competitors as educators. The market needs a lot of education and they need to be shown that these solutions are now available, they’re working, they’re reliable. So I think the more people who are talking about it in the industry and showing that this tech works, the better it is for everyone.”
Feature image courtesy of Parity<./em>