The Exchanges

Q How did this happen? How did you guys raise so much capital in such a short period of time?

A So I'll say a couple of things. The round is led by Addition. All of our existing major investors are reinvesting. So Thrive, our earliest backer, Valor, who led our Series A, Altimeter, Andreessen Horowitz, Lightspeed, Allad Gill. Um, you know, a number of other firms that have been on the cap table and investing in, in every round, and then routing other, other firms to the cap table as part of the round. So Ribbit, Capital G, Bond, Spark, Gladebrook, Positive Sum, um, Uh, and Lower Carbon, Avenir, a bunch of other firms that share our kind of long-term orientation and conviction for this opportunity. Uh, what I'll say is a couple, you know, a couple more things, I guess. One is that the business momentum is, is, uh, undeniable. We're growing incredibly quickly. Uh, you know, we're adding customers on the order of 30% month for a month, doing millions of dollars a month in revenue. Um, we've got a more demand than we can serve. We've got thousands of customers on our waitlist and a, a multi-month backlog. Um, and you know, the, the business is ramping in a way where capital allows us to unlock the next phase of growth. Um, and you know, as you can see, given you're standing, uh, clearly right in front of our first factory, uh, we're making investments today that will help us scale, uh, into the future on a five and 10 year plus time horizon. So, um, you know, our business is …

AI assessment note: “business momentum is, is, uh, undeniable. We're growing incredibly quickly.”

Q worked across finance, and then you and Justin came together through his time at Anderil. Can you talk a little bit more about how you guys came together, how you got conviction on this? I know we already talked about this in our first podcast together, and you guys have a really great explanation, but could you share more about how you came together and the opportunity that you saw?

A Yeah. So, you know, I've been studying this kind of energy paradigm shift for, you know, three to four years prior. So I started my career at Blackstone, a big private equity firm in New York, and I kind of looked at opportunities in the space there. And then at Thrive, I kind of picked the thesis back up and started studying the battery value chain. And the way I would describe the paradigm shift very simply is the last five decades of energy have been defined by coal and then natural gas. And the next five decades of energy will be defined by solar and battery storage. And by the way, it has nothing to do with, you know, ESG or climate change or anything like that. It has everything to do with cost, right? So the, the lowest marginal cost way to add a watt to the grid, to add a megawatt will be solar and storage. And that kind of clicked with me in 2018, 2019 when I was at Blackstone and, and really stuck with me. And then, um, when I was at Thrive, we made, you know, large investments in SpaceX and in Anduril. And I got to, you know, see those companies from up close and it was a pattern match. It was like, oh, wow. Um, You know, what SpaceX did to aerospace, what Andrew did to defense, no one has done to energy, right? If you look at the energy industry, it is this kind of sad combination of the largest and least innovative companies in the economy. They're not engineering …

AI assessment note: “when I met Justin, I realized like, this is the person I was looking for”

Q And I'm curious who is someone that has. Shaped the way that you think as a founder?

A Honestly, um, I, I've learned more from my team, uh, than any one person outside of the business. I've learned a ton from, from, you know, my, my dad, obviously I've learned a ton from, from Josh. Uh, I've learned a ton from just, you know, admiring and kind of analyzing and observing other CEOs and founders throughout history or folks that are operating today. But the, the, the strongest learnings have come from Justin and Jared and Dana and Cole and Dino and the rest of our team here. We've got some incredibly talented operators that have Lots of experience, right? They've scaled businesses from small to big. They've worked on, you know, safety critical systems. They've run massive, you know, a hundred person teams. Um, and we're in the trenches together every day. And so the feedback loops are really tight and, you know, we're constantly, you know, I think we have a, we have a very flat culture. Like, you know, my desk looks like the intern's desk. I park with the intern parks. Like we don't have a shiny corner office thing. We're like, You know, I sit and eat the same lunch with the same people at the same picnic table in the backyard. Right. And so do all of our leaders. And so we have this very kind of like, you know, um, you know, you're out of college engineer. Uh, I say something dumb in a meeting, like that engineer calls me out and they're like, Zach, you're wrong. T…

AI assessment note: “the strongest learnings have come from Justin and Jared and Dana and Cole and Dino”

Q It's so fascinating and impactful. I'm curious, as you mentioned with this funding, you're gonna be hiring out, but like, what is the process for that? Like, how do you see the next couple milestones that you need to hit? And like, what are the teams underneath it that you have to fill out?

A Yeah. So, I mean, you're standing in front, standing in front of, uh, base factory one, uh, which will be the site of our first custom manufactured, uh, base battery. I mean, it's happening behind you right here. Some of our, our modules going out for testing. Um, so the next phase of the company is really landing our custom hardware, becoming the fastest deployer of battery storage in, in the world at the lowest landed cost in the world, right? Those are really the two kind of operational North stars of the business and every team will be working on that. So on the hardware side, it's, Developing the technology, working on our next generation product, working on some future products that we're not yet ready to talk about, but we'll be able to soon, which is all kind of pointed towards the, the broader North star of affordable, reliable power for all. Uh, on the software side, it's managing the network to, um, make best use of these hundreds of megawatts and very soon gigawatts of capacity that we have on the grid. It's building the consumer facing software. It's managing all the internal processes to make our system more efficient. And then on the, on the go to market demand side, you know, this one is really exciting, I think, which is building the first beloved branded energy, right? I mean, you've never heard someone say, I love my power company and we got to change that, r…

AI assessment note: “the next phase of the company is really landing our custom hardware”

Q I reached out to some of your investors for some questions for you, and one of them is, of all the investors who backed you, one, one of their names starts with E and ends with LADD, Who is your most favorite and most helpful investor?

A A lot is definitely the most handsome. Um, we, we, uh, We, you know, you, you can't, you can't pick favorites here. Um, we spend a lot of time with our, our board, you know, uh, valor and, and, and addition. Um, the addition team is, you know, I think the, the board members and the people who lead these firms, you know, Lee in the case of addition and, and Antonio in the case of valor get a lot of the public recognition, but their teams are incredibly strong. So Roshni and Todd at addition and, and John Shulkin and Anna at, at valor and the rest of their team, uh, they. They, you know, they've got incredibly talented people that have, that have seen, like I said, businesses like this. They know how to help us. They know what problems we're going to face. Um, and they're incredibly good. I mean, Valor had a team of people down in our office for a couple of months, helping us work on some of our deployment factory scaling problems in the early days, and they were extremely helpful. Addition has been really involved in our regulated utility business, which is becoming a larger and larger focus for the company. So, uh, super grateful to have both those firms on our board. Uh, obviously very grateful to have Elad on the cap table. Um, and, uh, you know, he's, he's certainly one of our favorites too.

AI assessment note: “you can't pick favorites here. Um, we spend a lot of time with our”

Q to LA for creative stuff. Like, Texas, for me, like, that seems like The energy capital of America, if not most of the world. And so like, as you think about that and you think about, um, creating this new culture for energy there, what do you think are the like foundational principles that you're trying to instill for setting this new, I don't know, this next generation of energy?

A I think it's that, um, you can do really ambitious things and, uh, you can work on large scale projects and you can build factories. Um, and you can, you know, bring new products to market with unique business models and you can take risk and you can win. Um, and, and, you know, I think that in software world, you, there's a lot of downside protection and kind of, um, you know, it's, it's, it's, um, you know, these businesses are, are largely not very capital intense. Um, and you often see, you know, founders start a company and they try something that doesn't work and they start another company, try something that doesn't work. And then, you know, I think that's less Prevalent in capital intense hardware manufacturing operate. Like it takes 10 years to get the business off the ground, right? Like we, yeah, we've had a nice, you know, two and a half year run to get started, but like we're kind of, this is still like the, the opener to the, to the main, to the main event, right? Like we're just getting started and to build something of, you know, at scale in the energy industry. And, you know, we talked about the billion dollar ante, right? To like actually play In the large, it kind of on the biggest stage. Um, it takes a bunch of time and a bunch of capital and a bunch of, you know, damn hard work. Um, and so I think that, you know, that mindset of like taking big swings, doin…

AI assessment note: “you can do really ambitious things and, uh, you can work on large scale projects”