This month, energy-efficiency startup Opower was named one of Deloitte’s Technology Fast 500 in 2013.
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According to the Deloitte survey, the fast-growing Arlington, Virginia-based startup has seen revenue growth of 10,463% over the past four years. Today, the company says it is making moves to continue its expansion into Asia, having already established offices in Singapore and Japan.
CEO and co-founder Dan Yates declined to confirm or deny a recent Wall Street Journal report of a possible IPO, saying the company’s policy is not to speak about future financing. However, he says right now the company is focused on establishing itself in Asian markets.
Yates, who recently returned from a conference in Singapore, predicts that by 2020, more than two-thirds of all energy generation and consumption will be in Asia.
“So this is the future of the energy market, and that’s why we need to be there,” says Yates. Opower, which was founded in 2007, has raised $65 million from VC firms including New Enterprise Associates, Accel Partners and Kleiner Perkins Caufield & Byers.
How Opower Works
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While the energy industry has attracted many entrepreneurs, Yates and his co-founder Alex Laskey say they came at it from a different angle.
“Everyone else was looking at the supply side of the equation … and we realized there was another half of the equation. What about the demand side? What about helping people to reduce energy?” says Yates.
With this idea in mind, Yates and Laskey decided they could have the largest positive effect on the environment by educating consumers through their energy bills.
“From that seed of an idea we’ve built a whole technology platform to help utilities transform the way they communicate with customers,” says Yates. Today, Opower partners with nearly 90 utility companies who send Opower billing data and information to provide feedback about energy use to consumers.
“We precede it with something like, ‘Hey, this summer you’ve used 25% more energy than the average of similar homes in your area. Here are tips on air conditioning, because we actually see that while you’re using 25% overall, we think that 50% of your excess usage is coming from your air conditioner,” says Yates, detailing an example of an Opower-fueled communication from a utility to a customer.
Yates says this strategy allows Opower to capture the “low-hanging fruit,” helping the average customer save 2% to 3% off their bills. He says more involved customers, who can save as much as 10% using Opower recommendations, can shave hundreds of dollars off their energy bills.
In total, Yates says the company has helped energy consumers in the U.S. save approximately $200 million.
Achieving Fast Growth in a Slow Economy
While the company won’t disclose exact revenue figures, business appears to be going well for Opower, as indicated by the 10,463% revenue growth cited by Deloitte. Additionally, the company has established five offices, in Arlington, San Francisco, London, Singapore and Tokyo, and has more than 400 employees on the books, with dozens of open positions listed on its website.
While Yates attributes some of the company’s success to luck and teamwork, he says focusing on results has been crucial to Opower’s adoption by utility partners.
“We’ve always focused on delivering a very clear rate of return -- a return on investment -- for our customers with our programs. So we exactly measure the impact of each of the programs that we deploy for our utility clients, and we can prove that when we deliver a program for peak reduction, for example, that we really do reduce peak,” says Yates.