Backed by a fresh round of $13+ million, Geostellar’s analytics and management tools are making energy efficiency a reality for consumers and businesses
A Q&A with Geostellar founder and CEO David Levine. The Reston, Virginia–based company was founded in February of 2010 and raised more than $13 million in new funding at the beginning of June. Investors include Flash Forward Ventures, NRG Energy and the State of Maryland.
SUB: Please describe what Geostellar is, and the value proposition you bring to the solar energy market.
Levine: Geostellar is an energy advocate for the property owner—the homeowner or corporate facilities manager. We provide the tools and data to help them make the decision whether to go solar, what the rate of return would be if they invest in an energy efficiency program, and which products and services would bring them the most value.
SUB: Who are your target users?
Levine: Anyone who owns property in an area of high utility rates, who wants to save money and contribute to a better world at the same time.
SUB: Who do you consider to be your competition?
Levine: Right now, our competition comes from the national solar finance companies who are marketing directly to property owners.
SUB: What differentiates Geostellar from the competition?
Levine: Our competitive advantage is that we give property owners a choice of financing, installation and equipment options, and the tools to optimize the system for their needs.
SUB: When was the company founded and what were the first steps you took in establishing it?
Levine: We were founded on February 22, 2010. The first thing I did was get together with Butch Deal, our VP of Systems and Security, Jeremy Dobrzanski, our lead engineer, and Breighton Dawe, our CTO, at a juice bar, coffee and sandwich shop in Shepherdstown, West Virginia, called Mellow Moods to talk through what we were going to do. Our initial plan was to build more of a generic geospatial analysis engine that could help with wind, solar and hydro energy production, as well as biofuels, and also limit the impact of hydraulic fracturing on communities in shale plays. But then only a few weeks later I got a call from a former customer from when I worked as the VP Geospatial Solutions for Sewall, an engineering and natural resources firm in Maine, who had left a wind company and joined Community Energy, which was developing both wind and solar projects. He needed help with solar mapping, and we found it was the fastest growing part of the energy sector.
We held a conference call with the solar developers at Community Energy, and an hour later we had on the white-board a model for our platform. We were going to build a simulation engine that accounted for sunlight, slope, orientation, infrastructure, policy and economics to pinpoint the best locations for solar on roof and ground sites.
By May 2010 we had raised almost $100K in angel funding and by July 4, 2012, we had two customers: Community Energy and AES Solar. It’s certainly been a roller-coaster ride, but there has been consistent demand for our platform and support from the market. The biggest challenges were all technical, not market-oriented, which is great for a startup.
SUB: What was the inspiration behind the idea for Geostellar? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Levine: There was definitely an ‘aha’ moment. I was the VP Business Development at Lanworth, in my mind the first big-data geomatics company, selling our acreage and yield reports into the CPG (Consumer Packaged Goods) industry. My clients were companies like Kraft, Pepsi and Smithfield.
In a meeting with the traders at Dean Foods, the head of purchasing mentioned that they have to hedge a lot more energy purchases than soft commodities, and he wondered if we could come up with a method of applying big-data to hedge against coal, oil and natural gas prices. That got me thinking about a platform for renewable energy, which I knew a lot about from my geospatial work at Sewall. I realized we could automate the consulting, engineering and siting work we had been doing at Sewall and come up with just the product needed by Dean Foods, which has refrigerated trucks, warehouses and factories all over the country.
SUB: What have the most significant obstacles been so far to building the company?Levine: The biggest challenge is keeping a team of really brilliant and creative people focused on solving a narrow range of problems at a time. I’m constantly reminding all of us that we’re not boiling the ocean, we’re just making tea. This leads to the biggest obstacle – what we’re doing is very specialized, and finding talent is not easy, particularly when you have no money. Now that we have significant funding, that should be easier. We also had early obstacles around data processing—what we do is very compute intensive, and we kept burning out solid state hard drives, which we needed for the i/o speeds. We had no air conditioning in the basement of our building where the machines were, so we had some interesting workarounds. Now we’re building out an efficient processing platform, so that should go a lot smoother.SUB: You recently raised over $13 million in new funding. What are your plans for the funds?
Levine: We’re using the money to go straight to the property owner and provide them with insights on their home. In the past, we had software and data for solar developers, to help them target their marketing, design systems and run financial analyses. To reach downstream to the home or office, we need a simpler interface and more robust back-end systems. We also need broader geographic coverage, and some of our source-data is very expensive.
SUB: Do you plan to raise more outside funding in the near future?
Levine: No—we closed this round about a month ago, and I can’t believe how much time I have to work on product, talk to customers and generally be productive. For the past three years, I’ve put 85 percent of my time, at least, into raising money. We&
rsquo;ll be making significant progress over the next year to 18 months before we talk to any other possible investors.
SUB: What are your goals for Geostellar over the next year or so?Levine: The primary goal is to deliver the market-leading product for energy management services, used by homeowners and corporate facilities managers everywhere.
Geostellar – www.geostellar.com