Exporting new products and services like energy-management systems for businesses has many challenges, from regulatory hurdles to the complexities of selling the technology in distant markets.
For Tomas van Stee, founder and chief executive officer of EnPowered Inc. of Kitchener, Ont., helping large energy consumers optimize their electricity usage is lucrative; it also brings benefits for society by simplifying and speeding up the adoption of clean technologies that save money, resources and the planet, too.
“We’re enabling the cleantech revolution,” says Mr. van Stee, 30, who started the private company in 2015 when his parents’ dairy farm in southwestern Ontario got locked into a money-losing electricity contract by so-called “door-knockers” promising savings. A recent business school graduate working as a management consultant at the time, Mr. van Stee grouped such small businesses to get better rates from power companies.
Today, EnPowered focuses on large commercial and industrial customers, using artificial-intelligence modelling software to help them save on energy. And he’s on a larger mission to fight climate change through a platform that encourages those users to spend a percentage of the savings they capture to build green-energy systems that cost them nothing upfront.
“Cleantech is a multi-trillion-dollar space and it’s going to be changing the world in the next 10 to 20 years. We really hope so; otherwise, we’re in trouble,” he says. “But there are shockingly few innovative startups in the space. And so I knew there was an opportunity here.”
Mr. van Stee, who has a math and actuarial science background and calls his team at EnPowered “energy nerds,” says the company’s software does “game theory on the electricity markets,” forecasting price spikes in energy rates and helping its customers avoid them. They can do this by temporarily switching off building machinery, for example, or by drawing power from large energy-storage battery facilities, known as virtual power plants, that EnPowered has access to through partnerships.
The company has collectively saved its customers more than $184-million to date, Mr. van Stee says.
These organizations can plow 80 per cent of those savings into lighting, building automation, solar or battery backup systems – hardware projects financed by third-party lenders, saving them even more money and reducing their emissions in the long run.
He initially bootstrapped EnPowered to $500,000 in revenues, and today it’s backed by seed financing that is pushing the company to rapidly expand into new markets. “Once you’ve taken venture-capital money, you have to be ambitious; you’re not allowed to slow down,” Mr. van Stee says.
In its scale-up phase, the company has moved beyond Ontario – where it still does 90 per cent of its business – into Ohio, New York and Texas. It plans to be in half of the U.S. (where regulations suit its model) by the end of 2023 and move into the U.K., Europe, Australia, New Zealand and Japan within five years.
“That would be roughly a third of the global energy market that we’d be able to access,” he points out. Each new market requires the company to post significant collateral, which it’s done through the backing of Export Development Canada (EDC), and to comply with complex regulations.
Mr. van Stee says other challenges for EnPowered as it expands internationally include language barriers, currency fluctuations and the fact that it will need flexible working hours, with energy markets operating 24-7.
He’s up for the challenge, complaining that many Canadian companies “think too small; we tend to wait to export way too long … but then we end up getting our lunch eaten by U.S. competitors.”
Brandon Schaufele, a professor of business, economics and public policy in the Ivey Business School at Western University and director of the Ivey Energy Policy and Management Centre, says potential exporters of such products are put off by regulations and hurdles that vary from place to place, “which means you’re reinventing the wheel for every jurisdiction you want to enter.”
EnPowered’s model encourages large energy users to become more efficient, Dr. Schaufele says.
“Investments in energy efficiency pay off in the long run, but we see under-adoption of them in general. If this can speed the adoption of energy efficiency, it can reduce our energy demand.”
He adds that exporting such a platform to countries like the U.S. that use fossil fuels to generate electricity is especially helpful. “If we can reduce the reliance on coal-fired power, we’re going to reduce global emissions.”
Mr. van Stee has seen a “noticeable change” among customers who initially just focused on the money his systems would save them and “are actually starting to truly care about climate.”
EnPowered currently has 52 staff working in remote teams divided into three areas. One is made up of product developers, designers and data scientists; another is a group of account executives and business-development reps focused on sales and marketing; a third team works on operations, or what he describes as “Wizard-of-Ozing the magic behind the scenes.”
A legal analyst works full time on decrypting licensing requirements state-by-state and will next focus on such nuances country-by-country.
Mr. van Stee suggests that exporters in Canada should “look for help where it exists.” For example, he says without the support of EDC, “we almost certainly would not be expanding nearly as fast as we are in the U.S.”
The company has additionally gotten funds to help with its expansion from Canada’s Tech Network, a federal centre of excellence in commercialization and research. He also explains that EnPowered often chooses new markets by moving with existing customers with sister facilities in those jurisdictions.
EnPowered is creating a platform similar to what Shopify has done in online retailing “so that thousands of other companies can build in the world of cleantech and can actually start fighting climate change,” Mr. van Stee adds. “This market is ridiculously complicated; you need a few companies to manage that complexity so that it’s easier for everyone else to start plugging into it.”
Editor’s note: The name of Canada's Tech Network has been corrected in the online version of this article.