Armed with a $150 million equity infusion, Durham technology firm FlexGen is about to go on a hiring spree, according to its CEO.
But could an IPO be in its future?
FlexGen, which develops software for energy storage solutions, has secured a $150 million equity commitment from funds managed by affiliates of Apollo Global Management. CEO Kelcy Pegler would not release financial specifics, but did say it was an investment, not a buyout, and that existing backers such as Altira Group continue to have a stake in the company.
“It’s a partnership,” he told TBJ.
With this much outside capital, however, comes expectations. Investors willing to funnel $150 million into a company expect returns.
“It’s a whole new ball game,” said David Gardner, CEO of Cary-based Cofounders Capital. Gardner, who does not have a stake or specific knowledge of FlexGen, said big rounds mean bigger exit expectations – and they can come with risks for early investors, as late-stage backers often have a liquidity preference ahead of founders and early supporters.
Pegler declined to talk about the terms behind the equity infusion. Asked if an IPO could be in the company's future, Pegler said the focus right now is on expansion.
“I think right now we are laser focused on executing and expanding our capabilities,” he said. “We really are just trying to do more faster. We’re focused on driving real long-term sustainable value for the business, and I’m sure if we can deliver on those pursuits there will be optionality in our future.”
The raise has been months in the making – and presents a major opportunity for FlexGen, Pegler said.
Knowing it would be raising capital, the company cast a wide net earlier this year. And Apollo, which had been familiar with the firm for some time, came calling with the best offer, he said.
The infusion is about doing “more faster,” he said. And that means hiring top caliber technology talent. Right now, FlexGen is at about 60 employees, primarily in Durham. In the immediate future, the firm will be hiring “several dozen” new team members, Pegler said. The goal is to keep up with the growth that’s coming as the demand for battery storage increases.
“Month to month we are seeing a 300 percent increase in project count versus this time last year,” Pegler said. “This capital will allow us to bring more of the smartest minds to the battery storage space at FlexGen.”
Pegler, a serial entrepreneur in the solar space, joined the firm earlier this year, attracted to the industry’s growth metrics. He saw battery storage as going through the same maturing process that solar went through a decade ago, he said.
Pegler declined to release revenue numbers, but said FlexGen is in an “explosive growth phase.”
In addition to Altira, the founding investment group led by Jerry Miller and Mark Dreyfus also continues to have an equity stake.
FlexGen was founded in 2009 and, according to the firm, has supported energy storage systems deployments across the U.S. and internationally.
Apollo Global Management, which has $472 billion of assets under management, is no stranger to the Triangle. The firm owns Shutterfly, which purchased Durham-based Spoonflower earlier this year in a $225 million deal.
