For venture capitalist-turned-founder Jason Massey, Ndustrial’s recently announced $18.5 million funding success is a full circle moment.
Massey, long before his investment career in Silicon Valley gave way to his dive into entrepreneurship in his home state of North Carolina, was quite familiar with one of the round’s lead investors, Swiss industrial giant ABB.
Massey, who lives in Mebane, said in high school and in college, he used to work at the GE plant that ABB bought in his hometown.
He wasn’t expecting a multi-million dollar strategic investment when the Ndustrial team reached out to AI’s electrification services unit. But ABB’s venture capital arm quickly came calling.
NDustrial's technology helps industrial companies optimize what it calls a crucial metric of energy intensity — the amount of energy, emissions and cost required for one unit of production.
Massey said the investment, which also included GS Energy and existing backers such as Clean Energy Ventures and Engie New Ventures, will help propel the company’s building growth and further enable it to pursue new opportunities as the world – and Wall Street – start to wake up to the climate challenges it’s facing.
The marriage
“When you do a round like this with strategics, it’s kind of like a marriage,” he said of the funding round, the firm’s Series B. “You want to make sure you get it right, not get into the hype cycle.”
And as a former venture capitalist with Sands Investment Bank on Silicon Valley’s acclaimed Sand Hill Road during the dot-com bubble, he knows how terminal the hype can be.
“Having been a former VC … I’d say mostly people haven’t been through a cycle like this before,” he said.
Sky-high valuations gave way to closed-up coffers in recent months. Some of his peer startups had to either make do with their current funding or face the possibility of raising rounds at lower valuations altogether. Massey said the $18.5 million (which includes a higher valuation) is reflective of the firm’s pragmatic approach and due diligence when it comes to investors – many of whom have supported the company through multiple rounds.
He also credits the trends – how companies, Wall Street and otherwise, are increasingly aware of the need to track their climate footprint. About 30 percent of its business is overseas, where many of the regulations that have yet to be implemented in the U.S. were conceived.
Regulations coming
Earlier this year, the U.S. Securities and Exchange Commission put out a set of rules many in the industry saw as watered-down. While the new regulations require public companies to disclose greenhouse gas emissions, they stop short of forcing them to also report emissions from their supply chains and end-users. The rules will also not require companies to report on indirect emissions, such as distributing goods or those tied to business trips.
But Massey sees additional regulation ahead, and his firm isn’t waiting on regulators to act before ensuring its technology can make such data collection seamless.
Many companies pushed back against the broader requirements, fearing such data would be hard to track.
Massey calls Ndustrial a “painkiller” for the data problem.
“Our philosophy there is not to wait for [regulations] to happen — it’s to go ahead and start doing this, become the standard, help drive the standard, show the market place this is a good thing,” he said.
Massey said it’s not as hard as CEOs think to be compliant with the initial vision of SEC climate disclosures, provided they have a seamless way to access the data through platforms like what Ndustrial is creating.
“You don’t have to sacrifice shareholder value to do a good thing or do the right thing,” he said.
He added that he’s confident companies across the globe will come to that way of thinking – eventually.
Part of the round will go toward company growth, building out the sales, marketing and customer success functions at its new office in Downtown Raleigh. Right now, the company is at 42 people, intentionally growing slowly to avoid the pitfalls of tech companies who have faced layoffs in recent years.
The money will also go toward capitalizing on different verticals. Cold storage has been the sweet spot for its technology since inception, but lately manufacturers – including those in advanced manufacturing - of all sorts are starting to buy into the platform.
