D.C.’s Arcadia has raised a gargantuan $100 million in new funding, following back-to-back acquisitions earlier this year — in its latest push to further dominate the renewable energy space.
The Series D funding round was led by New York’s Tiger Global Management and the Park City, Utah-based Drawdown Fund. New investors that participated include Rockville’s Camber Creek; Wellington Management and MCJ Collective, both of Boston; Reimagined Ventures of Evanston, Illinois; and Magnetar Capital founder Alec Litowitz’s family office. Existing investors Energy Impact Partners, G2 Venture Partners, Inclusive Capital and BoxGroup also contributed to the raise.
The $100 million comes on top of $21 million Arcadia, a clean energy startup, quietly secured in December 2020, bringing its total lifetime funding to $180 million, the company said Wednesday.
“We are in the intersection of two of the biggest markets, sustainability and software,” Arcadia CEO Kiran Bhatraju said in an interview. “This fundraise is really going after what I think is an ever-growing market.”
Arcadia has a few big intentions for the funding:
- Add new customer classes: Arcadia has been focused on residential customers since launching in 2014. It’s now opening up to retail, small businesses and other commercial customers. That expansion represents a big chunk of what the funding will support.
- Keep hiring: The company is adding to its team, which counts 176 employees across the company including 102 based in the D.C. area. It has already tapped some new executives, including John Rucker, an alum of Rent the Runway, Yahoo and General Assembly, as chief financial officer; and former Opower exec Nancy Hersh as chief data officer. Arcadia is now hiring across the board, with focuses in engineering and data, product design and other tech roles, as well as for its regulatory team.
- Expand in community solar: Arcadia manages community solar projects, which enable anyone to get cheaper and cleaner energy at home — for instance, if they can’t afford or install solar panels because they rent or their roofs don’t allow it. So in the roughly 15 states that allow third parties to build power plants for residential customers, Arcadia’s software manages the billing and user experience, Bhatraju said. “In every single state that we manage these projects, it’s a guaranteed cheaper-than-your-local-utility price for power, between 5% and 10% cheaper,” he said. “It’s the fastest growing segment of solar; it’s also the most equitable.”
Arcadia has crossed the 500-megawatt mark (one megawatt can power roughly 250 homes). So by the end of this year, the company expects to have more than 100,000 customers in community solar programs. And it plans to eventually get to millions, continuing to work with federal and state authorities to expand access to community solar, as Virginia did this year with new legislation.
“More and more people want access to clean energy,” and community solar “is the fastest growing segment of solar in the country,” Bhatraju said. That’s why Arcadia is doubling down on the space, already managing nearly 30% of the entire market, he said.
The business plans to bring to market new data products over the next year “that relate to what I think is actually a really big issue in energy, and it’s the fact that it is very hard to ingest and normalize data across the utility market: Most people have a meter in their home or in their building and a lot of that data is very siloed, so we’re working on products to sort of unlock that,” Bhatraju said, declining to share specifics at this point.
Arcadia joins a growing list of D.C.-area ventures to secure at least $100 million in a single round this year. That group includes D.C. online education startup Class Technologies Inc., Bethesda health-tech startup Aledade Inc., Arlington risk management startup Interos Inc., D.C. student loan startup MPower Financing, Gaithersburg biopharma Sirnaomics Inc. and McLean identity management startup ID.me. Some clinched the coveted unicorn status with those raises.
Arcadia declined through a spokeswoman to share details about its valuation following the latest round, or specific revenue figures. But, she said, the company has seen five-times revenue growth from 2019 to 2021.
It follows a period of high activity for the 7-year-old startup, an Inno on Fire winner of 2020. In April, Arcadia acquired San Francisco’s Nanogrid Technologies PBC, which positioned the local company to move deeper into the electric vehicle arena and other connected-home devices. That came just a month after Arcadia snapped up Houston’s Real Simple Energy in March, opening up the Texas market to the D.C. firm.
The company has “mostly been opportunistic” with those deals, Bhatraju said, adding: “as we see things that are interesting us or pull forward the product roadmap, we’ll definitely be looking.”
