ESG & sustainable architecture platform Energy X completes Series B funding round successfully

ESG Sustainable Architecture Platform Energy X closed (17 January 2023) with the round at just $20.3 million, carrying on with its initial plans to avoid equity over-dilution. The round was led by the Shinhan Financial Group, Korea’s top banking and financial group.

This new equity round brings the startup’s total equity and debt funding to $41.1 million. Previously the startup raised $100k Seed equity round in March 2019 (a month after the company was founded), $3 million Pre-Series A equity round in Sep 2019, $8.1 million Series A equity round in Dec 2020, and $9.6 million debt round in March 2022.

In this round, Shinhan Financial Group’s digital strategic investment fund, managed by Shinhan Capital, and Shinhan Asset Management participated. Also, Welcome Ventures, VTI Partners, Honest Ventures, Enlight Ventures, Ljovi, and JJBM joined as co-investors.

Korea based startup Energy X is a combination of an ‘online construction platform provider’ and ‘energy efficiency technology provider’.

As online construction platform, Energy X provides services comparable to Procore (listed NYSE 2021), Aconex (acquired by Oracle 2017), and ViewPoint (acquired by Trimble 2018). Energy X is currently Korea’s #1 in online construction platform leading in traffic, revenue, valuation, assets, and equity sector. Energy X is different from its peers in online construction platform business because 1) the focus is on energy efficient buildings and carbon neutral buildings, 2) the service enables clients in any sector (unfamiliar to energy efficiency) to easily work on energy efficient buildings, and 3) most of the services are provided at free of charge.

As energy efficiency technology provider, Energy X’s peers include Enpal, which raised a $174 million Series C at a valuation of $1.1 billion in 2021, and Uplight, which received undisclosed funding at a $1.5 billion valuation in 2021. Energy X is also Korea’s #1 in energy efficiency technology provider business in terms of the number of technologies provided, the number of kinds of technologies, assets, and equity capital. Energy X is different from its peers in energy efficiency technology provider business because 1) the technology focus is not in just one energy efficiency arena but comprehensively in all energy efficiency technology arenas (energy production, conservation, management), 2) the technologies provided are both IT-based and (physical) engineering-based, 3) the technologies are completely proprietary, and 4) the technology includes post-construction, cloud-based, AI-powered building energy management solution.

Energy X was founded in 2019 by co-CEOs Sean Park and Tom Hong. Sean, leading the management and operation side of Energy X, previously worked as a tech-focused venture capital investor in Silicon Valley and Seoul. Sean also worked as a hedge fund investor at Perry Capital and served as a board member of Tapas Media (acquired by Kakao) and Soomgo (YC W17). Tom, leading the service and technology side of Energy X, previously worked as an artificial intelligence/machine learning engineer at Samsung Electronics. He co-developed the company’s biggest AI project Bixby.

40% of global carbon emissions come from the building sector. Some of these carbon emissions occur during the construction of the building, but most are emitted when the building is put into operation after it is completed. To create a sustainable future, the building itself must be carbon neutral.

Energy X applies IT and engineering-based energy efficiency technology to enable buildings to produce, reduce, and manage eco-friendly energy. In addition, artificial intelligence and cloud-based online services provide information for the building industry and its carbon neutrality, monitor and analyze data, and control, redesign, and advance technology.

Europe and the United States started the ZEB mandatory policy for new public buildings in 2018, and from 2020, the scope of mandatory ZEB is expanding and expanding the policy. In 2024, the scope will be gradually expanded to include private multi-family housing and private facilities with a total floor area of 1,000m² or more in 2025. ZEB will be mandatory for all buildings in 2050. Korea is also implementing a mandatory ZEB policy for new public buildings in 2020.

According to the world-renowned consulting firm McKinsey, the world’s construction market should be carbon neutral by 2050, but the cost is $1.7 trillion annually, about 2000 trillion won in Korean currency. With ESG disclosure becoming mandatory worldwide, the pressure to achieve RE100 is intensifying for domestic conglomerates and small and medium-sized enterprises (SMEs). To achieve RE100 for these domestic companies, Energy X provides various measures to achieve RE100, such as solar power and industrial facility energy efficiency, as services for buildings such as office buildings and factories.

Ha Hyung-seok, senior manager of Shinhan Capital, who led Energy X’s investment round, said, “Energy X is a leader in energy efficiency technology that is revolutionizing the domestic sustainable construction industry. Along with this investment, we expect to create various business synergies in the ESG field with Shinhan Financial Group.”

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