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THE TL;DR šØ
š° Investing in Early Stage Impact Startups ā¢ City Light Capital
- City Light Capital invests in early-stage impactful companies within the education, safety and care, and environmental sectors
- City Light Capital cares about the organizations in their portfolio and the impact their portfolio companies have on the world
š¶ Infisense: An Important Company To Watch As Companies Decarbonize Through Rich Data
- Infisense provides reliable, wireless indoor and outdoor environmental monitoring through a proprietary Long Range Wide Area Network (LoRaWAN) and open Application Program Interface (API)
- According to Infisense, “80% of commercial buildings in the U.S. donāt have a centralized control system” and thus have no capacity to generate or record data
šø VC DEEP DIVE
Investing in Early Stage Impact Startups ā¢ City Light Capital
By Daniel Kriozere ā¢ is a Principal at C3, Tech Scout at For ClimateTech, and Venture Scout at Prithvi - and has an extensive network within the broader climate investment and startup community.
City Light CapitalĀ invests in early-stage impactful companies within the education, safety and care, and environmental sectors. Within the environment, they are investing in energy efficiency, food and agriculture, circular economies, smart cities/IoT, and enabling renewables onto the grid. City Light Capital has emphasized that an experienced and mission-driven team is one of the biggest factors they consider when evaluating a startup.
Fund Snapshot
- Stage: Seed – Series A
- Check Size: $50K Seed, $2-4M Series A
- Geography: US
- Lead/Follow: Follow for Seed, Lead or Follow for Series A
- Revenue/Valuation Thresholds: < $1M ARR Seed, > $1M ARR Series A.
About the Fund
Why was the fund started?
City Light Capital was started as a response to 9/11 and the events at ground zero, with the goal of investing in companies that could prevent the next catastrophe.
One of City Light Capitalās first investments was in a company called ShotSpotter. ShotSpotter provides acoustic gunshot detection that enables law enforcement to respond to, investigate and deter crime more effectively. City Light started thinking about how to prevent situations like gun violence from occurring in the first place and concluded that systematic issues like access to health care and education were inequities that, if addressed, could lead to better outcomes.
City Light invests in the climate because climate change is one of the biggest safety and security threats to all of humanity. City Light believes that climate change must be addressed from a multitude of angles in order to effect real change.Ā
What is City Light Capitalās core belief?
City Light Capital at its core is an impact investment venture capital fund. They care about the organizations in their portfolio and the impact their portfolio companies have on the world. For every startup they invest in, City Light creates an impact pro forma to quantify and measure the companyās impact. City Light Capital believes that startups with quantifiable impact are more valuable.
What domains in climate tech does City Light Capital have expertise in?
City Light Capital has expertise in energy/resource efficiency, manufacturing, smart cities/IoT, food & agriculture, demand response, and grid resiliency. City Lightās climate investments include Omnidian, OhmConnect, Xage, Circ, and Zero Grocery, to name a few.
What type of portfolio support does the team provide?
City Light Capital has a data analytics platform, called “The Machine”, that helps City Light source new companies, evaluate new companies and support portfolio companies.
Some of the ways “The Machine” helps portfolio companies is in:
- FundraisingĀ – When a portfolio company is raising a funding round, “The Machine” is able to identify investors who have previously invested in companies like the portfolio company (Based on round size, sector, subsector, stage, and valuation).
- Talent SearchĀ – “The Machine” is able to help portfolio companies find the best available talent by identifying individuals that have the best experience for the job.
- Competitive AnalysisĀ – “The Machine” is able to identify all competitors of a portfolio company, including new entrants, and provide a granular market landscape to founders
The City Light team has deep expertise in:
- Board management and strategy
- Sales and marketing
- Scale and growth
- Manufacturing
- Impact Measurement
About Investments
What is City Light Capitalās investment process and timeline?
City Light Capitalās investment process depends on the investment round.
For seed-stage investments, the team moves fast and usually has a decision in 2 weeks or less. They take a couple of calls with the founder, review the deck and financial model, and draft a memo. At the Seed stage, City Light Capital writes $50K checks.
For Series A investments, City Light creates a detailed investment memo that includes perspectives on the problem the company is solving, the effectiveness of the solution it is offering, the TAM, the backgrounds and experience of the team, a rebuilt internal financial model, regulatory headwinds / tailwinds and potential for measurable social impact through core product. In addition City Light talks to members of the board, key customers and the entire leadership team.
What would make City Light Capital consider deviating from its typical criteria?
City Light may invest at a slightly earlier or later stage if they feel like they can uniquely help a team execute on their mission, but City Light generally sticks to their criteria.
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š STARTUPS & TECH
InfiSense: An Important Company To Watch As Companies Decarbonize Through Rich Data
By John Docter ā¢ is an Engineering Analyst Fellow for a national laboratory. He's keen on saving the world through science and education.
Infisense provides reliable, wireless indoor and outdoor environmental monitoring through a Long Range Wide Area Network (LoRaWAN) and open Application Program Interface (API).
Think of a LoRaWAN as a more useful form of Wifi and an open API as a software tool to store and deliver data to businesses. Weāll define them in more detail later on in the article.
Data is needed for Decarbonizing the Built Environment
While networks and APIs can be used in many industries, the primary focus is applying the tech to decarbonize theĀ built environment.
Houses, offices, skyscrapers, really any built structure consumes large amounts of fossil fuel-generated electricity. If a real estate company, for example, has a goal of minimizing the carbon outputs from their buildings, meeting that goal requires an understanding of what is consuming energy, why, and if it is actionable to reduce that consumption. If a real estate company wanted toĀ implement an energy-efficient lighting program,Ā for example, they would want to know how much energy the new lighting is using compared to the old lighting in order to verify the efficacy of the program.
Currently, according to Infisense, “80% of commercial buildings in the U.S. donāt have a centralized control system” and thus have no capacity to generate or record data. Any sort of data gathering and informed decision making includes physically visiting each site, installing data loggers, and revisiting the site every six months to change sensor batteries and download the data. This is costly and time-consuming, and without real-time visibility, thereās no way to know if sensors fail.
A LoRaWAN and API are tools to fix these issues and help building managers make informed, data-based decisions.
Making Sense of Long Range, Wide Area Networks and APIās
The LoRaWAN, as the name implies, is a network that enables communication between installed sensors and a gateway to monitor a given parameter over long distances. A lighting sensor in the suburbs could send data to a gateway in the city, for example.
AnĀ API is a software interface that allows two computer programs to work together. Stripe is an everyday example of an API. It is a software program that bridges the gap between your financial software and the business you are paying.
In the same way, theĀ InfiSense APIĀ takes data (ex. temperature data from a warehouse) and serves it in a flexible format that can be used by businesses in any number of analytical tools.
InfiSenseās Success at Cleantech Open
InfiSense was one of six finalists in the 2021 Cleantech Open Northeast Cohort. While not a traditional clean technology, InfiSense found success through positioning itself as a key component of decarbonization, resilience, and meaningful action regarding the built environment.
With large corporations and real estate owners setting aggressive net-zero carbon goals and implementing ESG reporting programs, there is a massive push to make buildings more energy-efficient. Data is essential to these initiatives but generating it remains troublesome. Thus, Infisense has a technology, backed by Cleantech Open, that fulfills a market need.
Outlook
InfiSense is positioned to be a strategic partner to the leading firms that are tackling decarbonization but lack the data to make important decisions. After success at Cleantech Open, they are currently raising funds to grow the team, improve the product, and scale reach. Infisense provides an integral service that has been lacking in many industries and thus will be an important company to watch as carbon-reduction goals become actionable.
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