Investment Notes: National Renewable Network (NRN)

Investible’s Climate Tech Fund led NRN’s AUD 1m pre-Series A bridge, with participation from Electrifi Ventures and other angels. This marks our first investment in a company we met and worked alongside at the Greenhouse Tech Hub. In these investment notes, we will share insights into why we invested in NRN and chose to back Alan Hunter, Sam Fitz-Roy, and the NRN team.

The lights are (almost) always on in the NRN office  

One of the fantastic things about working out of Australia’s largest climate tech hub and co-working community at Greenhouse is that we get to see other climate tech companies in action. As one of the earlier tenants (and backers of the space), the Investible team has seen numerous startups move into the dedicated offices and hot desks, including the team at NRN.

While we had previously connected with Alan, the CEO and founder of NRN, it wasn’t until we found ourselves in proximity with him and NRN that we saw the consistently high cadence and effort being undertaken by the entire team.

To quote Les Schwab, the 'success of any company is in direct proportion to the ability and motivation of its people, and that fits anything.' As outsiders looking in, it was clear that the NRN team showed up, put in the work, and were unquestionably motivated. Pairing this up with an endorsement from Danin Khan of Electrifi Ventures and the support of one of our Investible Climate Tech Fund advisors, Dean Travers, we were excited to learn more.

Energy retailers are falling victim to the 🦆 duck curve

Energy retailers are growing increasingly wary of behind-the-meter (i.e., rooftop solar, storage batteries, etc.) solar penetration, which reduces demand for grid electricity in the middle of the day. As the system load decreases, so do the energy retailer's revenues.

Despite household batteries being forecast to play a key role in the fight against climate change, only 180,000 residential batteries were installed by the end of 2022 in Australia, which is comparatively small (~1.6%) compared to the number of solar panel installations in the same period. At-home battery systems remain unaffordable for the vast majority of Australians, with a commonly sized battery costing enough to push the payback period for household batteries to over ten years.

Without batteries, as the number of behind-the-meter solar systems increases, it leads to inherent challenges for Distributed Network Service Providers (DNSPs, or poles and wires companies such as Ausgrid, Citipower or Energex) whose job it is to maintain voltage on the network.  

Most importantly, with Australian households currently bypassing energy retailers for solar and battery solutions, the energy retailers are facing an existential crisis that arguably can only be solved by offering value to consumers that captures revenues during the middle of the day while the sun is shining.

Validated business model with long-term lock-in revenues and value described as a “real pain killer” by customers

NRN has developed a unique model for democratising all Australians’ access to renewable energy assets, aligning energy retailer and customer objectives for the first time. The company has a vision of changing how consumers will access solar and batteries for their homes in a fast-approaching future.  

With all partners incentivised to join the National Renewable Network, signals of a growth flywheel are beginning to emerge.  

This model has proven to be a win-win-win for all parties involved and can be extended to wider behind-the-meter applications, including the addition of heating, cooling, cooking, hot water, pool pumps, smart appliances, and even electric vehicles to customers as part of the NRN offering.

Strong founder who has built a world-class team with deep industry expertise

Throughout the due diligence process, CEO and founder Alan Hunter came across as a swift decision-maker, a strong communicator, coachable, and, when talking about his journey to-date and overall ambition, a natural pioneer. When you walk into the NRN office, it’s clear that Alan has surrounded himself with a world-class team of engineers, data scientists, energy experts, and strategic advisors, who have substantially grown and transformed the business since its inception.

Before NRN, Alan started Splend alongside Chris King. This car leasing company leveraged the emergence of EVs and Uber Drivers to create a place that provided eco-friendly and affordable cars to on-demand drivers. Alan departed the business once it had a global presence and was on the road to success. He has been driven towards the mission of making solar and battery combinations affordable to households around Australia.

In recognition of his contributions to NRN as Head of Data and VPP, Sam Fitz-Roy was promoted to co-founder status. With expertise spanning data science, finance, and energy systems, Sam is responsible for building the back-end that makes the NRN value proposition possible.

NRN is ramping up for a compelling Series A

NRN has a clear strategy for Series A in late 2024. This pre-Series A bridge enables NRN to unlock additional financing to build their book quicker, deploy a significant amount of assets, and launch with their first tier 1 retailer, Alinta Energy — one of four Energy Retailers who now offer energy plans that include Solar and battery without the cost.  

Investible looks forward to joining Alan, Sam, and the entire team at NRN on their journey as they work toward enabling all Australians to access affordable renewable energy.