Legal & General, SYSTEMIQ and Modern Energy invest in Upside Energy
22 Dec 2017
Legal & General Capital, the principal investment arm of Legal & General Group, and SYSTEMIQ, a purpose driven investment and advisory firm established in 2016 to tackle system failures, have co-led the Series A investment in Upside Energy (“Upside”).
Upside is a Manchester-based company that has developed a cloud platform that uses advanced algorithms and artificial intelligence to coordinate connected devices to deliver valuable flexibility services to the energy system.
The UK’s energy system is in transition, with low cost renewable generation technologies now capable of meeting a substantial portion of consumer demand. In order to integrate a larger proportion of intermittent renewable power from wind and solar, and adapt to new power demand patterns at low cost, there is an increasingly urgent need to unlock demand-side response.
Upside has developed a powerful software platform that connects suppliers and users of energy by harnessing latent capabilities of connected devices. Capable of providing core services to transmission and distribution network operators, energy suppliers, battery owners, renewable energy generators and providers of commercial and residential property-based solutions, it enables customers to save on their energy costs or earn revenue by changing their demand curve to solve imbalances for the Grid. This could include many of Legal & General’s own property-backed businesses.
Following three years of development and testing, including collaborative studies with the UK government, universities and global equipment manufacturers, the Upside cloud platform is in its commercialisation and scale-up stage, and is being rolled out to the wider market.
SYSTEMIQ and Legal & General Capital are acting as lead co-investors in Upside’s Series A fundraise. They have invested alongside Modern Energy, a North Carolina-based energy asset management firm, Bulldog Innovation Group, a Yale-affinity early stage venture capital firm and a group of individual investors. The capital will be used to expand the team in order to further develop the platform’s capabilities, accelerate commercialisation, drive operational deployment, and to realise Upside’s vision for a new, cleaner and more equitable energy system.
Jeremy Oppenheim, Founding Partner of SYSTEMIQ, said: “SYSTEMIQ has set out to invest in disruptive early stage ventures with system change potential across energy, land use and the circular economy. Our strategy in the energy sector is shaped by our leadership of the Energy Transitions Commission, whose analysis shows that half of the carbon emissions reduction required by 2040 to put the world on a well below 2°C trajectory will come from the combination of accelerated power decarbonisation and increased electrification.
“Advanced demand-side response systems such as Upside’s can enable a much faster and more substantial transition to a renewables-based grid by utilising smaller assets in flexibility provision, and smoothing the market by allowing faster response times and inter-utility provider (and consumer/asset owner) trading. We are therefore extremely excited to announce our first investment in Upside Energy, and look forward to working with the management team and our co-investors to make this business a success.”
John Bromley, Head of Clean Energy at Legal & General Capital, said: “Alongside investing in the creation of long term clean energy generating assets in solar and onshore wind, we are investing in complementary technology that together will be essential in delivering an affordable clean energy system to UK consumers. I am therefore delighted to be working with Upside Energy and some of the UK’s brightest talent in software development, united by a mission to make clean, affordable energy, available to all.
"We aim to create long-term social and economic value by investing in the future of our energy system. Ultimately we will enable UK consumers to enjoy affordable clean energy that is owned and financed by their UK pensions, savings and investments.”
Ben Abram, Managing Director of Modern Energy, said: “At Modern Energy, we believe the proportion of energy produced worldwide by Distributed Energy will increase dramatically over the next several decades. Upside Energy is on the vanguard of the transition to a distributed, digital electric grid, and we are excited to be investing in their work.”
Graham Oakes, Upside’s Founder and Chief Scientist, said: “This is the culmination of four years of hard work since we entered the Nesta Dynamic Demand Challenge, sponsored by National Grid back in 2013. We’ve taken Upside Energy’s cloud platform from a wild and speculative idea to a solid, innovative solution to help people harness the opportunities created by the confluence of two trends: the growth of renewable generation and the rise of smart devices. Our vision is to create a new, cleaner and more equitable, energy system. This partnership with Legal & General Capital, SYSTEMIQ and Modern Energy will help us realise that vision.”
Devrim Celal, Upside’s CEO, said: “Upside has a unique proposition; while creating a commercially successful business, we are also enabling a greener and sustainable energy system. We are achieving this through partnerships with major equipment manufacturers, renewable and storage project developers, financial institutions and electricity suppliers. This investment will help us scale up our operations and realise our vision to create a new, cleaner and more equitable energy system.”
Alongside investing in the creation of long term clean energy generating assets in solar and onshore wind, we are investing in complementary technology that together will be essential in delivering an affordable clean energy system to UK consumers.
John Bromley, Head of Clean Energy at Legal & General Capital