Compare Rates and Change Electricity Supplier with Power2Switch
Editor's Note: See all our Excelerate Labs coverage here.
WHAT: Lets consumers and businesses compare rates from electricity suppliers and switch to one that's cheaper or greener. Most who use the service save between 7% and 19% on their electric bills.
To reduce consumption, Power2Switch also lets consumers monitor their electricity usage and compare it to others.
Service only available in Illinois right now, but Power2Switch has a contract with a supplier that will bring the company into all 17 U.S. states with deregulated utilities.
LAUNCHERS: Seyi Fabode, who worked in the utilities industry in the U.K., and Phil Nevels, who has biz-dev experience at startups.
WHY: Consumers don't know much about their energy options or their usage. People like saving money. Lead generation is a lucrative business model.
WHEN/WHERE: 2008 / Chicago.
BACKSTORY: Seyi and Phil met at the University of Chicago Booth School of Business. Seyi started the company in fall 2008, and Phil joined him in 2009.
Seyi's experience in the U.K. utility industry has helped: "I worked on the generation side, which allowed me to be the one who was signing contracts with the retail suppliers we are now working with."
[ Power2Switch founders Phil Nevels (left) and Seyi Fabode. ]
BUSINESS MODEL: Supplier pays Power2Switch a percentage of a new customer's usage for the life of the contract (typically two years). Percentage is the same for all suppliers.
Through partnerships, with property-management companies for example, Power2Switch provides a white-label version of the platform at no cost. When customers of those companies switch suppliers, Power2Switch gets its standard cut.
Seyi says a data product is in their long-term plans.
COMPETITION: SaveOnEnergy and White Fence, which does lead-gen for multiple home services including energy. SimpleEnergy for helping consumers cut energy usage [ see our SimpleEnergy profile ].
ON SIMPLE ENERGY: Seyi says, "What SimpleEnergy is doing is providing this [monitoring] service on behalf of utilities. We're providing the service on behalf of the smaller energy suppliers we're working with."
CUSTOMERS/GROWTH: Not disclosing.
HOW THE U.K. AND U.S. UTILITY MARKETS DIFFER: "There's no one national grid here, that's the big difference," says Seyi. "It's very regional, and so a site like ours would be able to operate across all of the U.K. with just one set of contracts, but not in the U.S."
GOAL: "To educate every consumer to the point where we all become experts in energy management and monitoring," Seyi says.
ON CHANGING ENERGY CONSUMPTION: "People won't change unless they fully, tangibly see the benefits. Most of the efforts so far rely on things like, 'Oh your neighbor is using less than you or more than you,'" explains Seyi. "If you can show what that means in terms of dollars for me and in some cases show me how I can get that money back in my pocket, which is what we're trying to do with the approach we've taken, we believe people will be more receptive."
ON EXCELERATOR LABS: Prior to joining the accelerator, Power2Switch had a handful of customers on both the residential and commercial side, enough for revenues in the tens of thousands. "Since being in Excelerate, we've accelerated our customer acquisition on the residential and commercial side. We have many more customers and some good traction," says Phil.
WHO BACKED IT: Excelerator Labs (bootstrapped until entering the program).
RAISING: About $600K committed before Demo Day and "looking to raise a bit more money after Excelerate," says Seyi.
WHAT THEY WANT IN AN INVESTOR: "Expertise in the real estate industry is a big one, but it's a tough one to get," says Seyi. Of course they'd love an investor who knows the utility space. "Unfortunately, the ones who get the space invested in some of the new companies like Opower, so there might be conflicts there," Seyi says. "We're still having conversations."
NUMBER OF EMPLOYEES: 5.
SCREEN SHOT
FURTHER READING
1. "How to Read Your Utility Bill (in Deregulated States)" (AARP, May 2011)
2. "Changing Behaviors to Save Energy" (NPR's Talk of the Nation, March 1, 2010)
CONTACTS & LINKS
Seyi Fabode
Email: seyi at power2switch dot com
Twitter: @seyi_fab
LinkedIn: http://www.linkedin.com/in/seyifabode
Phil Nevels
Email: phil at power2switch dot com
LinkedIn: http://www.linkedin.com/pub/philip-nevels/4/560/1b8
Company name
@power2switch
Facebook: http://www.facebook.com/Power2Switch
Blog: https://power2switch.com/weblog/
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