As energy prices soar and environmental concern grows, startups that help companies manage their energy usage and carbon footprint continue to generate interest from VC and private equity firms.
The latest example is Partners Group’s $500 million investment in Shelton, Connecticut-based Budderfly, a startup that provides companies equipment and systems to manage their energy use.
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The investment gives Partners a majority stake in the company, with early investor Edison Partners exiting Budderfly. Edison first invested in Budderfly in June 2017—when it led an initial $22 million financing round—and later participated in follow-on rounds where Budderfly raised an additional $55 million in June 2019.
“Exit opportunities still exist in this economic climate,” said Chris Sugden, managing partner at Edison Partners.
Budderfly describes itself as an energy-efficiency-as-a-service provider. The startup works with retailers, restaurants and other businesses with repeatable footprints to monitor and manage their energy consumption and reduce their carbon footprint.
The company, founded in 2007, had raised $82 million before this majority stake transaction, according to Crunchbase data.
Big money
The deal is the latest example of investment firms’ interest in the ESG space—which now even includes private equity. It is the latest in a series of large financing rounds that have gone to companies in the sector.
Just last week, funds managed by private equity giant Blackstone’s energy-focused investment business—Blackstone Energy Partners—committed $400 million to lead a strategic investment in Xpansiv. The New York-based company has developed a market-infrastructure platform for global carbon and environmental commodities—like voluntary carbon offsets or energy credits.
In May, France-based TotalEnergies SE bought half of Global Infrastructure Partners’ stake in Clearway Energy Group for a $1.6 billion investment. The San Francisco-based renewable energy developer is one of the largest developers and operators of clean energy in the U.S.
Illustration: Dom Guzman
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