Today, we're excited to announce Energize’s continued investment in Aurora Solar, the leading operating system for the solar industry. Energize co-led the company’s $200M Series D financing alongside Coatue Management, with participation from existing investors Fifth Wall and ICONIQ and new investor Lux Capital. This is the fourth consecutive financing round Energize has participated in and the second investment from our growth platform.
Energize is no stranger to Aurora. We first got to know the team as they were raising their $20M Series A in 2019. With a keen awareness and understanding of the solar installation pain points that Aurora’s software solves for, our initial investment was swift and unequivocal. Investing again in their Series B and Series C, we continued to support Aurora as they hit key milestones: building out a stellar leadership team, expanding their product and growing rapidly as the solar market – and the need for software – swelled to where it is today.
We’ve watched them scale from a young, ambitious company of 40 full-time employees and 1.5 million projects under their belt into a solar software unicorn with a headcount of around 300 and 7.5 million software-supported installations to boot. Among Aurora’s recent hires are best-in-class executives in finance, product, marketing, sales, engineering, and customer success, with more to come as they prepare for the next step in their company’s journey.
Now more than ever, we are convinced that Aurora is on the path to becoming a world-class software company with this latest round of capital. At some point in their evolution, the best software companies mature into a similar profile, regardless of industry. There are typically three factors that determine whether a company will successfully make this leap: customer satisfaction, product expansion, and market tailwinds.
Aurora has nailed all three.
Customer satisfaction
We rely heavily on customer feedback and cohort analyses to guide our growth investment diligence at Energize. Aurora's customer retention numbers rank in the top quartile when benchmarked against all software businesses, and they continue to improve annually.
Customers are re-committing to the Aurora platform cycle after cycle. One of the biggest compliments an energy software company can receive from a customer is "I trust you." Aurora’s glowing customer feedback (with the contracts to prove it!) cements its reputation as the most trusted name in solar software.
Product expansion
World-class software businesses sell, on average, three products to the same customer. As a result, they create increased incremental margins and expand the size of their total addressable market. Aurora takes a customer-centric, strategic approach to product expansion that will enable them to create and capture increased market share.
Reacting to customer feedback on the need for design software tailored to sales reps, Aurora launched Sales Mode, an end-to-end sales solution that empowers solar sales teams to close deals more quickly without sacrificing design quality.
At Energize, we had a front-row seat to the product's development and initial customer conversion – and we have no doubt the solar software TAM will increase as new products are added throughout the value chain. We believe that this is only the beginning, and we’re excited to see Aurora continue to meet these market opportunities as they arise.
Market tailwinds
Until recently, most considered solar a "niche" segment within the broader energy generation landscape. But, when a niche declines 90 percent in cost over the span of 10 years, it's only a matter of time before growth propels it into the mainstream.
Solar is now the fastest-growing power generation source in the world. Annual installations grew 15x between 2009 and 2020 and are expected to grow 12x between now and 2050. At Energize, we believe software and automation are the only way to meet this exponential growth.
For the first time, the revenues of solar companies reflect these market tailwinds. As a result, the average publicly traded solar company grew revenues by 28 percent annually between 2019 to 2021.
Energize’s growth platform was born from our thesis that growth-stage software companies that are staying private longer seek capital from private investors who understand the market and their needs at that point in their lifecycle. We are proud to have partnered with Aurora first as an early-stage venture and now as a mature, high-growth market leader driving solar adoption at scale.
Please join us in congratulating Chris, Sam, and the rest of the Aurora team as they continue to help provide the world with access to cleaner energy. If you're interested in joining them on this mission, check out their latest open positions here.
