Retroficiency, Backed by World Energy and Angels, Looks to Cash In on Real Estate Market for Energy Software
With a name like Retroficiency, you pretty much know what you’re getting. That’s saying a lot, given the obscurity of most startup names these days.
You might gather that this company has to do with retrofitting and energy efficiency—and you’d be right. Boston-based Retroficiency provides software-as-a-service to help energy service companies, facility management firms, and commercial property owners evaluate energy-efficiency measures for their buildings. In other words, the software tells them what the energy impact will be if they upgrade the lighting systems, change set points, use new insulation, and so forth.
The company is announcing today it has raised $800,000 in seed financing led by Worcester, MA-based World Energy (NASDAQ: XWES), with angel investors including Jean Hammond and Jill Preotle also participating. (My colleague Wade has previously profiled World Energy, an energy management services firm.)
Retroficiency is part of a growing mini-cluster around Boston that’s focused on using information technology to improve energy efficiency, as my colleague Erin wrote about last month. Other companies such as Next Step Living, Practically Green, and Powerhouse Dynamics tackle different aspects of energy retrofitting and monitoring.
Chief executive Bennett Fisher co-founded Retroficiency in 2009. Fisher is an MIT Sloan School grad who previously worked in real estate investment and management. After finding a pain point in the energy market, Fisher and his team bootstrapped the company for a year before they raised money last summer. The firm now has a half-dozen full-time employees and a total team of about 10.
The number-one lesson so far, Fisher says, was “getting in bed with customers very early” and “letting them help shape the product.”
Take commercial real estate firm Jones Lang LaSalle, an early customer of Retroficiency. If Bank of America, say, wants to know how much it could save on energy across 100 buildings, Retroficiency’s software lets JLL enter high-level information about each building—things like square footage, age, and type of heating—and then creates a detailed computational model that predicts what the payback is for various upgrades or retrofits.
Of course, the software is only as good as the data it’s based on. But the data comes from tens of thousands of energy audits in the industry, Fisher says, and that’s a key differentiator for Retroficiency. In any case, the software is more effective and systematic than sending out auditors to inspect buildings on foot, he says.
Meanwhile, the market is growing for commercial building retrofits, with New York City, Washington DC, and San Francisco mandating large-scale audits, Fisher says. He adds that typical buildings can see 20 to 30 percent energy savings with simple equipment upgrades.
The coming year will be a telling one for Retroficiency, to see if it can gain some real traction. “We hope to have a bunch of big names jumping in with us,” Fisher says. “We’re talking to some very large companies.”