After Two Years Apart, Startups STEMhero and MeterHero Reunite
It’s rare that a spinoff company ends up buying its parent. But that’s what happened with STEMhero and MeterHero, two software startups born in Milwaukee and recently rejoined.
In 2011, McGee Young, then a professor at Marquette University, taught an environmental politics class in which students brainstormed ideas to help people better understand how much water they use. One of the students in the class was Nathan Conroy, who has a degree in secondary education and had previously taught at a high school in Sherwood, OR.
The group discussion helped inspire Young and Conroy to co-found H20score, which began as an online portal allowing homeowners to compare water usage data to past billing cycles, and offering rewards for reducing one’s water footprint. The Milwaukee-based startup eventually changed its name to MeterHero, and broadened its scope to focus on conserving energy, in addition to water.
In 2013, MeterHero was part of the first batch of startups accepted into The Water Council’s water tech accelerator, dubbed “Business. Research. Entrepreneurship. In Wisconsin.”—the BREW for short. Conroy says that schools in the Milwaukee area sometimes took field trips to the Global Water Center near the city’s downtown, which houses the council and accelerator.
“Students would see our poster and they’d say, ‘Oh, that’s really interesting: data analytics that relate directly to a student’s life. Can we use that in school?’” Conroy says. “For a long time, our answer was, ‘No. This is something that we’re just doing with homeowners.’ That really propelled me to focus on education.”
So in 2014, Conroy split off and launched STEMhero, which is similar to MeterHero but is aimed at educating adolescents about consuming and conserving natural resources, through their schools’ curricula.
And earlier this month, STEMhero finalized a deal to acquire MeterHero’s technology, website domain, and other assets, Young confirmed to Xconomy.
“It came around full circle,” says Young, who in 2014 moved his family—and MeterHero—to the San Francisco Bay Area. “[Conroy] did a really great job finding a great niche, use case, for that functionality.”
Young and Conroy both declined to reveal the purchase price.
MeterHero’s sale is the first among the 17 startups that have graduated from or are participating in the BREW accelerator to have an exit, says Elizabeth Thelen, the Water Council’s director of entrepreneurship and talent. However, as accelerators and early-stage companies go, it’s a somewhat unconventional exit because STEMhero began as an offshoot of MeterHero. Still, Thelen calls the acquisition “a great thing.”
Conroy says that Young was MeterHero’s only employee at the time of the deal, and he will remain an advisor. (Even after STEMhero was spun out and Young moved to the West Coast, the two continued to talk a couple times a month, Conroy says). Young recently joined Open EE Meter (the “EE” stands for “Energy Efficiency”). According to the organization’s website, it’s developing a meter that measures energy efficiency—as the company’s head of product.
STEMhero, meanwhile, currently has four employees, three of whom are full-time, Conroy says.
STEMhero will continue to work with some legacy users of MeterHero’s software, Conroy says. In terms of adding new customers, though, STEMhero will mostly target utility companies, as well as some school districts.
Young says that “unit economics” was one of the major challenges he ran into while trying to get traction with MeterHero.
“It was really expensive for us to do all the work of tracking the consumption, and going and getting the data, and going out and telling people they can do this,” Young says. “In the classroom, the unit economics work a lot better.”
Having played an integral role in the founding of MeterHero, Conroy says there are parts of the acquired company’s software code that are familiar to him. Before he launched STEMhero, Conroy helped lead an effort to package MeterHero’s software so it could be used by schools and other nonprofits. But after Conroy’s departure, Young concentrated on the rebate- and reward-based business model, which primarily involved selling to owners of homes and buildings.
“Sometimes it’s saying, ‘Can we go back to how we had it before?’” Conroy says. “The model before was maybe a little more advantageous to teachers.”
Conroy says that Polymathic, a Chicago-based software development shop, originally wrote the code for MeterHero. Milwaukee is located about 90 miles north of Chicago, which Conroy says is close enough that the acquisition marks something of a technical homecoming for MeterHero.
“It felt really good to bring back the code to where it was created,” Conroy says. “It is significant that [MeterHero] is coming back to Milwaukee. For us, this is the perfect place.”