Sramana Mitra: It sounds like one of the strategies your firm is following is analyzing a macro trend and making multiple bets on that industry.
Warren Weiss: We’re trying to go deep in certain areas. We see this is a decade of the CMOs and so CMOs will spend more time to automate a business. We hear a lot about Big Data. It’s really about big results, not Big Data and so things like marketing technologies and financial services are two spaces that we’re primarily interested in diving very deep on.
You can’t be an expert at everything, so if you’re looking to raise capital from venture folks, you really need to not only look at the firms but also look at the partners’ experience and how they might be able to assist you to build a company.
Sramana Mitra: You also invested quite a bit in clean tech or IT as it pertains to clean tech. Can you comment on that? Of course, Silicon Valley fell in love with clean tech for a while and then that turned out so well. There are very few investors still investing in clean tech, but you have been reasonably successful in clean tech, so talk about that.
Warren Weiss: It’s a fun question to poke at. The word clean tech always obfuscated what I thought was a potential market. There’re really two kinds of investing that we have been successful at in the market. One is around digital energy. This is transforming the electric grid, gas, and water grids into a digital two-way network that communicates with the network.
I’ve been involved in Silver Spring Networks for about 12 years now. It’s the largest smart grid company in the world but it’s really transforming it into an Internet of Things market. We see it in personal Fitbit and all kinds of devices. There’s going to be trillions and trillions of devices that are connected, sensed, monitored, and monetized through the Internet through cellular infrastructure. It was just obvious to us.
Just like in the days when Sun said the network is the computer, The electric grid is the most complex system ever built in the world. But it’s a hundred years old, and it’s completely outdated from our monitoring and managing standpoint. The other market that we’ve been very successful in is at the intersection of financial services and Solar-as-a-Service. We have two companies.
One is a company here in the United States based in California called Sunrun. It’s a residential Solar-as-a-Service market. What it does is it makes solar affordable for people that can’t afford the outlay to put in all the solar infrastructure in their home. There’re various plans ranging from zero money down to as much as $25,000 to buy your own system. They become your energy company.
They sit between you and your utility. Your solar power is sold back to the utility itself. From the first month, you can start making terrific savings. They signed 20 year-long contracts. They have backlogs as a result of that. It looks more like a traditional financial services company but they operate and run it for year.
We also have a similar company in India called Azure Power. It’s the largest Solar-as-a-Service to the commercial and industrial marketplace in India. India hungers for energy. The cleaner the energy, the better. The Indian government has done a tremendous job with initiatives to have clean solar. Azure Power is another company that is the largest independent company of Solar-as-a-Service to those marketplaces.
We expect great things from both those companies. The real gem here is seeing that there is a new way to do business. It doesn’t always have to be an intellectual property breakthrough. It can be an innovative business model breakthrough that allows millions and millions of customers to participate in something they couldn’t afford or didn’t understand. All three of those examples are things we’ve been very successful at. It’s another deep focus that started a decade ago.