Deal focus: Electrify’s energy vision switches on VCs

Telegram, a four-year-old Dubai-based instant messaging start-up and the global initial coin offering (ICO) darling du jour, is reportedly on track to raise $2 billion at a post-money valuation in the range of $5 billion. At the same time, a fellow blockchain player claims to have attracted $1.2 billion in ICO pledges, only to snuff the wildfire at a hard cap of $30 million. 

The start-up putting on the brakes is Singapore’s Electrify, a virtual marketplace operator that helps streamline the convoluted billing pathways of the electricity industry through smart contracts. The company said it wanted to avoid an emerging trend whereby hype for cryptocurrencies has fueled runaway ICOs for unproven companies. 

Electrify rallied about 50 investors for its fundraise, including Japan-based Global Brain, the co-founder of cryptocurrency Ethereum and the CEO of Thai financial technology company Omise. Expectations were low at first due to a coinciding drop in bitcoin pricing, but even as crypto sentiment rebounded, Electrify remained fixed on its $30 million budget for realizing an expansion across Southeast Asia, Japan and Australia. 

“The way the market moves does not change what we need to do as a business. We had to stand our ground against a bear market, and also when too much money was being thrown at us,” says Martin Lim, co-founder and COO at Electrify, describing oversized ICOs as a risky flirtation with the mob mentality of crowdfunding. “We just decided we’re not going to be greedy.”

Stakeholders were chosen from the oversubscribed field based on their willingness to contribute operationally. The plan will leverage Omise-developed technology to promote a scalable platform for processing high volumes of blockchain-enabled transactions. Much of the cash raised will be applied to practical concerns of the geographic rollout, including opening offices, licensing and regulatory fees.  

Electrify sees opportunity in the liberalization of traditionally state-run electricity markets around the world. The idea is to improve economies among electricity retailers and consumers by digitizing and simplifying payment processes. Clients range from commercial electricity users and major power generation companies to a one-year-old start-up electricity retailer.

The company’s business in Singapore, which got started in April last year, is now reporting a slim profit. The platform is said to have transacted more than 30 gigawatt-hours of electricity worth S$5 million ($3.8 million) to date. Operations are expected to accelerate later this year with further deregulation in the local market.

Meanwhile, a parallel peer-to-peer service is set to launch in the next six months, allowing small-scale producers such as people with rooftop solar units, to trade their excess power generation via automated smart contracts. Ultimately, the two services are expected to fuse together, creating a truly decentralized and democratized exchange for both independent and corporate players. 

“The word every technology wants to use is ‘disruptive’ but that implies exclusion. Blockchain fundamentally is about inclusion,” explains Lim. “That’s the wonderful part of this whole system – anyone can use it.”   

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• Topics
• Southeast Asia
• Technology
• Infrastructure
• Expansion
• Singapore
• Global Brain Corporation
• TMT