VOL 5 • October, 2015 EnerTech Capital

ENERTECH QUARTERLY

“Thought Leadership in Energy Technology”

We are pleased to bring you our fifth

edition of the EnerTech Quarterly

Newsletter. We have been busy over

the past quarter both with our

existing portfolio and new deals in

EnerTech IV. We have now invested

$45.6 million from ECP IV into 10

companies with one new pending

transaction (outlined below). Should

this new transaction close, we will

have invested $49.6 million in ECP IV

and completed one exit (Distech

Controls).

The major investment highlights since our last report

include:

Closing of the sale of Distech Controls to Acuity

Brands for $318 million CDN and distribution of

proceeds to LPs

Follow-on investments totaling $2.8 million in two ECP

IV portfolio companies - N-Dimension and EnergySavvy

We are currently in the closing process on a new deal

in the Power Quality space (Power Factor Correction

and Harmonic Filtering). We expect to close this deal in

November 2015 (Total EnerTech investment will be $5

million CDN, with a $10-12 million CDN reserve for

acquisition opportunities)

We continue to see strong deal flow from Canada and the

US with nearly 500 deals seen so far in 2015.

EnerTech Update ECP IV

Wally Hunter

Managing Director

EnerTech Capital

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ENERTECH QUARTERLY

Portfolio company OwnEnergy was sold to EDF

Renewable Energy and we have distributed initial

proceeds to LPs

Acquired by

(August

2015)

Obvious Ventures invested $3 million in Enbala Power

Networks. Enbala raised $11 million earlier in the year

led by GE Ventures and Edison International

EnerTech closed on aggregate follow-on investment of

$275 thousand USD in OwnEnergy in the quarter and

this investment was returned as part of the sale to EDF

outlined above

Our investment landscape in ECP IV continues to broaden

in the Energy Technology sector (see picture below) seeking

innovative technologies from “The Well Head to the Wall

socket”. We are seeing interesting opportunities in our

investment landscape including:

Behind the Meter technologies including device control

Building automation, lighting and energy efficiency

technology

Digital Oilfield and Oil & Gas technologies focused on

reducing the cost of oil production

ECP III

We are pleased to announce that we

have promoted Gian Vergnetti to

Associate. Gian is a valuable member of

our team and an extremely hard worker

who has continued to do great work for

us. Please join us in congratulating Gian

on this promotion!

We would also like to congratulate Gian and his wife Alexis

on the birth of their first child, Phoenix, who was born on

September 3rd.

The 2015 EnerTech Capital Forum and LP Meeting will take

place in Miami, FL December 1 – 3. If you have not already

registered, you can do so below. We hope to see you all

there!

Click here to register for the EnerTech Capital

Forum and LP Meeting.

EnerTech Team Updates

ECP IV Opportunity Landscape: From the Well Head to the Wall Socket

In ECP IV we continue to focus on revenue generating companies or companies that are embarking on growth rounds of

financing with proven technologies and an established customer base.

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ENERTECH QUARTERLY

by

Dean Sciorillo

Director

EnerTech Capital

Before I joined EnerTech Capital in 2004 I was with an

electric and gas utility company for 16 years. During that

time when we internally discussed customers (called

ratepayers at that time and in some areas still are referred

to as that) the focus was primarily on large, or key,

accounts. There was not much focus on residential

customers, and when discussed it often focused on not

upsetting them enough where a customer would lodge a

complaint with the public utility commission (“PUC”) (note:

I recall customer complaints as a metric for part of the

corporate bonus).

Utilities started to engage with residential customers in a

somewhat meaningful way in the early to mid-2000s when

programs like demand response started gaining traction

(note: these programs were primarily being pushed by

PUCs). Under demand response programs customers would

receive an annual payment for allowing their utility to

control their air conditioner or pool pumps on extremely

hot days when the total electricity consumption on the grid

would spike and potentially cause system reliability issues

for the utility.

Other trends, like a steady increase in power prices, from

the early 2000s until about 2008 and more environmental

awareness provided an opportunity for innovative

companies to capitalize on the changing landscape. As

historically has been the case, many utilities did not view

this as a threat to their business, and many just ignored it.

However, since 2008 power prices have decreased due to

the unexpected increase in natural gas reserves and

resulting low sustained prices. In addition, there has been a

precipitous drop in solar PV prices, and efficiency gains,

along with price decreases, in lighting and other areas have

offset the increase in electricity consumption. Power

demand is still below the highs set in 2008. Contributing to

the reduced demand is the fact that 26 states have

programs in place around energy efficiency, which also

lowers emissions (the cleanest megawatt is the one not

used).

Regulation has also played a role in utilities engaging more

with their residential customers. Some areas of the country

have seen deregulation, which means there is competition

on the commodity portion of the bill (T&D services are still

regulated). The new entrants, or competition, are taking on

the role of the trusted energy advisor for the residential

customer, a position long held by the incumbent electric

utility.

The Changing Utility Model and Its Impact on Engaging

Residential Customers

EnergySavvy’s (EnerTech Portfolio Company) Engage Direct - an intelligent, cost-effective, and integrated engagement solution

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ENERTECH QUARTERLY

In addition to deregulation, PUCs have been revamping the

utility business model by implementing new rate structures

like decoupling and lost-revenue adjustment mechanisms, as

well as some performance incentives. All are designed to

incentivize utilities to embrace efficiency and other solutions

that lower the utility’s revenue without affecting

profitability. Thirty three states have some form of

decoupling or lost-revenue adjustment mechanisms, and 26

states have some form of performance incentives.

Over the past few years there has been a lot of momentum

building from utilities around their focus on residential

customers and the potential importance of this customer

class. Many utilities and energy providers now see an

opportunity to engage with those customers to not only sell

electricity or natural gas, but a host of other products and

services. This has already been taking place with C&I

customers for several years. In addition, utilities have

noticed other companies are trying (and some are

succeeding) to disintermediate them from their customers.

Utilities have been partnering with venture backed start-ups

(e.g. Opower, Nest, EnergySavvy) over the past few years

to help them better engage with residential customers from

comparing their electricity usage to their neighbors to

gaining a better understanding of energy efficiency

opportunities within a customer’s home. In addition utilities

are embracing new ways to connect with their customers

including developing apps that alert them to coming high

bills, outages and estimated restoration times, and allowing

customers to inform the utility if they are experiencing an

outage of which the utility may be unaware. Utilities will

need to improve their competencies in this area since they

have never had to do this historically.

As technology continues to progress (e.g. smart appliances)

and become ubiquitous it will present additional

opportunities for utilities, or their competitors, to engage

with residential customers to provide better service as well

as additional services. Utilities want customers to think

about them more than just when their lights are off due to

an outage. Whoever owns the customers’ mindshare will be

able to generate significant value from them.

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ENERTECH QUARTERLY

Q2 & Q3 2015 ECP IV Portfolio Company News If you are viewing a digital version, please click on the news item for more information.

September 24 Blue Pillar VP of Finance and Operations

Recognized By Trending 40

July 13

Blue Pillar, Con Edison and New York City

Hospitals Work Together to Strengthen

Electric Grid Resiliency

June 9 Blue Pillar Selected as a Red Herring Top 100

North America Winner

September 25 Seattle Business Magazine - EnergySavvy

Named 2015 Tech Impact Award Winner

August 14 GeekWire - EnergySavvy Debuts Service to

Connect Utilities with Offline Customers

June 16 Puget Sound Business Journal EnergySavvy

Named one of Washington's Best

Workplaces

June 3 Overcoming Energy Efficiency’s Problem

With Measuring Savings

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July 21 N-Dimension Improves Cybersecurity

Integrity at Piedmont Municipal Power

Agency

July 7 N-Dimension Selected by Central Florida

Electric Cooperative – Helps Improve

Utility’s Cybersecurity Posture

April 1 Greentech Media - Finding the Hidden Cyber

Threats in the Power Grid

September 10 GeoDigital Names Auto Industry Veteran

to Lead 3D Mapping and Self-Driving

Vehicles Business Unit

July 20 Tech Leader In 3D Mapping And Spatial

Data Analytics To Establish North

American Headquarters In Atlanta

June 20 Vegetation Management Goes High-Tech

Tools & Technology Content From

TDWorld

May 28 GeoDigital customer Peter Fox, NB

Power, featured in T&D World magazine

May 13 Greentech Media – GeoDigital: Mapping

The Utility Landscape With Big Data

May 28, 2015 HPC Energy Services launches updated

website

July 14 Space-Time Insight Helps Utilities Reduce

Outage Duration And Frequency

June 30 Space-Time Insight Reduces Risk And Costs

For Utilities With New Asset Analytics

Application

June 25 Space-Time Insight And Enovation Partners

Collaborate To Bring Real-Time Visual

Analytics To Natural Gas Operations

May 14 Greentech Media recognizes SMUD’s

SmartSacramento Initiative for using Space-

Time Insight

April 29 Space-Time Insight Solution Powers

Sacramento Municipal Utility District Into

2015 Grid Edge 20

April 29 Grid Edge 20: The Top Companies Disrupting

The US Electric Market

April 7 GISCafe: Space-Time Insight Takes Situational

Intelligence A Step Further

September 8 REGEN Files Patent Infringement Claim

Against eCurv

Digital roads: speeding towards automated cars - Video by GeoDigital

September 22 N-Dimension’s N-Sentinel Delivers

Intelligent Analysis and Prioritization of

Secur i t y Concerns Acce le ra t in g

Remediation

September 17 N-Dimension Closes $9M Series B Funding

Round

September 9 N-Dimension Introduces N-Sentinel

Continuous Vulnerability Assessment for

Utilities

Space-Time Insight: How renewable energy is managed by Cal-ISO

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ENERTECH QUARTERLY

ECP III

Company News from Previous EnerTech Funds

ECP II

September 21 Large Camp Project Award in Texas

September 15 Large Camp Project Awarded in Canada

June 30 FilterBoxx Delivers First RemoteBoxx

Unit in North Dakota

June 1 FilterBoxx Water & Environmental

Announces Debut of New Rig Combo

May 19 FilterBoxx Lands Large Operations &

Maintenance Contract

April 29 FilterBoxx Announces Debut of New Rig

Combo Assets

September 15 Obvious Ventures Invests in Enbala Power

Networks

August 27 Jeff MacAulay Joins Enbala Power Networks

August 17 Enbala Helps American Water Increase

Efficiency; Triple its PJM Regulation Services

Market Participation

August 7 Well-Known Energy Sales Executive Joins

Enbala Team: Trent Bowers Comes on

Board as EVP and CCO

April 23 Enbala Named as One of Greentech Media’s

Top 20 Most Innovative Firms

September 24 NanoSteel Introduces BLDRmetal™

Powders for Binder Jet 3D Printing

June 29 Nanosteel In Automotive Manufacturing

Solutions

June 23 Dave Paratore Interviewed On 'The Car

Doctor' With John Paul

June 19 Nanosteel AM Expanding Capabilities In

Automotive Engineering

June 4 Nanosteel Receives Venture Funding From

Horizon Technology Finance

May 13 Nanosteel Presents ‘Lose A Little, Gain a

Lot’ Infographic

June 2 Security Sessions | Municipal Utility Takes

Action to Offset Steep Price Increases in New

England

June 1 Braintree Electric Light Department and

Pascoag Utility District Act to Reduce Peak

Demand Cost Risk with Tangent

August 1 Terralux Partners with ENERGY STAR to

Develop Certification for LED Retrofit

June 21 TERRALUX featured in Hotel Business

May 3 LFI LED Lady Interview with Terralux

April/May issue TERRALUX featured in Seniors Housing

Business Magazine

Spring report TERRALUX makes Edison Report top 10

products to see at Lightfair – LEDSENSE

Binder Jet Machine

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ENERTECH QUARTERLY

Venture Capital Update – Q2 & Q3 2015 – VC Investments in Canada

A total of $636 million was deployed in 143 financing rounds by Canadian VCs in Q2 2015 according to final data

released by Thomson Reuters. At the end of June, venture capital invested across Canada totaled $1.2 billion in 300 deals,

which is up 33 percent from the same period in 2014. In fact, Canadian startups have not received as much venture capital

in a January-to-June period since 2002 (Thomson Reuters).

Source: Thomson Reuters, CVCA

A total of $664 million was deployed by Canadian VCs in Q3 2015 according to preliminary data released by Thomson

Reuters. VC investments are on pace to reach $2.4 billion by the end of December, which will make 2015 the best year

for activity since 2002. Select Canadian VC investments are outlined on the next page.

Venture Capital Investment in Canadian Companies

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ENERTECH QUARTERLY

Select Canadian VC Investments from Q2 and Q3 2015

Venture Capital Update – Q2 and Q3 2015 – VC Investments in Canada

Company Name Description Major Investors Investment

Amount (Cdn)

Leading private fusion energy company,

specializing in magnetized target fusion.

Building subsystems at scale, expects to

demonstrate all key systems over next

three years.

Khazanah, Chrysalix,

BDC, Braemar, Entre-

preneurs Fund, SET ,

Bezos, Cenovus

$21.9 million

Developer of gallium nitride (GaN) tech-

nologies.

Cycle Capital, BDC,

Tsing Capital, Rock-

port, Chrysalix

$20 million (amount in USD)

Provider of software-defined operations

solutions for the industrial Internet.

GE Ventures, BDC,

Cisco Systems,

Yaletown Venture Part-

ners

$17.2 million

Developer of power semiconductor

chipsets and reference designs for use

within distributed, renewable power sys-

tems.

Black Coral Capital,

BDC, EDC, Presidio

Ventures, Clean Energy

Venture, Inerjys Ven-

tures

$11 million

Developer of cyber security solu-

tions for the critical infrastructure

market.*

EnerTech, EDC $9 million

Provider of IoT data analytics services.

McRock, White Star

Capital $6 million

Provider of demand side energy

management solutions.* Obvious Ventures $3 million

Developer of a real-time machine intelli-

gence platform.

BDC, Extreme Venture

Partners Undisclosed

Developer of sensor technology designed

to bring operational efficiency to the

mining industry by consolidating low con-

centration ores and reducing energy, wa-

ter, and chemical inputs.

Prelude Ventures, EDC,

Cycle Capital, Chrysalix Undisclosed

Smart window technology for regulating

solar heat in vehicles for improved fuel

economy and passenger comfort.

Pangaea Ventures,

GrowthWorks, BDC,

Five Corners Capital

Undisclosed

*N-Dimension and Enbala are EnerTech Capital portfolio companies.

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ENERTECH QUARTERLY

In the US Venture capitalists invested $17.3 billion in 1,202 deals in the second quarter of 2015, according to data

provided by Thomson Reuters. Quarterly venture capital (VC) investment increased 30 percent in terms of dollars and

13 percent in the number of deals, compared to the first quarter when $13.5 billion was invested in 1,048 deals. The

second quarter is the sixth consecutive quarter of more than $10 billion of venture capital invested in a single quarter.

Select US VC Investments from Q2 2015

Venture Capital Update – Q2 2015 – VC Investments in the US

Company Name Description Major Investors

Investment

Amount

(USD)

Developer of vanadium redox flow

battery systems for grid-scale applica-

tions.

VantagePoint, Starwood

Energy Group. $58.2 million

Provider of diesel and ethanol directly

derived from sunlight and CO2 using

micro-organisms.

Flagship Ventures $34 million

Developer of high-efficiency, low-cost

crystalline silicon solar cell and module

products.

Riyadh Valley Company $31 million

Developer of facilities for the conver-

sion of municipal solid waste and other

waste products to ethanol and other

renewable transportation fuels.

United Airlines $30 million

Developer of a mass-market urban

transportation solution that is flexible,

cost-effective, and environmentally-

friendly.

Pitango, Hearst Ventures,

Ervington Investments,

83North

$27 million

Developer of Internet of Things hard-

ware and software for large scale wire-

less sensor systems.

Andreessen Horowitz $25 million

Developer of an in-car sensor and tan-

dem mobile app designed to monitor

driver behavior and notify drivers

when their behavior is compromising

fuel economy.

USAA, Comcast Ven-

tures, CDK Global, Y

Combinator, RPM, Ami-

cus, Anthemis, Mark Go-

ines, Jared Kopf, Rob

Chandhok, Dan Rose

$24 million

Developer of proprietary rechargeable

zinc-air battery technology for utility,

automotive, commercial applications.

AltEnergy, NRG Energy,

OCI, Fisher Brothers $23 million

Provider of commercial customer intel-

ligence software for energy providers

Electranova Capital, Bat-

tery Ventures, RockPort,

Nth Power, E.ON Ven-

tures

$23 million

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ENERTECH QUARTERLY

In the US Venture capitalists invested $16.3 billion in 1,070 deals in the third quarter of 2015, according to data

provided by Thomson Reuters. Total venture dollars deployed to startup companies for the quarter decreased 5 percent

and total deal count was down 11 percent compared to the second quarter when $17.3 billion was invested in 1,202

deals.

Select US VC Investments from Q3 2015

Venture Capital Update – Q3 2015 – VC Investments in the US

Company Name Description Major Investors

Investment

Amount

(USD)

Developer of energy-efficient glass

technologies for buildings.

NZ Superannuation Fund,

Madrone Capital, Corning $150 million

Developer of a revolutionary 3D print-

ing technology known as Continuous

Liquid Interface Production (CLIP).

Google Ventures, Yuri

Milner, Reinet, Sequoia,

Silver Lake, Northgate

$100 million

Engineers of biological organisms for

applications in the energy, medicine

and food sectors.

Viking Global, Y Combi-

nator, Felicis Ventures,

OS Fund

$45 million

Developer of UAV technologies and

systems.

GP Capital, GGV, Lebox

PreAngel, OFC Invest-

ment, ZhenFund $42 million

Developer of nanolaminated structures

in vats to produce extremely strong

structures and coatings that resist cor-

rosion and can withstand high tempera-

tures.

Founders Fund, BP

ConocoPhillips, Chevron,

Catamount,, Second Ave-

nue, Sunshine Tech, Alli-

ance of Angels, Golden

Seeds

$33.5 million

Combines powerful learning software

and energy storage, simultaneously

helping businesses better manage elec-

tricity use and enhancing grid opera-

tions.

RWE, GE Ventures, Ange-

leno, Iberdrola, Total,

Constellation

$33 million

Developer of high energy density re-

chargeable Li-ion batteries.

Tsing Capital, Mission

Ventures, Presidio, Infinite

Potential Technologies

$30 million

Developer of zinc-bromine flow batter-

ies for electrical energy storage.

I2BF, Anglo American

Platinum, Chrysalix, DBL $25 million

AMS installs advanced energy storage

systems in buildings to lower energy

costs for consumers and provide clean,

instant load reduction to electric utili-

ties. We're building a more efficient,

more resilient electric grid.

DBL Investors, Arnold

Schwarzenegger, Engie $18 million

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ENERTECH QUARTERLY

The EnerTech Team

A Seasoned, Diversified, and Experienced Group

Wally Hunter

Managing Director

Lyndsy MacArthur

Executive Assistant Angelica Mengana

Analyst

Scott Ungerer

Managing Director

Bill Kingsley

Managing Director

Dean Sciorillo

Director

Colleen Pale

Director of Finance

and Administration

Donna Smith

Executive Assistant

Gian Vergnetti

Associate

Eric Schmadtke

VP Investments

Jarett Carson

Managing Director Dr. Dominic Geraghty

Executive in Residence

Hoon Chung,

Executive in Residence

Philadelphia

Calgary

Toronto

Menlo Park Boston

Robert M. Chiste

Executive in Residence

Orange County Houston

Giovanni Ravina

Intern, ENGIE New Ventures

(formerly GDF SUEZ New Ventures) Montreal

Anne-Marie Bourgeois

VP Investments

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ENERTECH QUARTERLY

The EnerTech Strategic Advisory Board

Our Network is an Extended Family of Deal Sourcing, Due Diligence and Exits

The EnerTech Strategic Advisory Board is made up of a diverse and experienced group of visionaries, industry

leaders and experts in various disciplines. They bring unparalleled expertise and a wide network in the areas of

energy services and policy, information technology, Oil & Gas, and clean energy innovation. We are proud and

grateful to have them as members of our Advisory Board.

Strategic Partners

Limited Partners

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ENERTECH QUARTERLY

Dr. Bill Madia

Chairman of the Board of

Overseers and VP for the SLAC

National Accelerator Laboratory,

Stanford University

J. Scott Magrane

Managing Director, Coady Diemar

Partners

Dr. Jim de Wilde

President, JdW Strategic Ventures

Vicky Sharpe

Founding President of SDTC

Rob Soni

Independent Board Member

David Milenthal

CEO, The Milenthal Group

Gordon Pridham

Principal, Edgewater Capital and

Newalta Board Member

Governor George Pataki

Former Governor of New York

Michael Harris

Former Premier of Ontario

Sharon Allan

President & CEO, SGIP

Mike Babcock

Coach of the Toronto Maple Leafs

Independent Board Members

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ENERTECH QUARTERLY

Rebecca Kauffman

President and COO, Southern Ute

Alternative Energy

Eric Legault

Managing Partner, Teralys Capital

John Morris

Sr. Vice President of Field

Operations Waste Management

Nils Voermann - Global

Managing Director -

Technologies, Hatch

Marty Toomajian

President of Energy, Health &

Environment, Battelle

Victor Scutaru

Director, Fund Investments, BDC

Venture Capital

Guillemette Picard

Investment Director, ENGIE New

Ventures (formerly GDF SUEZ

New Ventures)

Rebecca Giffen

Director of Investments, Alberta

Enterprise Corporation

Basil El-Borno

VP Innovation & Process

Development, Newalta

Corporation

Alex Beliaev

Investment Manager, EDC

LP and Strategic Partner Board Members

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ENERTECH QUARTERLY

October 26 – 29, 2015 – San Jose, CA

VERGE

November 2 - 4, 2015 - San Diego, CA

Greentechmedia US Solar Market Insight

November 17 – 20, 2015 – Shanghai, China

Cleantech Showcase Shanghai

December 1 - 3, 2015 - Key Biscayne, FL

EnerTech Capital Forum and LP Meeting

December 8 - 9, 2015 - San Francisco, CA

Greentechmedia US Energy Storage Summit

December 8 – 10, 2015 – Las Vegas, NV

Power-Gen International Conference

January 25 – 27, 2016 - San Francisco, CA Cleantech Forum San Francisco 2016

February 24 - 25, 2016 - Lake Louise, AB

VCAA Ski Day

March 16 - 17, 2015 - Calgary, AB

Propel Energy Tech Forum

Upcoming

Industry Events

www.EnerTechCapital.com

Philadelphia ● Toronto ● Montreal ● Menlo Park ● Calgary

For questions or comments, please contact:

Wally Hunter

Managing Director, EnerTech Capital

whunter@enertechcapital.com

tel #416-363-8563

Remember the EnerTech Capi-

tal Forum and LP Meeting is

coming up in December. We

hope to see you there!!!