Dive Brief:

• Redaptive announced that it has secured $125M in financing from Deutsche Bank’s U.S. private credit and infrastructure group.
• The warehouse facility financing will securitize Redaptive’s portfolio of customer contracts, allowing the firm to price its energy-as-a-service and data offerings competitively, the company said in a press release. 
• The energy-as-a-service firm plans to channel the funds toward accelerating its metering, HVAC, solar, electric vehicle, and other efficiency and sustainability solutions. 

Dive Insight:

Improving the way American businesses manage their buildings and use energy across their commercial building portfolios is becoming a vital part of addressing the country’s carbon pollution, Redaptive told Facilities Dive in an email.

Buildings are the source of 39% of global energy-related carbon emissions, with 28% comprising operational emissions from energy needed to heat, cool, and power them and the other 11% from embodied carbon in their construction materials, according to the World Green Building Council. 

In the U.S., commercial buildings consumed primary energy to the tune of 17.41 quads in 2021, a 65% increase from 1980, according to the University of Michigan’s Center for Sustainable Systems. And about 30% of energy used in commercial buildings is wasted, according to U.S. Environmental Protection Agency estimates.

“For every three kilowatts, one [kW] is being wasted on lights being left on when no one is there and spaces being heated or cooled when no one is there,” Redaptive CEO Arvin Vohra said in an interview. “We’ve seen time and again, as data insights have shown, that even though you believe it’s not your facility, there’s someone — like the cleaning crew — who [may] leave the lights on accidentally and forget to turn them off.” 

Redaptive works with major corporations to help them achieve net-zero goals. The firm’s energy-as-a-service model involves funding energy efficiency or renewable energy upgrades that customers pay for with the money the improvements save and charging customers out of their savings. 

Vohra said the $125 million from Deutsche Bank is being raised in the form of debt for project financing purposes. Given the size of the agreement, “It brings efficiency into the same stratosphere as solar [power purchase agreements],” he said.

With this financing, Redaptive’s lower capital costs and greater volume of capital for upgrades mean facilities managers, particularly those operating with constrained budgets, will have more money to upgrade lighting systems, HVAC applications, and other equipment and infrastructure, he said.

Jeremy Eisman, head of infrastructure and energy finance for the Americas at Deutsche Bank, said in the release that the investment bank’s partnership with Redaptive will accelerate the implementation of the company’s sustainability solutions and “further support our shared net-zero ambitions.”

The news of funding from Deutsche Bank arrives shortly after Redaptive announced the launch of Redaptive One, a digital platform that it says saves customers up to 15% in utility costs.  

Deutsche Bank’s New York branch will act as a credit facility agent on the $125 million committed warehouse facility for Redaptive, the release said.