Cleantech SaaS capital investment case study: Sefaira

Acuity Advisors helped secure a $10.8 million A round venture capital investment from US and European investors for sustainable and energy efficient building design software company Sefaira

Here’s how…

The opportunity

Sefaira develops innovative software for sustainable and energy efficient building design with patented, award-winning technology that is finding success in the UK and US through its SaaS business model. Stretched by business development opportunities in a rapidly expanding global market, the company turned to Acuity to support its funding round and secure capital investment.

The business

Founded in 2009, the company provides architects, retrofit engineers, building owners and materials manufacturers with cloud-based green building design and analysis software. It addresses the demand for energy efficient buildings, driven by the twin pressures of rising fuel prices and low-carbon footprints. By 2020, for example, it is expected that legislation in the European Union will require all new homes to have a near-zero carbon footprint. It is estimated that the opportunity for software in this untapped market will be $2.3 billion, growing at 20 per cent per annum.

The company’s radical approach enables users to quantify and compare building energy efficiency strategies much earlier in the design cycle where such decisions have the lowest cost and the highest impact. Compared to current manual, labour-intensive methods, the automated solution reduces time and costs, yet improves accuracy and scalability. Fulcrum, Sefaira’s whole-building analysis engine, was awarded UK Green Building Innovation of the Year at Ecobuild 2011. The engine uses the scalability of cloud computing to perform computationally intensive physics-based analysis and design support. It also provides a platform for follow-up optimisation, retrofit assessments, auditing and monitoring for the building lifecycle.

“Sefaira’s innovation in cloud-based data-driven design brings a whole new level of analysis to the industry,” says Mads Jensen, CEO. “Through intuitive software, we aim to put the most powerful analysis in the hands of designers and decision-makers everywhere. Data driven design is all about making better decisions, which lead to better, more cost effective and more energy efficient buildings.”

The challenge

Armed with innovative technology and seed funding, Sefaira embarked in 2011 on a successful early adopter programme for its SaaS-based products serving predominantly US and Europe based architects and engineering firms.

To accelerate international business development and facilitate continued R&D, the company required a sizeable Series A funding round of capital investment. The company believed it had a strong proposition for investors including:

  • Market need: timely, unmet by current methods
  • Strong solution: differentiated, physics-based approach, using advances in cloud computing for analysis
  • Proven management team: experienced in both start-ups and in Fortune 500 operations and business development
  • Well positioned for an exit

Despite informal conversations with venture capital funds and interest from investors, the management of the business did not want to be distracted from commercial opportunities. It therefore looked for a corporate advisor who had a track record in the sector, could quickly understand its business proposition, and was well connected with VCs in the UK, Europe and the US.

The solution to capital investment

Acuity provide a unique mix of skills and experience: a proven track record in cleantech and software; a strong network of investors; unique project management skills; and the ability to work through due diligence activities.

Jensen says: “We wanted an advisor to catalyse conversations that were already underway and support us to quickly move them to term sheets for capital investment while also approaching additional investors. While the fundraising process was important, the distraction for the busy management team needed to be minimised. Acuity’s tenacity of approach was important. Their tireless attitude and tenacity was particularly valuable during the complex due diligence process, which involved multiple legal jurisdictions. Acuity acted extremely professionally throughout the process, and we owe a lot of the result to the approach they brought to the engagement.”

Acuity picked up on existing conversations and developed a comprehensive Information Memorandum, which outlined the investment opportunity, the company’s solution and approach, as well as supporting financial information. Acuity also supported the development of the financial forecasting.

It supported the Sefaira management team to secure a term sheet from a syndicate of investors led by Braemar Energy in the US, and joined by Chrysalix SET in the Netherlands and Hermes GPE based in London. Acuity managed the entire process for Sefaira. It supported the business through the negotiation of the term sheet and project managed the due diligence process with Sefaira’s legal counsel, SJ Berwin, despite the complex cross-border nature of the transaction.

Ylan Steiner, Partner, SJ Berwin, says: “Once again we have worked successfully with the team at Acuity on a complex international transaction. Acuity were instrumental in assisting Sefaira secure the capital investment required to grow its business from a syndicate of investors with a passion for cleantech and software investment.”

Result

The Braemar Energy-led consortium’s funding of $10.8m amounted to the largest series A funding won by a UK cleantech company in over two years. Neil Suslak, managing partner at Braemar Energy Ventures, says: “Sefaira’s technology is at the forefront of enabling wide scale energy efficiency improvement and emissions reduction for buildings and building products. Sefaira’s robust engine allows designers to make rapid design and engineering choices that enable measurable savings to a building’s energy costs and environmental footprint.”

Rene Savelsberg, Managing Partner and CEO of Chrysalix SET, adds: “Our confidence in Sefaira is demonstrated by their impressive track record of rapid customer adoption, new market expansion and global presence. We are excited to help further accelerate their growth plans.”

Jensen adds that Acuity’s support has been critical in delivering this landmark result: “The Acuity team supported us every step of the way through the investment negotiations and due diligence. They acted as a sounding board for the management team, while not allowing us to be too distracted by the heavy lifting involved in securing capital investment. Their help and advice has been critical in moving us on to the next phase in our growth.”

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