Sydney angel investor’s $100k punt on SA energy start-up
South Australian start-up IO Energy, which wants to optimise the use of cheap renewable energy, has found its strongest backer in a Sydney family-owned investment group.
Angel investors and brothers Ben and Adrian Waters, who traditionally invest in cyber security and fintech start-ups, have tipped in $100,000 as part of IO Energy's seed funding round that closed at $659,000.
"We honestly knew very little about the Australian Energy Market before beginning our research.
"At the earlier stages of the business lifecycle, the qualities of the co-founders and first few employees are key to future success," Adrian Waters said.
"Being a veteran myself I like businesses that have ex-military or defence civilian founders," Mr Waters said.
"We find most veterans are resilient to temporary setbacks and have a bias for action.
"It also helps that we all speak the same language and have a set of shared experiences to draw on when we are discussing problems or strategy."
It is the family's first investment in the energy space.
"Our view is that it solves a clear business problem by lowering retail electricity prices for consumers and providing a positive social impact by moving the electricity market towards renewable energy," Adrian said.
The Waters family are business owners and entrepreneurs with Ben Waters being the co-founder of Cydarm Technologies.
The family trust has invested in IO Energy's convertible note and won't hold any equity until conversion.
Adrian and IO Energy co-founders Luke Morton and Rob Morris served together as officers in the Australian Army.
Mr Morris said the group's seed funding round was deliberately focused on friends and family to participate in the growth prospects of IO Energy, which hopes to raise another $3m in a Series A funding round in 12 months.
Launched in August 2020, IO Energy is partnering with retailer Energy Locals to offer homes and businesses cheap daytime energy plans.
The seed fund will go towards improving its proprietary software technology that analyses data gathered from existing customers, about 150 of them, including small businesses, to slash power bills and increase use of solar and wind energy.
IO Energy's plans - which require a smart meter which records time of use of energy - are particularly suited to households without solar panels, such as apartments, heritage-listed buildings or too much shade on the roof.
It is expected many of these customers will install batteries that can be charged from the grid at cheap prices then power the dwelling at night.
IO Energy brings together Rob's mechanical engineering skills and understanding of the workings of the complex energy market with Luke's innovative thinking and entrepreneurial and business background.
"Being in defence gives you a lot of purpose," Mr Morton said.
"IO Energy came about because it was a great opportunity to not just help people but make an impact (through the use of clean energy).
"We want to help people to make smarter energy choices with solutions that could ensure up to an 80 per cent discount for daytime energy usage."
Cafes, small offices and homes with retirees or those working from home could benefit from the best pay plans for daytime energy use.
"Cafes, for instance, could save up to $5000 in annual costs by using renewable energy," Mr Morris said.
Originally published as Sydney angel investor's $100k punt on SA energy start-up