Microsoft and Kimbal Musk invest in climate startup BlocPower to decarbonize buildings across the U.S.
About a year ago we wrote about BlocPower, a Brooklyn-based climate tech startup that’s decarbonizing buildings across the U.S. by removing greenhouse gases and emissions associated with existing and new buildings and replacing them with green heating and cooling.
According to data from the US Green Building Council, direct energy and electricity use by buildings comprise roughly 38% of greenhouse gas emissions in the U.S. That’s why BlocPower is partnering with cities to retrofit and convert buildings in low- and moderate-income neighborhoods across the United States from burning fossil fuels to using lower-carbon electricity for heating and cooling.
BlocPower has not gone without notice. In March 2022, Microsoft and Jeff Bezos invest in BlocPower to green American cities by retrofitting millions of old buildings with ‘green’ energy. Bezos’ investment was part of Bezos Earth Fund’s $443 million donations to a wide range of climate and environmental groups, including a $5.5 million grant to BlocPower.
Fast forward a year later, BlocPower this week that it has closed nearly $155 million in funding to expand and finance community decarbonization projects like it already has undertaken in Menlo Park, California, and Ithaca, New York.
The round, which includes more than $24 million in Series B funding, was led by VoLo Earth Ventures, Microsoft Climate Innovation Fund, Credit Suisse, New York State Ventures, Elon Musk’s brother and sister Kimbal and Christina Musk, and NBA player Russell Westbrook also were part of this equity round.
In addition, BlocPower also raised $130 million of debt financing led by Goldman Sachs, which brings BlocPower’s total funding raised to date to more than $250 million.
“We are fighting the climate crises while improving quality of life for city residents,” BlocPower co-founder and CEO Donnel Baird said in a statement, noting that the funding will “allow us to accelerate building decarbonization across America.”
Founded in 2014 by Donnel Baird and Morris Cox, BlocPower leverages advanced technologies, innovative electrification equipment, and structured finance to provide green heating and cooling to urban buildings. The company also connects government agencies, utilities, building owners, and smart equipment.
The company is currently backed by the world’s top investors, including Kapor Capital, one of Uber’s first investors, Andreessen Horowitz, an early investor in Facebook, Twitter, Airbnb, and Lyft, the former Chairman of Google, and American Family Insurance Institute for Corporate and Social Impact, Exelon, Goldman Sachs Urban Investment, Kapor Capital, and Salesforce.
In January 2022, BlocPower also received a big debt infusion from Microsoft, bringing its total funding to about $100 million. In addition, Bezos Earth Fund also invested another $5 million grant to digitally map about 125 million buildings across America so that each one of those buildings will have a free plan for how to become environmentally sustainable. The company is now negotiating with several cities in California, New York, Massachusetts, and Georgia to decarbonize.
So how does BlocPower work? Instead of investing millions of dollars on expensive equipment, the startup leases the equipment for about 10 or 15 years, and after enough money has been taken in to pay back investors and for BlocPower to collect its fees, the ownership of the equipment is transferred to the building owner. Today, BlocPower is behind the first plan by a U.S. city — Ithaca, New York — to be entirely net-zero by 2030.
Since its inception six years ago, the company has greened more than 1,200 buildings in New York City, with ongoing projects in 26 cities. Blocpower also estimates that buildings across the country waste as much as $100 billion on fossil fuel consumption annually.