Singapore startup raises $30m to let you buy electricity on blockchain

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Electrify, which aims to use blockchain to let users buy electricity from energy retailers and other consumers, has raised US$30 million in under 10 days via a token sale, the Singapore-based startup said in a press release on Wednesday.

This makes it one of the largest token sales from a Singapore company on record, according to Tech in Asia’s data.

Currently, Electrify’s proprietary engine collects and displays retail electricity offers. This helps consumers stay more informed about their choices. It also digitizes the electricity contracts to eliminate the need for manual filling.

According to the year-old company, it has helped Singapore’s businesses save upwards of US$554,000 in electricity bills since it began operations. It has transacted US$3.79 million worth of electricity since March 2017.

In the second half of 2018, the startup will replace its current model with one powered by blockchain. Residential or business consumers can transact with energy retailers via a peer-to-peer network using Electrify’s cryptocurrency ELEC, or in fiat money. This will remove the need for middleman fees and reduce transaction cost, said the company in its whitepaper.

The blockchain model is expected to pare down costs for Electrify and its consumers. The use of “smart contracts” – digital contracts in the blockchain – removes the cost of legal, accounting, and financial settlements. These can account for as much as 30 percent of the retail cost of electricity in traditional transactions, said Martin Lim, Electrify’s COO and co-founder, in an interview with Tech in Asia.

“Built on the tenets of the blockchain, our solution will drive down operating costs, ensure the transparency of contracts, and also speed up and streamline contract validation and auditing,” he explained.

Billions in pledges

Electrify claims that over US$1.3 billion was pledged towards its funding campaign, which means that it did not accept over US$1.27 billion in funding.

According to the founders, the fundraising was capped at US$30 million after analyzing the amount needed to expand their project. These plans were outlined prior to the initial coin offering (ICO) in a report. “The success of the ICO is heavily dependent on the blockchain community at large,” said Lim.

He added, “Despite overwhelming support, our plans remained the same and we couldn’t, in good conscience, increase the amount.”

The funding, all raised in ether (ETH), the digital token on the Ethereum network, came from both institutional and individual investors, the company said. Of these investors are prominent VCs like Global Brain and Ethereum’s co-founder, Wendell Davis. The funds raised will be used to expand into other markets including Southeast Asia, Japan, and Australia.

Era of energy deregulation