- Big buildings — and the construction industry — are a huge consumer of energy and driver of carbon emissions.
- Cove.tool, a software company that was built from an energy-modeling practice, cuts the time it takes to understand the energy efficiency of a building’s design.
- The company raised a $5.7 million Series A round in October. Co-founder and CEO Sandeep Ahuja walked us through the pitch deck she used to raise the funds.
- Visit Business Insider’s homepage for more stories.
Big buildings — and the construction industry — are a huge consumer of energy and driver of carbon emissions.
And analyzing a building’s design for energy efficiency is highly manual and can take more than a hundred hours to do.
Sandeep Ahuja, who founded and led an energy modeling consulting practice, Pattern r+d, told Business Insider that each project took roughly 150 hours of consultants’ time.
Early attempts at automating her workflow eventually led her to partner with two brothers, Daniel and Patrick Chopson to create a software program that could do just that, slashing the time it takes to create energy models of a building to 15 minutes and shortening decision making about design revisions to an hour.
That software program has become a software-as-a-service company, Cove.tool, that provides energy modeling automation to architects, engineers, owners, and contractors. Daniel Chopson left his job as a senior software engineer for accounting company Sage to become CTO, while architect Patrick became COO.
The company raised a $5.7 million Series A round in October, led by early-stage venture investors Mucker Capital, and including previous investors Knoll Ventures, Urban Us, and TechSquare Labs. The round brings the company’s total funds raised to $6.8 million, including a $150,000 investment the company received from Urban-X, an urban tech startup accelerator.
Ahuja said that the company now has thousands of paying users across 22 countries, such as real estate services firm JLL, construction giant Skanska, engineering firm P2S, and architecture and engineering firm EYP.
Ahuja said that a key part of making Cove.tool — and energy efficiency — appealing to developers is to make it financially attractive. As a result, the software takes energy efficiency and cost into the equation, outputting a design that will find the cheapest possible way to fit the energy efficiency protocols for the property.
“There are developers who don’t care and just want to meet code minimum,” Ahuja said. “They understand something when it relates back to cost.”
Ahuja said that these cost-saving measures can save 2-3% on a building’s expected construction cost, which may seem like a sliver, but when applied to multi-million dollar commercial construction, it can lead to major savings. If the software can also shorten costly construction delays through consolidating decision making into one software, those savings can be compounded.
Of the four major users, both contractors and developers are most interested in optimizing their buildings for cost.
“When you think about $100 million building, that adds up,” Ahuja said.
On the other side, architects and engineers are most focused on time-saving, according to Ahuja, as well as saving money on costly consultants by switching to a monthly fee for a software package. Product manufacturers are an unlikely fifth user of the platform, which also can act as a marketing tool. The software compiles the energy-saving statistics and cost of every component included in the design and the final output suggests exactly what products should be used in construction to meet code and budgetary constraints.
Ahuja and Daniel Chopson walked Business Insider through the pitch deck that the company used to raise its most recent round of funding. The firm has altered three slides on its growth metrics and financials to hide their actual internal metrics, but show how they presented them to investors. Business Insider redacted the placeholder metrics for clarity, but kept the graphs and charts intact.
Currently, most building design decisions are made by a group of different parties communicating over the phone, email, and transferring files.
This disjointed nature can drive up costs, as it’s very easy to leave responsible parties out of the decision-making process.
Project delays are a major cause of over-budget builds.
The process map on the right shows Ahuja’s energy modeling process before building Cove.tool.
By centralizing decision making, and automating much of the energy and money-saving calculation, Ahuja said Cove.tool can reduce the time needed to make design decisions down to one hour.
This slide showcases the four principles behind the product. Cost optimization is especially important to bring money-conscious landlords onboard to energy efficiency.
This slide indicates the sorts of clients that Cove.tool is already working with, an essential way for an early-stage startup to show the seriousness of its existing userbase.
The metrics on this slide are not real, as Cove.tool declined to share its growth rate. It is an example of the slide that it uses to show investors how fast it grew.
This slide, which is an example and does not share the firm’s real figures, would show how the company is able to retain customers for longer than one build while also adding more users.
Another slide with altered metrics, this time to show investors what they really want to see, increasing margins indicating a path to long-term profitability.
This slide highlights the three co-founders, each of whom brings a separate set of skills and experiences. As always, this slide is very important to investors.
The deck ends with a grand goal, to have Cove.tool used in all buildings within 5 years, driving massive revenue for the company and meaningfully reducing buildings’ emissions.
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