London-based smart grid deeptech Ionate has raised $17m in Series A funding led by AlbionVC. The round comes as investors focus on Series A funding for grid management technologies, despite an overall downturn in the sector last year.
New investors include US non-profit defence investor In-Q-Tel (IQT), Tokyo-based JGC MIRAI Innovation Fund, Santander’s InnoEnergy Climate Fund and deeptech Singaporean VC Antares Ventures.
Recent data from investment tracker Dealroom shows global investment in smart grid technology fell significantly in 2024 — from around $2.7bn to $1.1bn — but startups raising a Series A have been insulated from the downturn.
Founder and CEO Matthew Williams told Sifted the money would be used to extend operations in Europe — specifically in Austria, Spain and Portugal — and fund its entry into the US market.
David Grimm, Partner at AlbionVC, who led the firm’s investment, tells Sifted: “In a grid infrastructure market dominated by a handful of entrenched players, investors appear likely to continue favouring those with a repeatable go-to-market strategy and demonstrable market traction.”
The five-year-old company previously raised £3.3m seed round in 2022 led by deeptech VC firm IQ Capital, and with the participation of cleantech impact investor VC Cycle Group, deeptech climate investor Zero Carbon Capital, Smartworks (the investment arm of Austrian energy supplier Wien Group), and the University of Edinburgh’s venture fund, Old College Capital.
All but the latter two remained investors in Ionate’s Series A.
What does Ionate do?
With the rise of distributed energy resources — like EVs and heat pumps — and the emergence of data-guzzling sectors like AI, energy systems “are being asked to do things that they were never designed to handle,” Williams tells Sifted.
“The foundations that we had in place since Tesla and Edison are entirely passive: poles, wires, and transformers. They have no built-in monitoring, let alone dynamic control capabilities,” he says.
“And this was fine for a long time because power quality and flow issues were not common features of generation and consumption…But issues aren’t uncommon or isolated anymore, and the grid is getting more complex and delicate by the day.” This is the problem smart grid technologies like Ionate addresses.
Ionate’s “drop-in, all-in-one replacement” consists of hardware and software components. The hardware replaces transformers — often over a hundred years old — with high-tech equivalents capable of spotting and fixing power disturbances in real time.
Ionate’s AI-powered Aurora software platform sits on top, providing data insights about the energy system’s performance.
Who are Ionate’s customers?
“This year we are seeing a lot of traction and market pull from not only data centers but… companies involved in manufacturing processes and more traditional industries”, Williams explains, “as huge electrification, energy efficiency and power quality is becoming more of a challenge.”
“This technology is no longer a nice-to-have, it’s a must have,” he adds.
And the US increasingly understands this more than most. “Major aging infrastructure challenges” present a prime opportunity for Ionate to enter the US market, says Williams, with the National Renewable Energy Laboratory’s recently announcing that 60-80% of service transformers need replacing by 2050.
Williams is looking to make some American hires and plans to move across members of his team who are currently spread across Ionate’s London and Vienna offices.
Having previously founded Faraday Grid — a smart grid startup which went bust seven months after receiving £25m in backing from Adam Neumann, the co-founder of WeWork — Williams explains when launching Ionate, he “understood the opportunity in the space very well,” underlining that “we’ve achieved significantly more than my previous company ever did.”
Read the orginal article: https://sifted.eu/articles/exclusive-smart-grid-startup-ionate-raises-17m-series-a/
