Gareth Evans of Veckta: 5 Questions

Online marketplace platform Veckta aims to help owners determine where on-site solar and energy storage pay off across their portfolios, and then procure it at competitive prices.

Two weeks ago, Origin Ventures led an oversubscribed $11 million Series A round to accelerate Veckta’s expansion. Veckta works with national real estate and corporate site owners, including Regency Centers, Phillips Edison & Company, Enterprise Mobility and Lithia & Driveway.

Founded in 2019, San Diego-based Veckta’s 17 full-time employees are led by CEO Gareth Evans, who plans to use the funding round to hire salespeople as well as to increase channel partnerships, marketing, and software development, including artificial intelligence.

Last week, Commercial Observer spoke with Evans about the current energy market and its impact on commercial real estate, along with the economic tensions going forward in the competition between fossil fuels and alternative energies.

This interview has been edited for length and clarity.

Commercial Observer: What are the major issues facing a proptech energy company like Veckta as power costs continue to rise in real estate right?

Gareth Evans: We’re helping our customers challenge those risks. 

Rates have gone up 23 percent in the last four years — 5.6 percent just this year alone — so I think the risk for the real estate industry is twofold. One, those rates are now going up faster than inflation, and it’s hitting more boardrooms and more leadership discussions. And, two, it’s very unpredictable and volatile. Trying to plan your business around that — manage net operating income, profitability, tenant expectations — is increasingly challenging. 

So our job is to support them to manage the risk and turn energy from essentially a passive consumption into a profitable asset that they can monetize and lean into as an opportunity.

How does Veckta do that?

Our specialty is supporting companies with portfolios of sites.

With just a property address, we take that and convert it into a business case where we assess thousands of data points such as utility tariffs, cost of energy, and load consumption of the property. We have market data around the cost of equipment, construction and financing. We know all the incentives in the market, so we take all of that data, run it through our intelligence engine, and then we can help companies assess where they should build an on-site energy system, including solar, batteries and other technologies.

Clients ask, “What is it worth to me? How do I communicate to my internal stakeholders?” Once they’ve done that, though, they’re excited about the opportunity — whether it’s managing costs or creating a new revenue opportunity through participating in demand response programs, or grid services, or selling energy to their tenants or others — they then can go and procure that through our marketplace of pre-vetted and pre-sorted suppliers that match the opportunity in terms of size, scale, location, and financing needs. 

It’s really about simplifying the buying process and putting the buyer in control so that they can act with confidence versus being just sold to by someone in the market.

How do you gather, vet and collate these data points? Is AI involved?

We use some complex mathematics to actually look at what is essentially a baseline: How is the company consuming energy today? Then: How can we beat that in terms of cost, reliability, sustainability? 

Our platform takes all of those data points — which come from our own research and development, public sources and paid sources — and we aggregate all that. We look at every plausible combination of technologies available in the market, to see what combination will deliver the best technical and financial outcomes. 

A lot of AI is involved in sourcing that data, analyzing it, and actually optimizing the ultimate solution. A lot of data science as well. Then we use AI on the marketplace side, because once quotes come back from suppliers in the market, you have to be able to compare and contrast them, identify who meets the expectations of the request for proposals we’ve submitted, and who should be prioritized and ultimately short-listed for award.

How is client demand for your services? Did that lead to your $11 million Series A?

Today we’ve assessed more than 34,000 sites across this market, and what we’re finding is that approximately one in three already beat utility energy prices versus generating and storing their own. Meaning, one in three are generating their own energy or coming to you in a marketplace to get a better price. 

One in three pencils economically today, and that is the opportunity scope for us. That represents about $3 billion worth of capital investment into the market today.

In places like California, we’re seeing customers reduce their energy costs by as much as 70 percent. For example, we had a cold-storage company that was paying PG&E 25 cents a kilowatt hour. Then, a developer who was trying to sell them a system they could buy for 15 cents. We ran a competitive process through our marketplace, and they’ve just signed a 20-year deal where they’ll buy it for eight and a half cents.

Going forward, what do you believe will happen as the alternative energy market competes with fossil fuels?

That’s really interesting, isn’t it? Because the catalyst for me starting this business was I spent two years in Iraq at the end of the Gulf War. I was a contractor with Worley, working in-country on behalf of Tier 1 oil and gas companies. We were mostly based on the U.S. Army base in Basra. I saw where we were getting our energy from then, unlocking oil and gas reserves in the Gulf and shipping them around the world for us to burn in power plants to generate energy. 

Even then, it was vulnerable, it was risky, and we’d fought wars over it. We’re seeing exactly the same thing right now with the Strait of Hormuz. The risk of relying on traditional fuels is that you have to rely on traditional supply chains. And, any conflict anywhere in the world, because it’s a global market, so it impacts everyone. 

We’re seeing that at the gas pump and with energy rates right now, but we can really supplement our ability and de-risk the opportunity. If you’re using a solar panel that’s on your roof, and it’s working and doesn’t need any maintenance, you don’t have to rely on a supply chain to fuel it. It’s passively there working for you all the time. You combine that with a battery, and now you’ve got something that can help you ride through a power outage, and manage time of use tariffs and peak demand charges. 

It’s all about how you combine these technologies to achieve your outcomes. In some cases the systems we design still have a gas generator because they are needed for backup purposes. 

So, we need all fuels, but we need to be smart about what fuels we use, when and how. And, definitely, the less risky, more self-controlled option is using renewable sources combined with storage technologies.

Philip Russo can be reached at prusso@commercialobserver.com.