A stealthy utility company headquartered in Raleigh has snagged a minority investment from Volvo.
Sidney Hinton, CEO of Utility Innovation Holdings, confirmed that the Swedish automaker was a central backer behind the startup's latest fundraising round, a $19.8 million raise that closed in April and an add-on of nearly $3.5 million disclosed this week to the U.S. Securities and Exchange Commission.
Hinton, the former CEO of Wake Forest-based PowerSecure – bought out in 2016 by Southern Company in a $431 million deal that valued Hinton's personal stake at more than $11 million – is tight-lipped about the new company.
He said it’s focused on the “decarbonization of the utility grid,” and that the raise will go toward global expansion. The firm develops micro-grids around its own proprietary solutions, Hinton said. It also does resilience work for utilities as they work to tie carbon-free assets into their own infrastructure.
Hinton said the company has closed major contracts with “household names,” and is doing work for European utility companies. But he declined to reveal specific partners.
He also declined to say how many employees the startup has, though the headcount does include some PowerSecure veterans.
Hinton said he’s building a firm that could one day be ready for an initial public offering. Utility Innovation, which has a small office in Raleigh and a Triangle-area lab, may be “ahead of schedule” along that journey.
“The market will ultimately decide the path we take,” Hinton said. “We very much view there is an opportunity to build a generational company here.”
Volvo is one of its “two largest investors,” he said, declining to give names of other backers. Hinton first made the connection with Volvo back in the PoewrSecure days. He approached Volvo with the latest opportunity.
“They were the driver for the entire round – everyone else was using their preemptive rights,” he said.
Volvo, in a statement, said the investment “accelerates entry into the utility sector to further develop [its] battery energy storage subsystem and power generation portfolio as part of its road to net zero.”
Hinton said it’s tough to finance growing companies in 2023. Key for his firm was the fact that it’s getting results, he said.
“You have to have real customers paying real money and you have to demonstrate an ability to cash flow your own company,” he said, adding that Utility Innovation is not dependent on the capital markets. “For us this was very much a strategic decision. We wanted a global partnership, very specifically Volvo.”
Volvo understands the power market and the power system technology, Hinton said.
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