Editor’s note: This developing story was updated on August 27 to reflect Latitude Media‘s confirmation that Swell is shutting down. Read that story here.
Something is going on with distributed energy storage company Swell Energy.
After a whirlwind few years that saw the company raise over $100 million in equity, team up on virtual power plant deployments, and acquire Renu Energy, the company appears to be closing at least a portion of its operations: rumors of a shutdown, or at least the closure of its installation arm, are making the rounds online, with some customers stating they received emails from Swell last week announcing the company’s decision to cease all contract work. (Latitude Media has not independently verified those claims.) Separately, the company’s Twitter and Facebook pages have been taken down.
Things are hardly less chaotic on the employee side: In early May, one employee wrote on Glassdoor that Swell had laid off “a huge batch of people with zero warning.” In late June, another wrote that the company was downsizing. Last week, a number of employees across engineering, customer support, and product said they are currently looking for work.
If the rumors are true, they highlight the difficult road startups in the VPP market are facing, given the relative immaturity of the sector, and the thin margins it has experienced to date.
Swell has taken an approach that’s perhaps even more challenging because of its status in the world of distributed energy resources: while companies like Sunrun and Tesla have been able to pivot toward VPPs, taking with them an established customer base from their legacy solar and storage tech, Swell is facing the challenge of building out a platform and deploying a VPP via channel partners. And it’s doing so in a market where no-one seems to have quite figured out how to make money.
At least until recently, Swell has both installed and financed distributed energy storage, aggregating them into VPPs. In late 2022, the company raised a Series B round from investors that included Softbank. That funding, Swell said, would target the rollout of customer energy storage systems and virtual power plants.
After its acquisition of Renu earlier this year, which Swell said would add around 5,000 would-be participants to its VPP portfolio, the company was reportedly said it was working to raise a Series C funding round. At the time of the acquisition, positions at both companies were terminated, and one former employee wrote on LinkedIn that the move came at a time when Swell itself was “actively needing to fundraise.”
Swell didn’t respond to a request for comment.
