The first thing that comes to mind when you step into Whole Foods might be, “Wow, the peaches look great and they’re local!” or “What in the world can I make for dinner?”
But what many people aren’t thinking about is the refrigeration system that keeps their food fresh. Refrigeration systems power everything from grocery stores to hospitals to storage warehouses. As such, they are huge consumers of energy, accounting for 9.1% of commercial electricity consumption in the US today. Innovation in the refrigeration system could spell huge gains in terms of lowering energy consumption.
Axiom Cloud has a pipeline that includes two major supermarket chains (accounting for approximately 7% of the entire US supermarket industry) and multiple electrical utilities. The San Francisco Bay Area startup is bringing a change to the refrigeration system, and investors and the media are noticing. Having raised $7.4 million in 2023 with an investment from Blue Bear Capital, the company is poised to change the future of the energy landscape.
Propel(x) spoke to the CEO of Axiom Exergy, Amrit Robbins, to get the inside story on how Axiom Cloud is keeping things cool. (Disclosure: The interview is from 2016 when the company was called Axiom Energy).
Propel(x): In your own words, tell us a bit about Axiom Exergy.
Amrit Robbins: We are in the business of energy storage, and we’re focused on bringing a specific type of energy storage into the market for any facility that uses refrigeration systems – axiom storage. Our “Refrigeration Battery” offers a 10x lifecycle cost advantage over other forms of energy storage that are currently available on the market for our specific type of customer.
This means supermarkets, who run on very low margins, can avoid peak demand charges in the middle of the day, when energy prices are the highest, and protect their inventory from spoilage during power outages. Utilities can also utilize the asset to reduce strain on the grid. Rather than storing electricity directly, the Refrigeration Battery stores a useful service: refrigeration.
We’re storing cooling for later use while electricity is cheap, and we do that by freezing tanks of salt water. And then we’re able to use those frozen tanks, or that “stored refrigeration”, to provide cooling services during the on-peak hours of the afternoon when it’s hottest outside and when electricity is most expensive.
This enables our customers to reduce the consumption of electricity during those peak hours of the afternoon when electricity costs go through the roof
Propel(x): What is the size of Axiom Exergy right now?
Amrit Robbins: Right now Axiom Exergy has a team of thirteen people. We’re in a unique position compared to a lot of other energy-related and also hardware companies, in the sense that we have customers lined up out the door who are signing contracts with us and putting money on the table for our products. Now we’re striving to keep up with that demand.
Propel(x): Help us understand the innovation here vis-a-vis the current technology. What is the leap here?
Amrit Robbins:Thermal energy storage–which is what the refrigeration battery is–has been around for decades. The idea of cooling something and storing it for later use has been around since things like air conditioning systems were popularized.
We are using that exact same scientific concept, and we’re even borrowing components from the air conditioning industry. But we are adapting it to refrigeration. In air conditioning, you’re using either air as the heat-transfer fluid, or you’re using water or glycol as your heat-transfer fluid. All of the thermal energy storage solutions that have been available on the market for the last three to five decades serve these types of cooling systems.
What we’re doing is adapting that old technology to the third class of cooling system that exists today, which is called “direct expansion cooling”. One of the biggest technologies that fit into those subsets of technology is the supermarket refrigeration system. Certain types of air conditioning fit into the direct expansion cooling category as well, which are on our product roadmap over the next 36 months.
Propel(x): Could you talk us through your most current round and tell us about some of the obstacles you’ve faced because of the fact that you are a deep technology company?
Amrit Robbins: Well, I would say we break Propel(x)’s mold a little bit, in the sense that we haven’t developed a new material or scientific concept. When we first started out with Propel(x), we asked, “Do we actually fit the mold of what you’re trying to do?” We’re not a deep technology company. We’re not fabricating any new components at all or any new materials. Instead, we’re taking old concepts, using 100% off-the-shelf parts, putting these parts together in a new way, and productizing it for a specific industry need.
We’re very much a “built-to-order company,” in that we have designed a tailored solution to help our specific class of customers solve a very real, very painful problem that they face. That’s it. I think the strongest reason that we’ve been able to raise money to date and to gain customer interest is because we are unbelievably focused on solving a very specific and painful problem.
Propel(x): So, why did Axiom Exergy decide to fundraise on Propel(x)?
Amrit Robbins: Because Axiom Exergy is an energy-related company and we are a hardware-related company. We found that Propel(x) investors are the folks who are a little bit disillusioned with making a quick buck on esoteric software apps. We offer a credible alternative with a real market opportunity and an environmental and social mission that people can relate to.
Rather than improving the state-of-the-art marginally, we are offering a 10x improvement.
Additionally, investors who are on Propel(x) have some understanding, or at least some appetite for getting into businesses that involve hardware. And you know hardware is just fundamentally more expensive and has longer time scales than software generally, from a product development standpoint.
Propel(x): Since you are fresh off this fundraising effort, we always like to ask our entrepreneurs to give tips to fellow entrepreneurs on some of the learnings they had during the fundraising process. Any tips that you would like to share?
Amrit Robbins: The number one tip that I tell every entrepreneur that I speak to is: to get third-party validation. Basically, whenever you’re talking to any potential customer, stakeholder, supplier, partner, manufacturer, or investor, you should be able to walk into the conversation, make a bunch of claims, and then say, “You don’t have to take my word for it. Here’s third-party evidence that everything I’m saying is true.”
Tech and product-market fit validation are arguably the most important of all. You can work with national labs or industry partners to get technology validation, and any sort of measurement & verification you can get from third parties is really helpful. Product-market fit validation must come from customer commitments or at least letters of interest.
On the fundraising side, you want other investors to be your third-party validation, to say, “Look, these guys are worth taking seriously.” That’s what we’ve found to be an incredibly powerful catalyst for getting new investment. So that’s my number one piece of advice. Go out and get third-party validation for every aspect of your business
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