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Imagine: fast-growing startup raises a high round of eight figures. Then, a year later, it decides to raise another one. Investors are lining up and this time promising more money while giving the company a healthy valuation boost.
What’s wrong with this photo? It’s 2023, a year many investors have rolled up the welcome mat, and the company in question isn’t a fintech or a web3 or even a SaaS startup. But bucking the trend, Span, a hardware-focused climate technology company trying to replace the electrical panel in the home, is a device most people only think about when the hair dryer causes the lights to go out.
Just over a year ago, Span announced it had closed a $90 million Series B that valued the company at $410 million pre-money. Today, the startup is announcing a $96 million Series B2 that values it at $600 million. (Why B2 and no renewal? Because the company was able to raise its valuation after the first Series B.) The round was led by Wellington Management with participation from existing investors including Congruent Ventures, Capricorn Investment Group and Alexa Fund.
“As we looked at both our own growth ambitions and external factors,” Arch Rao, founder and CEO of Span, told TechCrunch+, “and when we look at programs like the Inflation Reduction Act, we actually see the opportunity to accelerate across the this year or next year, and so the idea of raising additional capital was born.”
The Inflation Reduction Act hasn’t changed the company’s business model, but it has changed its business plans, Rao said. “It’s helped us move our addressable market forward by at least five years.”
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