Picture this: Fast-growing startup raises a high eight-figure round. Then, a year later, it decides to raise another. Investors line up, and this time they pledge more money while giving the company a healthy valuation bump.
What’s wrong with this picture? It’s 2023, a year in which plenty of 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 is Span, a hardware-focused climate tech company that’s trying to replace the home electrical panel, a device most people only think about when the hair dryer causes the lights to go out.
Just a little over a year ago, Span announced that 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 not an extension? Because the company was able to raise its valuation following the initial Series B.) The round was led by Wellington Management with participation by existing investors including Congruent Ventures, Capricorn Investment Group and Alexa Fund.
“As we were looking at both our own growth aspirations and extraneous factors,” Arch Rao, founder and CEO of Span, told TechCrunch+, “and as we look at programs like the Inflation Reduction Act, we actually see the opportunity to accelerate over the course of this year or next year. And that’s what prompted the idea of bringing in additional capital.”
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 pull forward our addressable market by at least five years.”