How THG Energy Solutions CEO Daniel Frey grew THG Energy Solutions to $5.4M revenue and 1K customers in 2024.

guys thg energy launched back in 2011 today doing about 200 000 a month in Revenue up from 125 000 a month just a year ago they work with over a thousand uh folks uh powering their businesses powering their utilities these are like schools hospitals Etc they help these folks report on gas emissions with tracking and measurement that's what they're sophomore software platform does he charges five dollars per meter uh per month as they scale looking to grow now they did a 10 million dollar seed round back in 2019 that caught a 50 million valuation looking to raise six six million now at hopefully close to 75 million valuation we'll see if we can get it done hey folks my guest today is Daniel Frye it's got 35 years of experience in the energy marketing and trading worlds building and acquiring energy Market marketing companies at thg they've built more than 35 energy in energy industry Partnerships excuse me to help companies expand revenue and product offerings to include sustainable and energy management data and Technology follow along with the podcast at thg energy.com Daniel are you ready to take us to the top yes all right so just be clear this is a this is a software platform correct yeah it's a software as a service platform uh we start with uh utility bills and we work with more than 300 000 accounts uh commercial industrial multi-facility accounts we're in all 50 states and we're in 20 countries uh we help uh companies what does that mean sorry when you when my audience hears you say 300 000 accounts they don't know what an account means to make that real uh so you can think about it as a utility meter uh or or something that needs managed and measured uh to help you with your sustainability or your Energy Efficiency so who's you is it me I'm a member that owns a house or is it a local government that needs to charge me it's a it you you can think of it if you're a business and you have a utility bill that you're paying and processing and tracking that's an account for us so we help companies pull together their sustainability efforts around electricity natural gas water waste uh recycling uh so all of those typically start with a utility account uh in some cases they might be a diesel or a propane bill or something like that but all of those uh we put them in one spot we provide auditable and verifiable uh greenhouse gas emissions tracking and measurement uh and we also help customers identify Energy savings uh through you know better energy management and uh particularly around electricity an area called demand management or demand response and Daniel when you say 300 000 utility meters is it a one-to-one ratio of utility meter per company or can one company have a 10 000 utility meters yeah so our our typical customers are the multi-facility customers that are trying to manage many buildings and facilities and they're paying and processing lots of utility bills so you can think about it as a school district or a hospital with a healthcare organizations everywhere or banks with branches or manufacturers with you know warehousing and and Manufacturing and distribution so most of our clients have lots of buildings and Facilities they're trying to manage lots of utility accounts and pull that into one place so Daniel how many unique schools hospitals Banks do you work with over 10 000 customers that comprise those uh 300 000 accounts okay so average 30 utility meters per account yeah that's that's correct interesting okay that's very very helpful give me the I guess give me the pricing here so what what is what's the average customer pay you per month or per year to do all this yeah so uh first of all the customer spends a lot of time paying and processing their own bills a lot of that is manual and it's old processes and it's inefficient and it doesn't gather the data that they need to be able to report uh to greenhouse gas emissions so there are some some new mandates around the report requirements as well as just a a stronger drive to pull together this information so we provide a much more efficient process for Gathering and paying and processing your utility bill and that actually saves the customer a lot of time and effort and money and streamlines that process and provides a much better data platform than what most companies are used to so we think about it in terms of you know uh five dollars per account per month uh to to get started a utility meter or per account per per utility meter that that we're measuring and managing okay so if the average account has 30 utility meters times five the average customer is paying about 150 bucks a month yeah that's correct and and uh and that gives them really good access to the SAS platform all of the energy analytics it helps him get started on greenhouse gas emissions uh we there's there's a lot more to that customers want to engage but you know that that gives them a really good uh start on Energy Management Energy Efficiency and greenhouse gas emissions oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're 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side of our business we pull together a lot of multi-facility multi-sourced data and put it in one spot so if you're trying to track your solar panels and your batteries and you're behind the meter uh information and integrating that into a platform that's the other piece of our business before we get to that though 300 000 utility instruments that you're installed on today at five bucks a pop would mean you're doing about 1.5 million a month in a revenue is that accurate that's that's accurate for that side of the business uh there's also additional opportunities to well hold on Daniel before you go away from that side of business though so if you're doing 1.5 today just we can calculate growth rate what was just that part of the business doing one year ago uh one year ago that same business was was probably about 30 percent less so it's about a million a million dollars yeah and uh Daniel is that a month or a year just to be clear per year oh got it got it so it's not 1.5 million a month it's five dollars per year per meter well so there's there's a lot of uh Nuance to to that number and there's a lot of different uh services and relationships around this so we although we track 300 000 accounts uh we we're actually engaged in about 20 000 active meters and we're seeing an opportunity to expand to another 250 000 300 000 accounts so we don't we haven't deployed our full service offering to Daniel I just want to make this really clear for the audience so if you're if you're deployed on 20 000 meters at five bucks a meter then that's you're doing about a hundred thousand dollars a month on that part of the business correct across still 10 000 unique customers correct so they each have two active meters on average then well so so here's here's what...