Anode Labs raises $4.2 million to build web3 energy grid

Development company Anode Labs has raised $4.2 million in a seed round to build a decentralized network that will pay individuals and small businesses for their energy storage assets. 

The round is co-led by Lerer Hippeau and Lattice Capital, according to a company release. Other backers include VaynerFund, CoinShares and Digital Currency Group. 

Co-founded by Jason Badeaux, Dallas Griffin and Evan Caron, Anode Labs is building the React network, which will enable individuals and small businesses to connect their storage batteries to the network and in turn earn passive income in the form of cash and tokenized assets for their contribution. 

Building the network

“Our work to date has mostly been around the energy side,” said Badeaux in an interview with The Block. “So, the integration with the energy assets, recording the telemetry off the assets itself, controlling and dispatching those assets.” 

Most data from those assets will live on web3 data warehouse Space and Time, which has raised $30 million this year. An oracle will then connect the relevant data from the warehouse to the React network. 

The Anode team does not plan to build its own chain for React but will instead deploy it on an existing network, Badeaux said.  

Inspired by Helium

The React network is inspired by Helium, the decentralized internet protocol, which demonstrated how the supply side of a network could be bootstrapped, Badeaux said. 

To start with the React network will work with preferred partners, Badeaux said. It then hopes to expand to an open API that anyone with a storage battery can connect to. 

A storage battery is typically a backup generator in a residential home.  In the future, the startup also hopes to connect to home electric vehicle chargers, according to the company release. 

An October research report from Piper Sandler showed a 50% year-over-year increase in residential storage installations so far this year, according to data from the Energy Information Administration.

Solving for liquidity fragmentation

The energy resources from individuals can then be pooled together and contracted to participants in the power market to provide stability to power grids, Badeaux said. 

“The virtual power plant space today suffers from liquidity fragmentation across many small aggregators; very high costs to aggregate, so very high customer acquisition costs; very high take rates, significantly higher than platforms like Apple app store, 30% plus is quite typical take rates in the aggregation space, very low transparency and very low customer engagement,” Badeaux said. 

“Crypto is really a solution to all five of those problems,” he added. 

The funds from the raise are being used toward scaling the team as well as purchasing energy test units, Badeaux said. 

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