Investment Notes #9 – Evnex
We are excited to announce Evnex as Movac’s 9th investment for Fund 5. Evnex has developed an intelligent residential and workplace electric vehicle (EV) charging solution, which can integrate with electricity utility providers to facilitate load control. Movac was the largest investor in this $2.7m seed round.
The fleet of the future
EV adoption in New Zealand is accelerating. According to the Ministry of Transport, NZ’s EV and plug-in hybrid fleet reached around thirty thousand in July 2021, a forty percent increase on the year prior. There were approximately two thousand EV registrations in July alone, a four-times increase on the same period last year. The Climate Change Commission’s recent report highlights that electrification of the country’s 4.5 million road vehicles is a critical element of reaching NZ’s net-zero emissions goal by 2050. They are forecasting EVs could make up at least half of total light-vehicle imports by the end of the decade. By 2035, around forty-six percent of all light vehicle travel may be in EVs. We anticipate that the government’s recent EV subsidy will be a strong tailwind to support these forecasts.
Types of EV charging
Two electric charging networks are evolving – public (think rapid-charging facilities at your local fuel station) and private (think a charger installed in your garage or charging facilities at your workplace car park). Trends suggest that c.80% of charging may be done at home, with c.15% in the workplace and c.5% via public charging networks. It’s not until most drivers are doing long-distance trips that they will bother to stop at their local fuel retailer or highway charge point. Instead, the typical EV owner will charge their vehicle overnight after coming home from work. But what happens to the electricity network when a few million EVs are plugged in at 6 pm?
Managing grid load
The fragility of NZ’s electricity network was recently exposed, with record winter electricity demand leading to blackouts across the country. Mass EV adoption is only going to add to this grid load. Electricity utility providers are acutely aware of the need to be able to manage distributed residential and workplace EV charge points in order to avoid significant capital upgrades. This is where Evnex’s smart EV chargers and integrated software solution comes in. Evnex has developed an AC (Alternating Current) charger and interoperable software which enables electricity distributors to dynamically manage the times that EV chargers draw power. Evnex currently facilitates the largest network of residential/workplace chargers in NZ and has relationships with more than ten electricity distributors in NZ, including Vector and Powerco.
Having previously focused on B2B, Evnex has recently launched a B2C offer targeting new EV owners who want to install smart charging infrastructure at home. Evnex is providing a hardware and installation bundle to make this process as simple as possible for consumers. This initiative will drive the expansion of the Evnex network, to achieve a scale and reach that provides extremely valuable load control capabilities to electricity network partners. We see Evnex as well-placed to continue to penetrate the growing NZ market and we hope to see them spread their wings internationally, starting with Australia.
The NZ VC Village
Throughout the investment process, we have been enormously impressed by Founder and CEO Ed Harvey. Ed has a degree in Electrical Engineering from the University of Canterbury and was a hardware engineer at Dynamic Controls before founding Evnex in 2014. Ed immediately impressed Movac partner Mark Vivian when Mark ran an NZTE office hours session in Christchurch in 2019. Ed showed strong leadership skills and clearly articulated the complexities and challenges facing the NZ energy market.
As with all our investments, there were many people involved throughout the process. Firstly, thank you to NZTE for their ongoing support. Secondly, thank you to Movac Operating Partner Rob Shaddock for his hardware DD work and Movac CTO-in residence Jeremy Ginsberg for his software DD report. Thank you to K1W1 for co-investing on this round, as they have for a number of our portfolio companies. Finally, a big thank you to Ed and the wider Evnex team for allowing us to support them through their growth journey. We are delighted to be on board. Love our Village!
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