DOUBLING DOWN ON NEARA

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26 MAY 2022

DIGITAL TWINS TO DRIVE A CLEAN ENERGY FUTURE

Having first partnered with Neara in June 2021, we are thrilled to be deepening our commitment by investing in Neara’s A$20 million Series B round alongside Skip Capital, Square Peg Capital and successful founders from SafetyCulture and Canva.  

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THE PROBLEM

Infrastructure asset owners are subject to strict regulatory liability and risk management obligations regarding the condition and resiliency of their assets. Maintaining and upgrading these assets is tedious, costly, and often requires teams to manually inspect assets before engineers can determine how to restore network capacity. In just the past few years, we have seen flooding and bushfires in Australia, wildfires in California and Texas’ Big Freeze, and with the increasing prevalence of extreme climate events, there is both an increased focus on the resiliency of critical infrastructure assets, and a significant increase in cost burden on asset owners.

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THE SOLUTION

Neara’s platform builds interactive, engineering-grade 3D models (“digital twins”) of these critical infrastructure assets at network-scale, enabling customers to run real-world scenarios across a broad spectrum of high-value use cases. For example, using Neara, asset owners can simulate the impact of flooding on their assets, at a range of different levels of severity. This combination of best-in-class digital twins and scenario analysis tools, allows customers to assess current and future risk, optimise network performance and resiliency, mitigate the impact of extreme weather and climate change, automate and digitize costly manual activity, and deploy capital more efficiently.

What does this mean in practice? In December 2021, Neara partnered with Ausgrid to build a 3D digital twin of the entire Ausgrid network. This digital twin allowed Ausgrid staff to remotely design and monitor their poles and wires rather than undertaking on-site maintenance, consequently improving network efficiency and reliability for Ausgrid’s end customers. As a digital innovator, Neara is helping Ausgrid accelerate the adoption of renewable generation and distributed energy resources and guiding the company to support the clean energy mix of the future.  

For Endeavour Energy, Neara’s digital twin platform has enabled Endeavour’s team to better assess the bushfire risk of 12,000 km of power lines and 160,000 poles in areas covering nearly half of Endeavour’s network. In March 2021, Neara simulated the impact of major flooding in the Hawkesbury and Nepean rivers. Instead of waiting for it to be safe to conduct visual inspections, Neara’s digitally modelled impacts eliminated 300 hours of inspection time and allowed Endeavour to target their response to their most at-risk customers.  

Neara is future-proofing our society’s critical infrastructure.  ‍

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INVESTMENT THESIS

STRONG EXECUTION-FOCUSSED FOUNDER AND TEAM

We think that developing the world’s most-used mapping tool is just about the best background possible for a founder building digital twin software. Founder and CEO, Daniel Danilatos previously worked as a Software Engineer in the team responsible for creating GoogleMaps & GoogleWave. He subsequently founded Helix Collective, an engineering consultancy specialising in custom built software for start-ups and larger scale enterprises. When Daniel consulted on a project for his wife’s engineering company, he crafted the idea of applying 3D models to critical infrastructure and the first iteration of Neara was born!  

Partnering Daniel is Jack Curtis who serves as Chief Commercial Officer and Chief Operations Officer. Jack has significant experience in sales and has developed deep sector knowledge in the power, utilities, and infrastructure space. Prior to joining Neara, Jack led First Solar’s APAC and International strategy efforts, working in New York and Sydney for over 12 years.  

As Chief Product Officer, Karamvir Singh provides over 15 years’ experience as a software engineer, designing enterprise solutions across the banking and materials industries. Entrepreneurship is encased in Karamvir’s DNA having founded and exited numerous infrastructure, education, and consulting businesses.  

Together, the founding team have demonstrated sector knowledge and a bias towards action reflected by their impressive traction and market entry success. As Neara grows its team by ~70% in 2022, we have full confidence that Daniel, Jack, and Karamvir will guide Neara to achieve its goal of empowering global infrastructure clients.  

GROWTH TRAJECTORY SUPPORTED BY CONVERGING INDUSTRY TAILWINDS

Neara’s growth trajectory is supported by a number of industry tailwinds. Substantial increases in infrastructure expenditure are expected across a range of developed markets, highlighted by Biden’s US$2 trillion infrastructure package, with global infrastructure spend expected to rise from US$2.8 trillion today to US$3.7 trillion in 2030.

Not only is the total asset base of infrastructure expected to grow significantly, but the increasing frequency of severe climate events has also led to an increased emphasis on the resiliency of critical infrastructure assets, particularly in legacy asset bases that are decades old and particularly vulnerable to adverse weather impacts.  

Finally, as the world becomes increasingly digital, adoption of advanced Industrial IoT technology, such as Neara, will become more and more mission critical for owners of infrastructure assets across the globe.  

IMPRESSIVE TRACTION IN BOTH DOMESTIC AND GLOBAL MARKETS

Neara currently counts every distributor in NSW and Victoria as customers, and services over half the total length of electric utilities in the Australian market. Since Day 1, Neara has been able to deliver strong value add to all its customers, having converted close to 100% of non-ARR customers into ARR customers within 12 months and substantial expansion of revenue from existing enterprise customers over 3 years.

TOP TIER UNIT ECONOMICS

The numbers simply don’t lie. Without getting too deep into the details, Neara has experienced rapid year-on-year revenue growth, has top-quartile gross margins, best-in-class net dollar retention and a capital efficient sales model resulting in exceptional LTV/CAC. Combine this with zero enterprise customer churn, and you have all the indicators of a highly sustainable business model that is primed for growth.  

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WHERE TO NEXT?

We believe that Neara will become a must have digitisation partner for infrastructure asset owners across the globe. Having already established strong footholds in the Australian market, and demonstrated strong early traction in the US market, Neara is ready to start becoming a dominant player globally, as it continues to develop and enhance its value proposition to customers.  

As utilities companies will shift towards digitising the management of assets and critical infrastructure, Neara will be there every step of the way. And we’re proud to be investing again in their journey.  

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There's a number of open roles at Neara, make sure you explore the latest opportunities.