C3 ENERGY COMPANY

ASSESSMENT

TEAM 1

Divyesh Kumar, Daniel Ryan, Priya Thyagarajan, Pratik Mehta, Nalin Desphande

April 20, 2015

INTRODUCTION

• C3 Energy offers smart grid analytics Software-as-a-Service (SaaS) solutions

• Enterprise wide approach provides utilities with end-to-end system visibility across the supply and demand side of smart grid operations

• The core of its analytics solution is its platformo Integrates massive amounts of

disparate datao Applies sophisticated multilayered

analyticso Provides highly usable portals that

generate actionable real-time insights

MANAGEMENT TEAM

• Management team has deep experience in developing and managing companies, understanding of utility and software industries, and expertise in law and environmental policyo Thomas Siebel: Founder, Chairman, and Chief Executive of Siebel

Systems (large software company that merged with Oracle in 2006). A billionaire, formerly revolutionized customer relationship management (CRM)

o Ed Abbo: former Senior Vice President at Oracle, responsible for their application and SaaS products

o Peter Eidelman: Served as Chief Financial Officer at a number of companies and is a certified public accountant

o James Connaughton: Served as Executive Vice President at two large utilities and was chairman of the White House Council on Environmental Quality

o Pete McCarthy: Held various leadership positions at Silver Spring Networks (smart grid hardware company)

CAPABILITY POSITION AND UNCERTAINTIES

• Current Positiono Utility tested, market ready products (fully commercial)o Intangible assets - patents, management team, industry

connections, and partnerships

• Major Uncertaintieso Dependency on energy infrastructure upgrades (e.g. T&D, AMI,

EMS)o Dependent on systems integration partners such as Accenture

for supporto Utility desire for “complete package” producto Target markets dependent on regulation and policies

VALUE CHAIN

POSITIONING FOR VALUE CAPTURE (PVC)

• Low (to moderate) Dependencies

• Low (to moderate) Leveragability

• Moderately difficult to Replicate

• High Connectivity

COMPANY VALUATION

Top Down Valuation:• Total of 8 VC rounds (through 2013) with total funding of $64M: 3 in 2009, 4 in 2010 and 1

in 2013• IRR requirement of 40-70%

o Exit value after 8 years: $415Mo Exit value after 10 years: $1.1B

• IRR requirement of 20%o Exit value after 8 years: $60Mo Exit value after 10 years: $90M

Bottom Up Valuation:• Revenue at year 5: $60 million• Years to Maximum Revenue: 15 years, Maximum Revenue: $308M• Revenue at exit: 8 years $170M, 10 years $230M• Proxy: Teradata used for COGS, SG&A, R&D, and EV/EBITDA margins • Calculated EV for C3 Energy $312M

INVESTABILITY

• Low (to moderate) Scalability

• Moderate Profitability• High Capital Intensity• High Diversification

CONCLUSIONS AND RECOMMENDATIONS

• C3 Energy is a well-funded and well-connected startup • C3 Energy has high value capture potential

C3 Energy could increase value capture potential by:• Partnering with energy infrastructure manufacturers to

capture value in other segments of value chaino Smart Meters (AMI)o Substation (SCADA)o Transmission and Distributiono Grid Operational Management (EMS and DMS)

• Increasing focus on B2C business model

THANK YOU!