Wisconsin company acquires Pika Energy

Ben Polito, president and co-founder of Pika Energy

Pika Energy, the venture-backed company in Westbrook that’s developed a residential-scale smart battery and power control system for solar power, has been acquired by a company in Wisconsin that designs and manufactures power-generation equipment.

Waukesha, Wis.-based Generac announced the acquisition this morning in a news release. The deal closed April 26. Terms are not being disclosed.

Ben Polito and Joshua Kaufman, who studied engineering together at the Massachusetts Institute of Technology, founded Pika in a basement in Gorham in 2010. They created the company with a goal to make backyard, residential-scale wind turbines more affordable and accessible to the average homeowner. The company successfully brought the turbines to market, eventually moving into its own manufacturing space in Westbrook, but eventually realized that the underlying platform technology the company had developed had wider applications for the renewable energy market. It developed its current smart battery storage system in collaboration with Panasonic.

Maine Startups Insider has reached out to Polito, Pika’s president, and will update the story if we receive a response.

Investors benefit

Pika has raised at least $8 million, according to filings with the U.S. Securities and Exchange Commission. Its most recent filing, from September 2018, said it had raised $2 million in its latest equity round. The year before it raised $2 million in convertible debt.

Investors in Pika include the Maine Venture Fund, CEI Community Ventures, Brookline, Mass.-based Clean Energy Venture Group, and several members of the Maine Angels and Portsmouth-based eCoast Angels.

John Burns, managing director of Maine Venture Fund, called Pika’s acquisition as a “huge win” for the company, its investors, and the larger startup community. MVF invested $700,000 in Pika, and Burns confirmed that its return was better than 2.5x, dating back to its earliest investments in 2013.

“Generac is keeping a substantial work force here in Westbrook, and the additional Generac resources will certainly help to continue the innovative exciting technology at Pika,” Burns said. “A good day for Maine, Pika employees, and this clean energy technology.”

Sam Fratoni, chair of the Maine Angels, said 30 members of the angel investment group invested in Pika Energy since its first round in 2012. He said the members collectively, along with the Bangor Angels fund, had invested more than $2 million in the company.

Like Burns, Fratoni called Pika’s exit a milestone. Members of the Maine Angels have benefited from a few other exits, but always a small contingent. This is the first Maine company with a significant exit that Maine Angels have invested in as a large group, he said.

Fratoni, who is himself an investor, said the members who invested received at least a 2x return on their investment, based on when they invested (which means the earliest investors likely got a higher multiple).

“It’s a real Maine success story,” Fratoni said. “It should be encouraging to other Maine startups. You can do it in Maine and be successful.”

The ripple effect in the community of a successful exit is that those angel and VC investors who gained a return now have a replenished pool of capital they could reinvest in other promising local startups.

CEI Community Ventures invested $450,000 in the company.

Pika supplements Generac’s existing business lines

Generac’s news release said the acquisition represented its entrance into the energy storage market.

“Pika’s integrated battery storage solutions are a crucial component in developing a comprehensive system to store and consume clean energy,” Aaron Jagdfeld, Generac president and CEO, said in a statement. “The visionary ideas and technology that Pika has developed give us a considerable edge as we expand into the rapidly developing market for energy storage.”

In response to a question from Maine Startups Insider, Ryan Fitzgerald, a Generac spokesperson, confirmed that the company would maintain Pika’s Westbrook facility and that Ben Polito would stay on with Generac as president of the company’s new Energy Storage business unit.

“Generac is glad to be part of the Maine community, and are excited to be staying in the Westbrook facility. We are also excited about the skill and dedication of the Pika employees and we believe they are energized by what Generac can bring to the table, giving them the ability to accelerate their growth mission,” Fitzgerald said.

In the release, Polito said Pika’s battery storage technology was a good fit for Generac.

“Pika energy storage technology, combined with Generac’s distribution strength and demand creation capabilities, will make this solution immediately available to more users. We are thrilled to be a part of the Generac team,” Polito said.

In a 2017 interview with Maine Startups Insider, Polito said that the company would consider being acquired in order to fulfill its mission.

“Of course we consider exit options in shaping our growth plans—there’s a good chance that at some point we’ll be better able to fulfill our mission as part of a first-tier global industrial giant, or by going public. But at this point our main focus is on building great products, providing the best support we can to our rapidly expanding customer base, and growing a strong, sustainable business,” Polito said at the time.