Stem Confirms It’s Looking for Potential Buyers
The energy storage pioneer has a new growth story to tell around selling through solar installer partners.
Bay-Area startup Stem used to sell standalone batteries to save businesses money on their utility bills. Now the company increasingly reaches customers through channel partners in the solar industry, and that shift may strengthen its position in recently revealed sales talks.
Energy finance publication SparkSpread reported last week that Stem is seeking a buyer with the help of Morgan Stanley and Greentech Capital Advisors, with bids due recently.
The following day, Stem published new details about a three-tiered solar partner program, through which it will provide technical and software assistance to commercial solar installers that are seeking to add batteries to their deals. Hot on the heels of the buzzy report, Wednesday’s announcement could have been intended to regain control of the narrative.
But in an interview Friday, Stem Chief Revenue Officer Alan Russo told Greentech Media that the SparkSpread story was accurate.
“Everything I described should make it no surprise that people are interested in acquiring Stem,” he said, referring to earlier discussion of the new solar channels. “As a leadership team, we need to take that seriously.”
That perspective indicates a subtle evolution from last summer, when CEO John Carrington told GTM that he was more interested in growing the company and executing its strategy than seeking an imminent exit for investors.
“Good things happen with execution,” he said. “By no means is there a ‘for sale’ sign up in front Stem today.”
The energy storage market has grown since then, posting record deployments and revenue in 2019, according to data from research firm Wood Mackenzie. Overall U.S. installations are expected to triple in 2020, on a megawatt basis, and increase twelvefold from 2019 to 2024, although commercial batteries represent a fraction of the overall market.
Increased interest from solar developers only enhances the energy storage growth potential, Russo added.
“There are a lot of companies that need to decide, ‘Am I going to make it or am I going to buy it?'” he said. “We have a 10-year head start.”
Those years have given Stem ample opportunity to learn and adapt as the tiny storage market grew to where it is today.
Hitch your wagon to the sun
Stem’s latest business model reflects changes both internally and in the market at large.