HData - Investment Announcement
/Today’s Partner PoV comes from Principal Blair Simpson…..
At Frontier, we established themes that drive our areas of investment interest. Additionally, we use tested business frameworks to identify companies which have the highest likelihood of success and where we can add the most value, based on our unique strengths as a firm. We love to back founders and companies who are uniquely positioned to transform existing industries and disrupt the status quo.
That is why we are excited about HData, our latest addition to the Frontier portfolio. HData provides business intelligence and compliance software to energy utilities that report to the Federal Regulatory Energy Commission (FERC). At scale, the company’s FERC Pro platform can become the single source of verified data for the energy ecosystem of producers, regulators, and interveners.
Early Market Validation: Building technology is hard – finding customers can be even harder. Frontier looks for companies that have demonstrated that a market segment is willing to buy, and more importantly, pay for, a solution. HData has large, paying customers such as utility giant Nexterra, and has also secured a strategic partnership with Alabama Power Company. HData is competing within an industry that has budget and is ripe for disruption, and is already delighting customers along the way.
B2B SaaS: While many business models can create value, Frontier focuses mostly on business-to-business enterprise software. HData sells its FERC Pro compliance solution directly to energy utilities. HData has a broad solution, so over time the company can expand its footprint within a customer to deliver even greater value across business divisions. This is a time-tested ‘land and expand’ strategy that B2B SaaS companies use to grow quickly. Beyond the initial target market of utilities, there are additional segments HData may serve in the future.
Timing for Growth: We look for companies and founders that know how and when to accelerate a proven model. In the venture-backed startup world, this means putting capital to work for hyper growth. With its first cohort of customers, the company has achieved early signs of product-market fit, and dialed in a customer acquisition strategy. At an industry level, new regulations are changing how utilities do business and provide a tailwind for HData, which has the purpose-built solution to support customers adapting to these changes. With internal operations finely tuned, and market forces behind them, the company is ready for its next phase of go-to-market.
Team: We saved the best for last. Building a business in today’s competitive environment requires the right type of entrepreneur. This means uniquely qualified individuals who thrive in the chaotic world of free market disruption; the leadership team at HData fits this profile. Frontier was fortunate to build its relationship with HData over time, allowing us to get to know this group and see their potential through multiple touchpoints. CEO and co-founder Hudson Hollister previously founded Data Coalition, where he successfully lobbied the US Congress to pass the Digital Accountability and Transparency Act in 2014.
We believe HData has a clear business advantage, is competing within a large market, and has the right team in place to disrupt and win. The company is aligned with Frontier’s investment themes of Data & Personalization and Real-Time Feedback, because it unlocks unique data sets that inform business decision-making, provides new ways to leverage data within the broader energy ecosystem, and gives utilities faster insight into how their businesses operate. We are thrilled to partner with this team and support the company’s next chapter.