Autonomous building tech company PassiveLogic is gearing up to ship its product in 2023

To address those inefficiencies (and aim to conserve about 30% of a building’s energy output), PassiveLogic’s 90-person team has been building a platform that offers buildings level five autonomy—where artificial intelligence is used to optimize millions of different control paths. The tech is meant to work in the background, controlling each part of an industrial or residential building’s functions, without needing the human input that smart devices require. PassiveLogic has been testing its technology with an early subset of customers, and it plans to start shipping its initial product at the beginning of next year, Harvey says, declining to comment on the initial contracts. The company also plans to sell its cloud services on what is basically the equivalent of an app store for buildings.

The funding for PassiveLogic started pouring in from VCs at the end of 2020. That October, Keyframe Capital Partners and Addition led a $16 million Series A round for the company. Earlier this year, it raised a $34 million Series B round, and then an additional $15 million in April, led by Brookfield Growth, the growth investing arm of real estate giant Brookfield, which is one of the companies now working with PassiveLogic. Harvey told me earlier this year he was spending  “a good bit” of his week now fielding inbound investor calls.

But the interest from venture investors has only come more recently. “Five years ago, we were at the idea stage with a little bit of prototype technology, and we went up and down Sand Hill Road,” Harvey says, noting that venture capitalists kept saying: “I don’t get it.” Interestingly, that’s a sentiment I’ve heard before from other founders pitching complicated, innovative technologies.

It’s the Department of Energy that has been most bullish on the technology’s potential, according to Harvey, who says that “government’s been a big part of how we got to this point.” The Department of Energy funded the company’s initial tech development via a grant that PassiveLogic used to develop its digital twin technology, which can be used to digitally describe spaces, systems, and occupants of a building, and develop control systems automatically.

Now that the technology is getting closer to initial deployment and PassiveLogic is working with Brookfield and Amazon warehouse owner Prologis, the DOE is circling back to the startup with $1 million for a two-year partnership between it and the Pacific Northwest National Laboratory (PNNL). Together they plan to conduct research and develop deep artificial intelligence for predictive building control, with an aim to improve the energy efficiency of four million buildings by 2030—lining up with a key priority of the current administration to substantially reduce net greenhouse gas pollution by that year.

An important part of the project is that PNNL will provide open-source generic code libraries for deep learning models, so that other industry stakeholders (think control companies or engineering firms) can integrate the software into their own workflows, according to Draguna Vrabie, Chief Data Scientist at PNNL.

The framework “is not specific to buildings,” Vrabie tells me. Her team of data scientists and computer engineers are thinking bigger about what the predictive technology could mean for a wider range of application areas and complex energy systems.

Harvey may be a founder without a product quite yet on the market, but he gets energetic when talking about the downturn.

For him it means more people available to hire, and, very importantly, cleaning up the supply chain. Bottlenecks stemming from the pandemic have forced PassiveLogic to put in orders for parts they won’t need for another three years. Those time tables are already shrinking, Harvey says.

But Harvey also says he is ready for venture capital dollars to start pouring into more transformational projects, rather than “lightweight” technologies that turn a quick profit.

“The investments in actual technology are lower than they’ve been in 40 years,” Harvey says, adding later: “I think this is going to be a cleaning cycle for some of that behavior that has been maybe profitable to a certain extent, but not very meaningful.”

After all, while Harvey initially struggled to explain to VCs what his team was building, it didn’t take long for his mechanical and electrical engineers, installer, and technician customer base to get the idea—particularly if you ask John Arfman, whose company, TEC Systems, manages the technology systems for about 250 buildings, primarily in New York City, and has been involved in the testing of PassiveLogic’s product. Arfman points out that they are still a ways out from widely installing PassiveLogic’s predictive control technology, but he’s optimistic and very enthusiastic about what he has seen so far.

“When I first met Troy, I was not positive that he [could] pull this all off. But if he can pull off 50% of it, he’s going to transform our entire industry,” Arfman says.

Until Monday,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Correction: A previous version of this newsletter misstated the number of employees at PassiveLogic.

Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

– IDRxa Boston-based clinical-stage cancer treatment biopharmaceutical company, raised $122 million in Series A funding. Andreessen Horowitz and Casdin Capital led the round and were joined by investors including Nextech Invest, Forge Life Science Partnersand others.

– PayIta Kansas City-based digital government services and payments platform, raised $90 million in funding from Macquarie Capital Principal Finance.

– Orange EVa Kansas City-based EV manufacturer, raised $35 million co-led by S2G Ventures and CCI.

– Arena AIa New York-based autonomous operating system platform provider, raised $32 million in Series A funding. Initialized Capital and Goldcrest Capital led the round and were joined by investors including Peter Thiel, General David Petraeus, Michael Siebleand other angels.

– Moseya San Francisco-based employment and tax compliance platform, raised $18 million in Series A funding. Canaan led the round and was joined by investors including Gusto, SemperVirensand Charge.

– Locketa Los Angeles-based photo-sharing widget, raised $12.5 million in funding. Sam Altman led the round and was joined by investors including Sugar Capital, Costanoa VenturesInstagram co-founder Mike Krieger, Quora CEO Adam D’Angeloand others.

– Stridea New York-based multichain liquid staking protocol, raised $6.7 million in seed funding. North Island VC, Distributed Globaland Pantera Capital co-led the round and were joined by investors including Imperator, Cosmostation, Everstake, Staking Facilities, 1Confirmation, Cerulean Ventures, Node VC, Peak Capitaland Road Capital.

– Sportsbox AIa Bellevue, Wash.-based 3D motion capture technology company, raised $5.5 million in seed funding led by EP Golf Ventures.

– glambooka Berlin-based SaaS beauty platform, raised $2.5 million led by Endel CEO Vlad Pinsky.

– Clutcha Houston-based digital marketplace company, raised $1.2 million in pre-seed funding. Precursor Ventures led the round and was joined by investors including Capital Factory and HearstLab.

– Roofa Santiago, Chile-based solar power marketplace, raised $1 million in seed funding. Positive Ventures and Collaborative Fund co-led the round and were joined by investors including Harvard Business School Rock Center Accelerator, Harvard Innovation Labsand Chile’s Former Minister of Energy Juan Carlos Jobet .

PRIVATE EQUITY

– Accelalphabacked by Century Parkacquired Frontera Consultinga Hong Kong, London, and New York-based Oracle cloud consulting services provider. Financial terms were not disclosed.

– Highview Capital acquired WilMara Vernon, Calif.-based meat packing company. Financial terms were not disclosed. Per terms of the deal, WilMar will merge with Highview’s portfolio company, Randall Foods.

– Thompson Street Capital Partners acquired a majority stake in Recovery Benefit Groupa Memphis-based subrogation services provider. Financial terms were not disclosed.

EXITS

– Siemens acquired Brightly Softwarea Cary, N.C.-based asset management and facility operations management SaaS provider, from Clearlake Capital Group for $1.875 billion.

OTHER

– Amgen agreed to acquire ChemoCentryxa San Carlos, Calif.-based rare diseases biopharmaceutical company, for $3.7 billion.

– Gilead Sciences agreed to acquire MiroBioan Oxford, U.K.-based biotech focused on autoimmune health, for approximately $405 million.

– Dentsu Group acquired a majority stake in Extensionsa Pune, India-based mobility, cloud engineering, and UX technology and services firm.

– Roofstock acquired RentPrepa Lancaster, N.Y.-based tenant screening company for landlords. Financial terms were not disclosed.

– Topia acquired Pearl Global Techa San Francisco-based immigration risk engine and knowledge base. Financial terms were not disclosed.

IPOS

– Burjeel Holdingsan Abu Dhabi-based health care provider, plans to raise at least $750 million from an initial public offering in Abu Dhabi this year, according to Bloomberg.

SPAC

– Bridger Aerospace Group Holdingsa Bozeman, Mont.-based aerial firefighting services provider, agreed to go public via a merger with Jack Creek Investment Corp.a SPAC. A deal would value the company at $869 million.

– Plastiqa San Francisco-based payments provider, agreed to go public via a merger with Colonnade Acquisition Corp. IIa SPAC. A deal will value the company at about $480 million, including debt. Kleiner Perkins, B Capital Groupand Khosla Ventures back the company.

FUNDS + FUNDS OF FUNDS

– Top Tier Capital Partnersa San Francisco-based investment manager, raised $925 million for a fund focused on late-stage climate tech co-investments.

– HighPost Capitala New York-based private investment firm, raised $535 million for a fund focused on the consumer sector.

PEOPLE

– AE Industrial Partnersa Boca Raton, Fla.-based private equity firm, promoted Nathan thick stone to managing director and head of the AE Industrial Partners Aerospace Opportunities Fund.

– Kickstarta Cottonwood Heights, Utah-based venture capital firm, hired Kat Kennedy as general partner. Formerly, she was with Degreed.

– TSG Consumer Partnersa San Francisco-based private equity firm, promoted Drew Weilbacher to managing director.