Nippon Gas hopes to put the spark back into COzero
COzero, a former BRW Fast 100 firm, aims to recover its formula for explosive growth with some help from a new investor, Japanese energy firm Nippon Gas.
Nippon Gas has bought about a sixth of COzero to help the Sydney-based firm develop its energy efficiency product EnergyLink, COzero's chief executive, Nick Armstrong, said.
"It's going to position us for an [initial public offering] in the next 12-24 months," he said. "They came on as a cornerstone investor in anticipation of that."
The IPO, which would target a market value of $80 million to $90 million, would help further diversify COzero away from a reliance on trading of carbon and energy-efficiency certificates.
As with many firms in the industry, shifting policies created boom-and-bust conditions for COzero. The Coalition's plan to scrap a price on carbon entirely will only extend the era of uncertainty.
Founded in 2007 using credit cards, COzero saw revenues soar by an average of 604 per cent in the three years to June 2011, earning it top slot on BRW's Fast 100 list 2011. Mr Armstrong was also the youngest debutant on the BRW Young Rich List that year, sharing a fortune the magazine pegged at $22 million with partner Geoff Alexander.
Growth stalled, though, and the company had to cut staff to stay afloat. But those efforts have paid some dividends, with the firm generating $4 million in after-tax profit last business year, Mr Armstrong said.
He said the company's appeal to Nippon Gas was its use of new energy-smart products that allow clients better real-time monitoring of electricity use and to identify areas where power consumption can be made more productive.
"Energy efficiency is looking like being the next energy super cycle," he said.
While Nippon Gas will provide expertise to the venture, it will also be looking to take some of the technology home as firms in Japan battle with energy shortages in the wake of the continuing Fukushima nuclear reactor disaster.
"The Japanese, because of the nuclear crisis, are really looking for anyone who can apply technology to help use energy a bit smarter," Mr Armstrong said.