Nippon Gas hopes to put the spark back into COzero
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.
Frequently Asked Questions about this Article…
Nippon Gas bought about a one-sixth stake in Sydney-based COzero to help develop COzero’s energy-efficiency product EnergyLink. The Japanese firm came on as a cornerstone investor to provide expertise and to help position COzero for a planned initial public offering (IPO).
EnergyLink is COzero’s energy-efficiency product that gives clients real-time monitoring of electricity use and helps identify where power consumption can be made more productive. The company and its investors see energy efficiency and smart energy products as a key driver of future growth.
Yes. COzero’s CEO Nick Armstrong said the company is positioned for an IPO in the next 12–24 months, targeting a market value of about $80 million to $90 million. Nippon Gas acted as a cornerstone investor in anticipation of that listing.
Founded in 2007, COzero experienced very rapid early growth—revenues rose by an average of 604% in the three years to June 2011, earning top spot on BRW’s Fast 100 in 2011. Growth later stalled and the company cut staff, but it generated $4 million in after-tax profit in the last business year.
Shifting government policies have created boom-and-bust conditions for many firms in the carbon and energy-efficiency space, including COzero. The article notes that the Coalition’s plan to scrap a price on carbon would extend uncertainty, which is one reason COzero aims to diversify away from reliance on carbon and energy-efficiency certificates.
Beyond providing expertise to the venture, Nippon Gas is expected to take some of COzero’s technology back to Japan. Japanese firms are seeking energy-smart solutions amid energy shortages following the Fukushima nuclear reactor disaster, making COzero’s products potentially valuable in that market.
COzero’s chief executive is Nick Armstrong. He led the company through its rapid early growth and was the youngest debutant on BRW’s Young Rich List in 2011, with a fortune the magazine pegged at $22 million shared with partner Geoff Alexander.
The investment signals external validation of COzero’s EnergyLink product and helps position the company for an IPO, potentially diversifying revenue away from carbon certificate trading. However, the company still faces regulatory and policy uncertainty in the carbon and energy-efficiency market, which investors should be aware of.
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