In a short few years, Jason Massey’s commute from Mebane to work has ballooned, stretching further and further down Interstate 40. But he doesn’t mind the traffic, with his startup, Ndustrial.io, continuing at its current growth trajectory.
Started out of American Underground in Durham in 2011, Ndustrial.io — a company that is using software and internet-of-things technology to digitize factories — is moving into a freshly renovated office on Fayetteville Street in downtown Raleigh later this year.
The company is trading a cramped one-floor office, also on Fayetteville Street, for two floors at 224 Fayetteville St., a historic property that was once home to a Woolworth’s.
The company’s steady growth in the past two years necessitates the new office to house its growing workforce, which has tripled to 28 employees this year and is still growing.
Part of the impetus of swapping Durham for Raleigh in 2018 had to do with that growing headcount. As it brought on more employees, the company found most of them lived closer to downtown Raleigh and the commutes to Durham were becoming too rigorous.
Since the company started — originally using the name Sustainable Industrial Solutions — the businesses model has changed quite a bit, moving from the installation of things like solar panels to creating a software management platform to help factories run more efficiently and more digitally oriented.
The goal is to take all the data produced by the different systems, from a decades-old refrigeration system to a warehouse management system, and put it all in one algorithm. Then, using information-of-things technology and its software to monitor energy usage, Ndustrial.io can pinpoint exactly where factories can save money in their energy usage, resulting sometimes in millions of dollars in savings.
‘We’ve never really raised any real money’
In 2015, the company changed its name to Ndustrial.io and took on $1.4 million in private-equity money, but it hasn’t returned to the well for more funds yet. Massey said the company is currently running on revenue and is making a profit.
“We’ve never really raised any real money, which is weird,” said Massey, a former venture capitalist based in the Bay Area of California who returned to North Carolina to be closer to family and raise his children. “The joke is I should be better at pitching VCs having been a VC,” Massey said.
“But our business model is different,” he added. “And it’s more of a function of what the customer needs versus what we think an investor wants.”
What an investor wants, Massey thinks, is a software company that can scale quickly. The company does actually have that — it checks the box of “software as a service and an energy management system,” he said.
But Massey also thinks the company brings a lot of value by providing a professional services team that physically visits factories, conducts energy audits and consults on what efficient energy solutions might be best for them. That requires a lot more time and effort and is an addition to the software service. But Massey believes that hands-on approach keeps customers with them and attracts new ones.
“Once we put boots on the ground, and we can see that factory and understand what systems are in place,” he said, “it allows us to build a better proposal and quote for ultimately what kind of a digitization journey that they’re going to have.”
He does think the company will return to investors. The company has been preparing slide decks to present to investors, and Massey, who runs the company with Natalie Birdwell, the chief operating officer, said they have begun conversations with investors they know.
A $4 million case study
The business case for Ndustrial.io is all measured in dollar signs. Once the company gets a plan in place, upgrading these factories can lead to significant savings.
The company works with all industries, but so far Ndustrial.io has found a lot of success with cold-storage companies, which run huge refrigerated storage facilities that store meat and produce.
“They are these big, massive 500,000-square-foot freezers,” he said, pointing out that a firm that freezes pork chops for Smithfield is a customer. “They (spend) hundreds of thousands of dollars a month in energy spend. And if we can make a small dent, that’s a big number.”
The cold-storage company Lineage Logistics turned to Ndustrial.io in 2014 to find savings in its energy consumption. The company, which has more than 120 facilities around the world, has about 25% of the third-party cold chain market in the U.S., according to a case study produced by AT&T. The company’s electric bill runs tens of millions of dollars.
Ndustrial.io, began work on 78 of the company’s warehouses, hooking up a thousand real-time sensors per warehouse to track temperatures and allow them to adjust temperatures more efficiently. Then, using Ndustrial.io’s software platform, the company can time when it is cheapest to use energy from the grid. Utilities can often charge more at high-demand times, like a hot afternoon, than during the evening when there is less demand.
Ndustrial.io’s system will send signals to super-cool the warehouse during low-demand times at night, then dial back its refrigeration system during high-demand periods.
Between 2014 and 2017, the implementation of Ndustrial.io’s service has curbed energy costs by 8% at the warehouses where the system was installed, leading to $4 million in cost reductions, the case study said.
An option for expansion
As the company moves into its new office at the end of the year, Ndustrial.io will have to decide how quickly it wants to grow, from raising capital to hiring more employees.
In addition to the two floors it has under contract, the company has an option for a third floor — a move that the company is currently debating.
One potential way to expand, Massey said, is to make its software open source and try to build a community of developers around it. The third floor could become a place for a suite of developers to experiment with the company’s software, even if they aren’t all working directly for Ndustrial.io.
But the company has always operated under an optimistic mindset, Massey said.
“What we’ve noticed is, every time we’re at that inflection point,” he noted, “if we would just lean into it, it’s paid off.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate