Arcadia raises $125M more to cap huge growth year in solar and software

The Washington, D.C.–based startup raised a total of $325M in 2022 and says it’s now on a path to near-term profitability.”
By Julian Spector

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Arcadia entered the spring with a blockbuster fundraise, and now it’s closing out the year with even more investment.

The software startup pulled in another $125 million Friday for its data platform that connects customers to clean energy. Arcadia is perhaps best known as the nation’s largest manager of community solar subscriptions, but its Arc data platform is also used by 300 other companies to deliver clean-energy services tailored to the needs of each customer.

Magnetar Capital led the growth equity round, joined by existing investor Keyframe Capital and Macquarie Asset Management’s Green Investment Group. Keyframe also invested back in May in the $200 million round led by J.P. Morgan’s sustainable growth equity team. That round set Arcadia’s valuation at $1.5 billion.

A spokesperson for the company told Canary Media that the valuation hasn’t changed in the latest funding round but said Arcadia is on a path to near-term profitability.”

Clean-energy data can feel a bit abstract. Arcadia turned itself into a billion-dollar company by putting in the work hours to wrangle customer energy data from utilities across the nation and then painstakingly systematize it. If, say, an electric car company wants to tell its drivers what it will cost them to charge up at any time in any particular utility territory, that information is not readily accessible; the car company can pay Arcadia to avoid the tedious work of figuring it out, giving drivers better insight into how to charge their cars.

Earlier this year, Arcadia acquired Urjanet, which had been doing similar work internationally. That acquisition expanded Arc’s reach with data integrations for 9,500 utilities across 52 countries and a greater focus on data for businesses. This brought Arcadia’s coverage to 95 percent of U.S. utility customers, CEO Kiran Bhatraju told Canary Media at the time, and it brought its number of employees up to 700 people.

The latest funding shores up Arcadia’s finances to take advantage of several industry tailwinds heading into 2023. The Inflation Reduction Act is expected to turbocharge just about any branch of the clean-energy industry, from solar to home electrification to electric vehicles.

Community solar, a major early market for Arcadia, is growing rapidly nationwide. California adopted legislation this year to break open a community solar market in the largest solar state, which could add gigawatts of new capacity. The decision this week by California regulators to upend the traditional business model for rooftop solar sales in the state could prompt more consumers to look at community solar, which supplies clean energy and bill savings from offsite projects.

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Julian Spector is senior reporter at Canary Media.