This article is part of a series covering the most exciting start-ups featured at the most recent TechBUZZ conference, held at AOL Fishbowl Labs. To read the rest of the articles in the series, click here.
How often do you hear about a strong storm barreling through an area and knocking out the power for hours, if not days? It seems like this is an every-other-week occurrence.
In fact, the average power outage takes seven hours to locate and fix, because the current methods for finding the exact location of the outage are crude and time-consuming. These outages cost power companies millions of dollars in lost revenue and cause their customers no end of frustration. How can these outages be shortened or avoided all together?
Athena Power to the rescue!
Pinpointing the problem
Athena Power, a D.C.-based start-up, has created a smart sensing tool called the UFD 1000. The UFD 1000 is roughly the size of a handheld supermarket basket and contains ultra-low-powered circuits and sensors that allow power companies to monitor the health of their underground power lines. Rather than spend hundreds of millions of dollars to replace their aging infrastructure all at once, power companies can place Athena's UFD 1000 units all along their underground grids.
The UFD 1000 monitors power cables, sending real-time data back to the power company, allowing the company to see where its lines are performing below standards. This can help the company to identify problem areas and potentially replace deficient lines before they go down. And in the event of a power outage, Athena Power's UFD 1000 can pinpoint the location of the fault, enabling technicians to more quickly and easily locate and repair the fault. The UFD 1000 has rugged housing, can be submerged, and runs on its own power.
Athena's current customer base includes Exelon Corp. (NYSE: EXC) subsidiary Baltimore Gas & Electric, Duke Energy (NYSE: DUK), and NextEra Energy (NYSE: NEE) subsidiary FPL Corp. CEO Raj Lakhiani expects that the company will have 10 blue-chip power company customers by the end of the year. With 60% gross margins, a growing customer base, and a problem that needs a good solution, Athena Power is an exciting start-up to keep an eye on.
You can watch Lakhiani's 4-minute pitch at TechBUZZ below:
And that's how it all began...
Athena Power, was founded in 2013, but Lakhiani has been focused on clean tech and "revolutionizing the grid" for about 10 years now. As Current Group's VP of smart grid products in 2011 and 2012, Lakhiani worked closely with the major utilities, helping them with other types of sensing products and services. One relationship in particular proved most valuable. As Lakhiani was preparing to leave Current Group, a friend of his from one of the major utility companies pulled him aside and told him exactly what the utility company needed but wasn't developing internally: a device that could help them more easily locate outages without requiring them to spend millions of dollars on infrastructure upgrades.
The start-up world is littered with failed companies -- companies that thought they had a great idea but never validated their product or service idea with real customers. However, Athena Power offers a solution to a real need that was hand-delivered by an employee at a large potential customer. So Mr. Lakhiani teamed up with a small group of colleagues from Johns Hopkins and MIT, and for more than a year they prototyped and refined their UFD 1000, getting critical feedback each step of the way from big players in the industry.
What do they need?
Most young start-ups need cash, so we should never be surprised when they say they need "capital to grow." In Athena Power's case, it's unclear what the company's financing needs are at this point. The company has revenue and a growing customer base. It wasn't explicitly raising money as part of its TechBUZZ presentation. When I asked Lakhiani what he needed most besides cash, he said he was always looking for good connections in the industry and introductions to decision makers at the major power utilities.
David Forrest is the co-founder of ScreenDoor and a longtime Fool. He doesn't own any of the stocks mentioned in this article. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.