Why We Invested in 5

Energize Capital is excited to announce our significant investment in 5, a technology-enabled energy advisory firm serving commercial and industrial customers across North America. This investment is the latest of Energize’s Endurance strategy—Energize’s platform for backing digitally-enabled climate solutions that are profitable or nearing profitability. 5 also represents Energize’s first tech-enabled services investment, leveraging their Level5 data analytics platform to fuel expert consultancy services. Energize’s John Tough and Kevin Stevens will join the board.

The C&I Energy Puzzle

The energy transition isn’t just about generating more clean power—it’s about making that power accessible, reliable and affordable across the economy. Core to this shift is the commercial and industrial base of energy users—manufacturers, hospitals, commercial real estate companies, school districts, data centers and more—that today account for 60% of retail electricity demand in the U.S. Over 20 million C&I organizations connect with the grid across the U.S.; these entities consumed over 2,400 TWh and spent a collective $258 billion powering their operations in 2023 alone. At such a high volume, energy choices can have compounding effects both on the organization’s operations and the entire energy economy.

Over the past decade, these organizations have seen the energy landscape become dramatically more complex, driven by several key factors:

• Energy markets have become more volatile, with the standard deviation of energy prices tripling in the past five years (EIA). It is more expensive than ever to buy power during peak demand, driving consumers to advisors who can actively manage their energy consumption and deploy strategies like demand response, on-site storage or selling excess generation back to the grid.  
• Even when energy use is optimized, utility bills continue to rise. Aging infrastructure, load growth and the proliferation of renewables are driving a major increase in transmission & distribution charges, with these charges projected to increase 50% by 2034 (EIA). Rising utility charges make it increasingly difficult for customers to reduce total energy costs, especially as they are nearly impossible to navigate alone.  
• Blackouts and grid disruptions have become more commonplace. Extreme weather and underinvestment in grid infrastructure have weakened the energy landscape, forcing consumers to invest in resiliency strategies to protect their margins and keep operations running smoothly.
• Energy assets have diversified. As the cost curve has come down for renewable technologies, C&I consumers have begun to proactively manage their full energy picture, building microgrids and on-site generation to reduce risk and manage costs.  
• Many C&I consumers continue to work to decarbonize operations both for economic and social reasons, responding to local efficiency policies as well as internal stakeholder pressure.

With so many factors, the gap between a well-managed energy procurement plan and a passive one can be massive. And companies rarely have the in-house expertise to navigate this growing complexity and minimize their energy costs.

Introducing 5

This is where 5 steps in. Amid complexity and transformation, 5 is a trusted energy advisor, aiding large industrial, commercial and public sector companies with power procurement, energy-related risk management, demand-side management, sustainability, bill analysis, compliance and regional incentives. Founded by energy experts, 5 has built one of the strongest advisory teams in energy today and provides the best client experience in the market, helping over 4600 organizations like Empire State Realty Trust, Xerox, and Floor & Decor. Don Friel, EVP of Redeemer Health said, “Our partnership with 5 quickly paid dividends as we were able enter into contracts for both natural gas and electricity that will significantly reduce our operating costs. Their advice and expertise have been a great complement to our own facilities team.”

Since their founding in 2011, technology has been a differentiator for 5. Their robust digital platform, Level5, enables the team to analyze energy power market trends and price movements and helps clients better understand their budgets, costs, and power usage. This combination of advanced tools and deep market research has empowered 5 to optimize the whole energy story for their clients, providing the best possible procurement and energy support for their individual situations.

5’s performance speaks for itself, with industry-leading client retention of well over 90% due to a relentless pursuit of excellence for its clients. This, in turn, creates a company where people come to learn, grow, and provide exceptional service: in the last three years, both the size of 5’s team and client count have grown by over 50%—a testament to a dedicated culture that attracts talent and clients alike.  

At Energize, we invest in digitally enabled climate solutions that unlock and scale the energy transition. By facilitating C&I adoption of renewable technologies, driving resource efficiency, and facilitating a more digitized and distributed energy landscape, 5 does just that. After years of analyzing the complexities of commercial and industrial electrification, we believe 5 represents the best hybrid model in the market, serving a unique and growing customer base that depends on cutting edge technology – and industry experts to help them utilize it. As climate software experts, we believe we are well-positioned to provide unique insights to help 5 expand their digital capabilities, reach new customer bases and continue their durable, profitable trajectory.

“We spent years looking for an institutional investment partner that checked all the boxes – cultural fit, understands the space, shares our vision, and resources we could lean into for growth.  After meeting dozens of firms, we were thrilled to check all those boxes with Energize.  And as the digital world continues to transform the energy world, we had the added bonus of partnering with a firm at the forefront of energy and sustainability technology who can accelerate our best-in-class client services.” – Brian Hayduk, CEO of 5

“We’ve been fortunate to know the 5 team for several years and it’s been clear through every conversation that we share deep alignment—on culture, on our commitment to clients and innovation, and on the importance of expertise in energy. Having worked around energy markets over 15 years, I know how rare it is to see operational excellence and high-touch service combined with true digital leverage. This investment reflects the core of our Endurance strategy: backing durable, expert-led businesses with software at their core and real room to scale. We’re excited to support the team as they expand their platform.” – Kevin Stevens, Partner & Head of Endurance

Building for the Future

5 was founded in 2011 in Irving, Texas, by five energy market veterans—Brian Hayduk (CEO), Jon Moore, Josh Coleman, Eric Plateis, and Jeff Schiefelbein—who shared a vision of building a company that brought client experience back to the forefront the energy advisor model. Their people-centered vision has remained to today as the team has grown to over 75 employees across North America and won countless awards, including Best Workplaces in America (Inc. Magazine) and Fastest Growing Companies in the Americas (Financial Times). With this partnership, the 5 team is continuing to grow across operations and product, with the same focus on clients and culture that has made them successful to date. To find out more about job openings, check out: https://www.energyby5.com/careers