Energy Empire: The Nurse Who Built a $400 Million Generator Company

ANA is an S2G portfolio company, so before we hand it over, I’m joined by Gokul Raghavan from our energy team to talk about why we invested. After this episode, we’ll be back to our regular programming. Also, please stay tuned for important disclosures at the end of this episode.

Gokul, thanks for joining me.

Gokul Raghavan: Thanks, Tonya.

Tonya Bakritzes: So mobile power isn’t the flashiest corner of energy. What made you want to invest here and why ANA?

Gokul Raghavan: Yes, it’s a great question, Tonya. And maybe taking a step back, even before all of the current macrodynamics we’re seeing around power demand, mobile power, and the access to power across sectors like construction, critical infrastructure, telecom, events, and off-grid projects, what you mentioned has always been a choke point. And traditional mobile generators have been the solution. 

But they also come with their own set of challenges, especially in situations where power needs are variable and volatile, which is the case across many of these sectors. And it’s also interestingly, in our opinion, a value chain where economic solutions like what ANA has could truly be scaled across the value chain and deliver benefits to everyone, from the customers building the projects to the rental companies renting the equipment to even the OEMs who could benefit from product innovation.

And that’s really where we were excited about ANA, because we had felt they had a truly fit for purpose solution to unlock value in terms of power delivery through a product innovation that was really actually fit for purpose.

Tonya Bakritzes: Nice. Yeah, and I think just looking at the landscape of other investments, most of the private venture and growth capital in the space went to replacing the generator entirely. ANA took a different tact and kept the diesel engine, but added a battery. Why did that feel like the right call for them?

Gokul Raghavan: Yeah, so it’s a great question. We saw a lot of capital going into sort of replacing the engine with new technology, as you mentioned. And while that definitely has merit, in a lot of ways, traditional engine architecture today is already quite efficient and it’s purpose built for its use cases. The issue, in our opinion, and I think in ANA’s opinion, was more so around optimizing these gen sets to meet the variable demands on their capacity.

And this is where we felt like the majority of value was going to be unlocked. And ANA sort of saw that from the beginning on the ground and knew how to create an innovation that would introduce a step change to the productivity of these generators and power assets through a hybridized integrated technology, as you mentioned. And they’ve done that and executed against that with what we believe is a drop-in solution for the market.

And so we’re not trying to change the paradigm of how power is supplied to a construction site or a telecom tower. What we’re doing though is introducing sort of true innovation on the power delivery side in a way that the end market can absorb very easily, which we sort of felt was the right call, as you mentioned, in terms of creating true innovation in the space.

Tonya Bakritzes: Yeah. We’re all hearing in the headlines a lot about power, how the demand for power is only going up. Where do you see the industry in three years and how does ANA exist in that landscape?

Gokul Raghavan: Totally. So we’re definitely seeing in the headlines as everyone sees, all the growth in power demand across data centers and AI CapEx. I would say though, even stepping beyond that, we’re seeing that across sectors. So everything from electrification of commercial and residential to the reshoring of manufacturing in the US to new energy and energy infrastructure being built out, all of this is driving additional power.

And importantly, it’s driving power demand at the point of consumption in situations that are oftentimes dealing with the grid bottleneck and existing infrastructure that’s already being tested at its limit. And so we sort of view ANA as sitting squarely in that world because they’ve built a portfolio of power solutions that sort of meet the needs of the customers where they’re at and meet the needs of the projects where the bottlenecks are at. And I think that the portfolio of solutions is going to continue to drive value across these sectors in the next three, four or five years as we see power demand continue to increase.

Tonya Bakritzes: Amazing. Thank you so much, Gokul, for the insights. And now we’ll turn it over to our friends at Energy Empire.

Jamie Nolan: Alicia, welcome to the pod. We’re so excited to have you.

Alicia Waineo:Thanks for having me.

Jamie Nolan: So you started your career as a registered nurse. I actually have a friend who started her career as a registered nurse and ended up in a vastly different career path, and I think it’s always so interesting when people do that. Today, you’re co-founder and chief financial officer of ANA, a mobile generator company doing roughly $400 million a year in sales. Nobody draws lines like this on a career map, so take us back. What was your journey like? How does a nurse end up in mobile power?

Alicia Waineo: I didn’t have a master plan for making sure I got to mobile power from nursing. I became a registered nurse at 19, which is pretty young, and I just struggled to find my passion in nursing. But I found that I was really drawn to the back office and understanding how the organization worked. So I ended up moving into healthcare as an administrator, and I ran a home healthcare company and eventually ended up selling it. That whole process taught me I really love building things. And what’s always stayed with me from nursing, which is a great launching pad for people, is that acute triage where you’ve got a situation in front of you and you don’t have perfect information, but you need to just act and take a decision in that moment. That’s been really helpful for us as we’ve built ANA.

Jigar Shah: At what point in that journey did you realize that entrepreneurship was cool for you, and that you had the risk tolerance to do that?

Alicia Waineo: Before starting ANA, it was with the private investment office. I had worked on two startups, and I thought that was the coolest thing and the best way to spend my energy, like what I was built for. Unfortunately, I didn’t have any equity in either of those two startups, and so I learned it’s great to have equity in startups when you put all that energy into it. So then starting ANA, I was just ready for it, and Mike and Kevin were, too.

Jigar Shah: So then the Japanese generator company, Airman, helps you guys and says, hey, we really want you to start this distributorship. But distribution businesses are usually sleepy, low margin, unloved. What did you see in 2017 that made you bet everything on this one?

Alicia Waineo: We didn’t set out to build a big company. We thought we could build a better company, a great place for people to work, and be relentless about serving our customers. With the previous distributorship, the Airman brand had been damaged in the market, and we thought we could help build that trust back. It was a labor of love coming together. I created the chart of accounts in QuickBooks on my kitchen table, and I was the AR team, the IT guy, the finance team, plant management, in charge of operations. I was marketing, I was HR. I was all the things until we could afford to start hiring on other folks. And I just really loved it, and that’s how we ended up here.

Jamie Nolan: It sounds really fun. Jigar and I have this new thing, Energy Empire, don’t know if you’ve heard of it. And so I’m very much where you are, where I’m learning how to do all these new things and wearing all these different hats. It’s related to how my career has progressed. It’s a little bit more of a straight line than for you, coming from nursing, but it’s still, I don’t know how to do that, but I’m going to figure it out. You either find that really compelling and scary in a fun way, or you don’t. So I love hearing that, because I’m just living that right now. I feel it.

Alicia Waineo: Yeah, that’s exactly it.

Jamie Nolan: What pieces do you think you take from nursing forward, on a day-to-day basis, in what you’re doing today?

Alicia Waineo: I think the main thing is that acute triage: you’ve got a situation in front of you that you have to react to. There’s no time to get perfect information, and so you have to take the risk and make a decision in that moment. That, and the human side of building a company. You can have the best processes in the world and not consider the human side of it or the culture side of it, and maybe you don’t have the kind of company that we’ve been lucky enough to build. We’ve focused a lot on our culture building at ANA, and I think I carried that forward, that empathetic view from nursing.

Jamie Nolan: I love that, and I’m sure the company is stronger because you have those qualities. I just really love these stories that people have, and sometimes your career takes you in an unexpected direction, and that’s the most interesting thing about a person’s personal journey. So let’s get into the technology and talk more about mobile generators, and why temporary power is everywhere but nobody necessarily sees it or is aware that it’s there. Mobile generators might be one of the least glamorous corners of the energy industry, but one of the most essential. Every construction site, concert, film set, and hurricane recovery runs on them. For people who’ve never thought about this market for one second: who are your customers, and what would stop working tomorrow if mobile power disappeared?

Alicia Waineo: Most people interact with our products every day, but they just don’t really realize it. If you’re at a concert, if you’re at the Stanley Cup Final, if you’re on a construction site, a data center construction site, a road project, there are so many areas that are operating on temporary power, and you just don’t see it. Our customers are equipment rental companies that rent these generators out to the end users, and there are thousands of end users that rely on that rental equipment every day to make sure their costs are fixed on their project.

Jigar Shah: You talked about Kevin’s role in relationship management, but take us through that in more detail. You’re selling to big national equipment rental companies, and they provide their products to every job site in America. When those buyers pick a generator, what actually wins the deal? Is it price, uptime, fuel costs? And has that answer changed over the last five years?

Alicia Waineo: I think it’s different for the different companies. For some, price is the most important. But five years ago, availability was the most important thing. Rental companies don’t need a generator next month. They’ve got a job and they need it tomorrow. Kevin’s main push when we got started was, we’re going to pick up the phone, we’re going to have availability, we’re going to make sure that we deliver within 24 hours. And that was part of the key to our success. Now what we’re finding is customers care more about reliability and total cost of ownership. I’m sure they cared about that five years ago, but we’re experiencing it more now. And as you’re seeing this shift from traditional diesel generators only to hybrid, part of that is that reliability.

Jigar Shah: That’s amazing. I’m curious, though. When we talk about how long it takes to get connected to the grid, data centers and factories are all the rage, and they’re talking about how they have to wait years to get a utility hookup. Are you now selling to customers who simply can’t wait for the grid, who just want temporary power quietly as bridge power?

Alicia Waineo: 100%. And I think they want it loudly as bridge power. It’s become mainstream, at least in what we’re experiencing. Projects just can’t wait for the grid, and so if you can get temporary power on site right away, then you do that.

Jamie Nolan: All right, so this is where it gets really exciting. I love what your technology does and what differentiates it. In 2022, you launched EBOSS, or Energy Boss, ANA’s mobile generator. How do you explain this product to folks who know nothing about generators or about mobile power? What does it do, and how is it different from other products on the market?

Alicia Waineo: It’s batteries and inverters that attach to a generator or any power source. But what makes us different from a BESS, a battery energy storage system, is that we separate the load from the generator. 100% of the load is pulled from the battery, and the generator is just an automatic charger that charges the battery when it starts getting low. That enables so many different benefits. For one, the inverters provide a very pure quality of power that’s needed in a lot of different applications. But it also allows us to have a smaller battery size, a smaller footprint, which is important on jobs that have a tight footprint or that have weight restrictions for their logistics. There are lots of benefits to having the load separated from the generator.

Jigar Shah: That sounds like a series hybrid, right? I remember when the Chevy Volt came out, and they were like, well, the wheels are running off the battery, and there’s a gasoline engine in the back that’s charging the battery, and eventually that gasoline engine could be replaced with a fuel cell or something else. Ultimately it’s just recharging the battery. That’s super interesting to me. One of the things I find really interesting, though, is that people don’t really know the numbers. When you think about what a backup generator costs, after setup and teardown and just running it at half loading, it sounds like it could easily be a dollar a kilowatt-hour or more. So you’re saving people a ton of money by going EBOSS, isn’t that right?

Alicia Waineo: Yeah, it saves up to 80% of the fuel cost. The way rental companies work is they’ll calculate how much rent to charge by the initial cost of the equipment. So the way EBOSS works is they go to the end user and say, hey, we can provide you this EBOSS, which provides all these benefits, reduction in emissions, reduction in noise, and you get the hybrid, and we’re going to charge you the same amount of rent plus fuel that you would have paid anyway for a traditional generator. And then the companies that sell fuel just convert all of that fuel cost that they were passing through to their customer into their profitable rent dollars.

Jigar Shah: Yeah, but it does feel like it confuses people. I’ve talked to a lot of the folks at Netflix and others who basically say, we like to go 100% green, we have green riders in our movie set contracts. And it does feel like cutting diesel by 80% is better than trying to cut it by 100%, that this solution actually meets the needs of the customers and works better through the rental companies than a 100% battery solution, where would you take it to recharge, et cetera.

Alicia Waineo: Right. The way we look at it is there’s a huge installed base of traditional diesel generators. I recently heard 160,000 mobile generators in the US alone in rental fleets, and that’s not counting anywhere else in the world. Those installed generators work very well in some cases: when they’re fully loaded, they work very efficiently. And if you can make them efficient all of the time, that’s just such a huge economic and environmental win.

Jigar Shah: Oh, I totally agree.

Jamie Nolan: Absolutely. The idea almost sounds too simple. It’s very obvious: pair a battery with a diesel generator so the engine only runs when it actually needs to, and as you mentioned, cut the fuel use up to 80%. But this isn’t necessarily based on new technology. Generators have been around for a century. So why did it take until 2022 for someone to figure out how to do this?

Alicia Waineo: We have an interesting story on that. I’ll say first off, it’s not new. Europe started doing this a long time ago, maybe 2015, 2016. In 2018, we became the distributor for a European BESS that became kind of the model that a lot of the other BESS companies modeled their units after. And what we learned in that process, first of all a tremendous amount of things related to electrical power and batteries, was that it’s not enough to solve the technical problem. You have to solve it with the needs of the customer in mind so that the customer will be successful with it. Ultimately, that company was sold to one of our competitors, and so we were in a position where we could take the knowledge that we had and start from the ground up, design a product that was fit for purpose, utilizing all of the deep knowledge we have dealing with the rental industry and the problems that they experience. Rental equipment gets abused. It’s in freezing cold temperatures. It’s in burning hot temperatures. Sometimes it’s maintained on time, if people can get to it. It’s not treated as well as it would be by someone who owns the equipment, and so it needs to be a really robust solution. We worked really hard on coming up with that. We started in 2019 with the design, and then we were finally ready to commercialize it in 2022.

Jigar Shah: You know, both Jamie and I worked at the Loan Programs Office. We were involved in financing battery manufacturing facilities. So many of us had heard of regular lithium-ion batteries, which are sort of NMC batteries, nickel manganese cobalt, for high power and high vehicle range in electric vehicles. Then many of us heard of LFP batteries, lithium iron phosphate, for utility-scale batteries and the ones people put in their homes. But you went a completely different direction. You guys went to LTO batteries, lithium titanium oxide cells from Toshiba. That chemistry charges in minutes, survives extreme heat and cold, and lasts tens of thousands of cycles. And now you guys are, I think, buying 10% of the world’s lithium titanate supply. Why that chemistry, when everybody else is buying LFP for stationary storage?

Alicia Waineo: We went looking for a chemistry that would be robust. Like I mentioned, the conditions in the rental world are very tough. We needed something that would operate in the widest temperature range, that could take a charge very quickly and discharge very quickly, and that we could use with our patented three-inverter system. The high cycle life of LTO makes it possible for us to just cycle and cycle and cycle the battery without it needing to be replaced regularly. And that’s where we’re separating the load from the generator: through the three-inverter system, you need to cycle the battery as often as it needs to be recharged. And we use a smaller battery for a smaller footprint. That’s why we went with LTO.

Jigar Shah: So I’m curious. You guys went from $11 million of revenue in 2022 to roughly $400 million today, on track for $50 million of EBITDA, which is earnings before interest, taxes, depreciation, and amortization. And you did it on $700,000 of founder money, plus exactly one outside check from our friends at S2G for $50 million. Most companies with that kind of growth raise five rounds and give away half the business. How did you guys think about your capitalization strategy in avoiding VC money?

Alicia Waineo: I think the three of us founders were very aligned from the beginning that we weren’t looking to build a company to flip. We were looking to build a durable company. The three of us put our nickels together, and Airman was really supportive with inventory initially. And I’ll just correct the 2022 number. By 2022, we had built a successful and profitable distribution business, and we were doing north of $100 million in 2022 in the distribution business, nothing in the hybrid energy business. With that foundation, we were able to launch EBOSS. That’s not something a lot of new product companies get to start from, that really secure base: we already had a channel to market, we already had customers, we had already built trust in our brand, and so we were able to launch. And then we saw what was coming as far as the growth and the reception of our product, and we knew we needed to bring on a partner.

Jamie Nolan: But still, you all waited eight years to take your first institutional investment, even despite all of that growth. So the money must have been knocking at your door all along the way. What types of things did you say no to along the way, and what made you finally say yes to S2G?

Alicia Waineo: So we didn’t really say no, we just weren’t looking. We were heads down trying to build the distribution business, and as I said, Airman was really supportive with inventory. We were very disciplined with working capital management, we used a little bit of asset-based lending for working capital, and we reinvested all the profits back into growing the business. We just continued to cash flow our way into growth, and our customer demand is really what funded our growth. So when EBOSS took off in 2022, we looked ahead and we said, this is a tremendous opportunity in front of us, and looked at our balance sheet and realized we were severely undercapitalized. I think at the time we had a $60 million balance sheet supported by $4 million or less of equity. And so we said, now we need to bring on a partner, and we launched a process. What drew us to S2G really was alignment. They looked at us and understood the distribution side of the business. They understood EBOSS. They saw the benefits it would bring as far as fuel reductions and emission reductions, believed in our vision, and didn’t ask us to change who we were to take on their partnership.

Jamie Nolan: So next I want to talk about what’s next for the company, because I know that you’ve had some news recently and some more upcoming news. I understand you just signed a distribution agreement to take EBOSS into Europe, where of course diesel is a lot more expensive and emission rules on job sites are much tighter than they are here in the United States. Why Europe? What’s the interest been like there?

Alicia Waineo: Yeah, you said it. The fuel costs more, and emission restrictions are much higher than in the US, so it becomes a really natural market for us. We’ve had great reception so far. What makes me really confident that EBOSS is a great product there is not necessarily anything to do with that specific market. It’s the architecture that separates the load from the generator and all of the benefits that that brings. A lot of the products available in Europe right now are battery packs that bolt onto a generator, and they have pass-through power with the generator. It’s essentially peak shaving. Ours is just a totally different architecture. The battery does all the work, and the engine’s just the charger.

Jigar Shah: Yeah, and the way that works is basically, if you have a hybrid vehicle where both the engine and the battery are running the wheels, that’s what the Europeans have now. What you guys are doing is running the wheels off the battery, and then running the engine at its most fuel-efficient point to recharge the batteries, so it uses the least amount of fuel possible. It’s so smart. Now describe for me FlexBoost, because that feels different than the EBOSS solution. How is it different, and how does it change the trajectory of the company?

Alicia Waineo: We’re really excited about FlexBoost, which we just announced recently. It’s our continued work at trying to solve the problem of variable loads in generator fleets. EBOSS is a modular, scalable, stackable system where you can build big power systems. For example, we have paralleled, I think, 60 units together to make a four-megawatt system, and that’s being charged by two one-megawatt generators. So you can make it bigger, you can make it smaller. Really scalable. FlexBoost is an all-in-one machine with a generator. It’s an engine and alternator, and then you drop in the middle some automotive hybrid technology that allows it to have very similar benefits to EBOSS, but it becomes a one-to-one generator replacement on those applications where you just have the one generator. You don’t need to build a big power system.

Jigar Shah: And how did you guys get there? Was there an external party you worked with to design the system? Is there a supply chain that was offering this service? How did you make the leap to FlexBoost?

Alicia Waineo: FlexBoost was purely internal. We have some really smart folks that just kept thinking beyond what we’ve done with EBOSS. How could we continue to push the limit? How could we continue our journey to zero and continue to flip this big installed base that we have? How do we improve what’s already there? And that’s how that resulted.

Jigar Shah: Last question from me. Given how many awesome events use temporary power, what is the best event that you got free tickets to because of your relationship with the generator companies?

Alicia Waineo: You know, I should use that more. We powered the Super Bowl here in Las Vegas, but we did not get free tickets.

Jigar Shah: We’re going to have to fix that. I think our friends at Mortenson Construction built that facility, the Raiders stadium in Las Vegas. We’re all going to have to get in on the free tickets. That seems like the summary of this conversation.

Jamie Nolan: That’s a heck of a perk.

Alicia Waineo: I like this. Yeah, we need to talk more. This is a good idea.

Jigar Shah: Well, with that, it is just so extraordinary to me. In this world of climate conversations, people are obsessed with talking about climate. And in your solution, I think you’re just talking about providing better customer service to customers. It’s just a better product: better reliability, maintenance, fuel savings, and then it happens to save emissions. And as a result, the product has just taken off. It feels to me like this is the future of quote-unquote climate: just better products and better customer service.

Alicia Waineo: Yeah, I think the energy transition is scalable when the economics work for the customer, and that’s what we built our business around.

Jigar Shah: Well, thank you so much for spending time with us. It’s just an incredible story. And if needed, you can provide CPR.

Alicia Waineo: Thank you so much. Really appreciate talking with you guys.

Tonya: Thank you for tuning into the S2G podcast. If you enjoyed this episode, please subscribe, leave us a review, or share it with a friend. For more information or to connect with us, check out s2gin​vest​ments​.com.

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