With Cash From Generac & Others, Tank Utility Makes Fuel Tanks Smart
Over the past few years, a significant number of the meter devices that measure electricity, water, and natural gas usage have been connected to the Internet. Now, fuel tanks are getting smart, too.
Tank Utility is one of the companies that makes devices that remotely monitor the fuel level in propane and heating oil tanks, collecting and sharing that data with fuel distributors and their customers via cloud-based software and mobile apps. Boston-based Tank Utility, whose competitors include Wesroc, EnerTrac, and Silicon Controls, has raised new capital to go after opportunities in the sector.
Smart fuel tanks might not be as sexy as some other devices in the emerging “Internet of Things” sector, which has lofty aspirations to automate our homes, advance our factories, and transform virtually every aspect of our daily lives. But Tank Utility co-founder and CEO Amos Epstein still sees a significant business opportunity with a product that he says is already solving problems and delivering value to customers—skipping right past the hype stage in which some connected devices are mired.
“I think it’s easy for the average city-goer or someone who hasn’t had experience with this fuel type to say, ‘That’s a tiny dying market; why bother?’” Epstein says. “When in reality, the fuel spend in this market is huge. It’s well over $50 billion annually in the U.S.” And more importantly for Tank Utility, less than 1 percent of those fuel tanks are outfitted with remote monitoring systems, he says.
Now, the two-year-old startup will attempt to speed up the adoption of its products, with the help of another type of fuel injection. Tank Utility today announced a $2.2 million seed funding round led by Energy Foundry and Blue Fog Capital, with contributions from Generac Power Systems, Bolt, and several individual investors.
In addition to making the equity investment, Wisconsin-based Generac (NYSE: GNRC) says it plans to partner with Tank Utility to integrate the startup’s technology into the monitoring systems for its home backup power generators that run on liquid propane. “Tank Utility’s fuel level monitoring services are a perfect fit for our customers,” Generac CEO Aaron Jagdfeld says in a prepared statement. “With accurate visibility into exactly how much propane is left and the ability to notify fuel distributors before the generator runs out, we can be even more proactive in helping our customers make sure the lights stay on.”
Fuel distributors currently try to predict fuel use based on information such as prior consumption and weather patterns, but such methods are often unreliable, Epstein says.
By enabling distributors to accurately and remotely gauge in real time how much fuel is left in a tank, Tank Utility’s system can reduce the number of fuel deliveries by more than 40 percent, Epstein says. That translates to significant logistical cost savings and a healthier bottom line for distributors. “It’s a huge win for both them and their customers,” he adds.
The system should also help fuel distributors build better relationships with customers by improving the accuracy of fuel data and communication between the two parties, Epstein says. Tank Utility should “ultimately enable a higher level of confidence in that fuel provider and higher sentiment overall,” he says.
It’s hard to gauge how well that message is resonating with customers, as Epstein declines to share Tank Utility’s revenue figures. But since the company began selling its product late last year, it says it has signed up thousands of subscribers across 46 states and Canada.
The company employs 10 people in the Boston area and Chicago. It initially set up shop in the cleantech incubator Greentown Labs, located in Somerville, MA. The company still has a desk there, Epstein says, but most of its staff members now work at the downtown Boston offices of Bolt, a hardware-focused venture firm.