Just over a year after getting a $500 million capital injection from a Swiss private equity firm, Shelton-based energy efficiency company Budderfly has reported record customer, revenue and employment growth, according to company founder and CEO Al Subbloie. Subbloie said Budderfly has grown its portfolio of customer sites from about 2,750 to more than 5,000 […]
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Just over a year after getting a $500 million capital injection from a Swiss private equity firm, Shelton-based energy efficiency company Budderfly has reported record customer, revenue and employment growth, according to company founder and CEO Al Subbloie.
Subbloie said Budderfly has grown its portfolio of customer sites from about 2,750 to more than 5,000 businesses across the country since last July, when Switzerland-based Partners Group acquired a majority stake in the company.
Budderfly has also added more than 100 employees and surpassed $100 million in annual revenues, earning it a spot on Inc.’s 5,000 fastest-growing companies list for a third straight year.
“We’ve just been growing, and frankly exceeding my expectations, which is hard to do because I have high expectations,” Subbloie said. “We’ve probably more than doubled the company since doing the deal, and that’s at every level.”
‘Land and expand’
Subbloie, 63, credits Budderfly’s unique business model for its growth trajectory.
The company employs an “energy efficiency as a service” model, through which it assumes responsibility for its client’s utility spending and the capital risk of installing improvements to reduce energy consumption — and then shares in the savings.
The company upgrades and installs energy-efficient equipment — such as new HVAC systems, air quality controls, LED lighting, smart panels, sensors, and solar panels — for its customers at no upfront cost. It also provides around-the-clock AI-enabled energy monitoring and analysis, as well as ongoing maintenance and infrastructure improvements.
Budderfly signs 10-year contracts with customers and earns revenues through a share of energy cost savings.
The company has saved customers more than $25 million in energy costs since it began operations in 2007, Subbloie said.
“We drive about a 30% energy reduction out of the customer’s usage, and they end up with a much better operation than they had before, at a lot less money,” Subbloie said.
Budderfly primarily works with small to midsize businesses, such as quick-service restaurants, convenience stores and healthcare facilities.
It landed its first big customer, Subway, in 2017. Since that time, it has worked with the national sandwich brand to make a few thousand Subway stores more energy efficient. Overall, Budderfly has worked with more than 40 brands, including McDonald’s, IHOP, Burger King and Wendy’s, Subbloie said.
Franchises that operate similarly across different locations are the ideal customer base because the energy efficiency upgrades can be replicated across numerous storefronts, Subbloie said.
“A good 80% of our business comes out of what I call the restaurant, fast-food and dining arena — I didn’t anticipate that,” Subbloie said. “They all buy all the same equipment because they’re part of a brand.”
Subbloie calls it a “land-and-expand” strategy. The company strikes a deal with a brand to work on one or two stores. Then, after proving the achieved cost savings and efficiencies, Budderfly expands its contract with that brand to other franchisees, or even the corporation itself.
“What happens after you get through four or five of these franchises, the corporate brand itself swoops in and says ‘wow, can you do this at a larger scale,’” Subbloie said. “We’re right at the point where these deals are getting larger for us.”
Growth outlook
Subbloie said Budderfly is on track to generate more than $100 million in revenue in 2023, roughly double what it earned last year.
Employment has just about doubled, too. Since the acquisition, Subbloie said the company has hired about 125 people, with 70% of those positions based in Connecticut.
That growth comes on the heels of adding 834 customer sites to its portfolio in the first two quarters of 2023, with more expected before the end of the year.
Subbloie said he projects his company will double revenues again in 2024, to more than $200 million. Budderfly isn’t done raising capital, either. Subbloie said he expects to raise at least $200 million in new funding to support growth.
In a year, Subbloie said he expects the company to have more than 7,000 customer storefronts across the country.
“If you look at it like recurring revenue, the amount of new business we’ve brought in acts like a compounding wave,” Subbloie said.
