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Energy storage startup with government-sponsored funding goes public

October 21, 2021
By: Ashwin Shenoy

ESS Inc., a company that closed a deal to go public earlier this month, was able to leverage public capital at its early stages to accelerate its success as a startup. Founded in 2011, the Wilsonville, Oregon, based company manufactures batteries for long-duration energy storage applications. In 2012, ESS Inc. received a Phase I Small Business Innovation Research (SBIR) award from ARPA-E, and additional grant support from the Oregon Nanoscience and Microtechnologies Institute (ONAMI), an SSTI member. ONAMI is an Oregon-based non-profit that provides grants, equity funding and business development guidance to startups engaged in research-based scientific innovation. It receives funding from Business Oregon, also an SSTI member.

Robert “Skip” Rung, the president and executive director of ONAMI, told SSTI that the non-profit is “…proud to have made a commercialization gap grant to ESS [Inc.] in 2012 — along with ARPA-E, the first outside funding received by the company.” ONAMI subsequently invested in two rounds and was able to fund two graduate student interns that later went on to become key employees of the company. “All that said, Craig Evans and Julia Song [the co-founders] have proven what most investors know — there is no substitute for outstanding and courageous founders,” says Rung.

An agency under the U.S. Department of Energy, ARPA-E is tasked with promoting and funding R&D initiatives in advanced energy technologies. In 2013, ESS Inc. received a Phase II  SBIR award from ARPA-E, and additional grant support from both ONAMI and VertueLab, an SSTI member, which also has received funding from Business Oregon. VertueLab is a non-profit that provides funding and support to entrepreneurs engaged in climate technology across North America.

ESS would go on to receive another SBIR Phase II award from ARPA-E in 2015, and a Phase I award in 2020 from the U.S. Air Force.

In a 2016 round of funding, ESS Inc. received a $50,000 equity investment from VertueLab, bringing the company to $8.14 million in funding.

Ken Vaughn, director of Impact Investments at VertueLab, told SSTI that the non-profit “…provided catalytic funding to ESS [Inc.] originally to help the company leverage a $2.1 [million] grant from ARPA-E to scale up its innovative flow battery technology and make a bridge investment to support further scale up.” VertueLab views ESS. Inc as an innovative enabler of the adoption of renewable technology.

ESS Inc. went on to complete four more rounds of funding, before becoming public through a reverse merger with ACON S2 Acquisition Corp. The combined entity, known as ESS Tech, Inc., began trading on the New York Stock Exchange under the ticker symbol GWH on Oct. 11.

With the help of non-profits and the federal government, ESS Inc. was able to utilize grant and private equity funding in its early history to develop an innovative solution to further sustainability and clean technology. More information on ESS Inc. can be accessed here.

Oregonstartups, energy, venture dev orgs, state tbed, sbir