A16z Crypto leads $9 million Series A round for DePIN project Daylight

Daylight, a decentralized physical infrastructure network (DePIN) project focused on energy distribution, has raised $9 million in a Series A funding round led by A16z Crypto.

Other investors in the round included Framework Ventures, Lattice Fund, Escape Velocity and Lerer Hippeau, Daylight said Wednesday. The startup began and closed the fundraising process in 10 days in April, co-founder and CEO Jason Badeaux told The Block. He declined to comment on the structure of the round, valuation or whether any of the investors have taken a board seat, either advisory or directorial.

The Series A round brings Daylight's total funding to $13 million, having previously raised $4 million in seed funding in the summer of 2022, Badeaux said.

What is Daylight?

Daylight was founded in 2022 by Badeaux, Udit Patel and Evan Caron, all of whom have backgrounds in the energy industry.

"It was clear to us in 2022 that electricity demand was set to explode from compute growth, electrification and reshoring of industrial capacity, and that the historical model of grid expansion would be the constraint to serving this demand," Badeaux told The Block. "Building transmission infrastructure is nearly impossible, so we need to find new ways to optimize energy growth — and distributed energy is critical to that."

Daylight is building a decentralized protocol that lets users connect their energy devices, such as thermostats, batteries, electric vehicles and solar inverters, to its app and earn rewards. Users can also join the Daylight marketplace to access energy upgrades for their home or building, such as solar panels, electric vehicle chargers, heat pumps and hot water heaters. The marketplace is currently active in New York, New Jersey and Pennsylvania, with support for Texas and California coming soon, Daylight said.

As for how Daylight works specifically, Badeaux said the protocol pools together capacity from the flexibility of connected devices and makes that available to energy companies.

"Additionally, the protocol's proprietary energy data can be used to build novel applications; for example, voltage monitoring to reduce electrical fire risk for property insurance," he said.

Daylight offers rewards in the form of points, which can be redeemed in the app. When asked if those points will be converted into Daylight's own token in the future, Badeaux declined to comment.

As for Daylight's business model, Badeaux said the protocol will sell energy data and energy capacity to end customers, both inside and outside the energy industry.

"Energy is a collection of highly regulated monopolies in the U.S. today, and one we believe is ripe for disruption," a16z partners Guy Wuollet and Ali Yahya, wrote in a separate blog post shared with The Block. "Daylight is building a decentralized protocol that will allow developers to program the energy grid through distributed energy resources."

Daylight building on Base

Daylight is building its protocol on the Coinbase-incubated Ethereum Layer 2 network Base, Badeaux said. The protocol launched today in testnet. Badeaux declined to comment on the mainnet launch schedule.

"Just like renewable energy credits or energy efficiency credits, the Daylight Protocol will incentivize users for providing energy capacity to its open-source network," Badeaux said. "The protocol will build an economy around its energy capacity and data, allowing energy companies and developers to interact with the infrastructure."

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