Batteries Included Fund Investment Thesis, 2026
Adventures in the machine swap economics of electrification
Our latest investment in Every Electric makes an even 10 for Batteries Included Fund! To celebrate, Pranati, Logan and I decided to update our investment thesis.
Here’s what we came up with….
We help curious companies put relocatable batteries in the right place at the right time.
help = early stage checks ($25-$100K) + follow-on funding for top 10%
right place = next to solar + next to/inside electric machines
right time = when a battery makes economic sense for people nearby
relocatable = capable of creating value in more than one place
I like Sankey flow diagrams: left = how we generate primary energy; middle = how we move & process it; right = how it serves humans day to day.
I love Saul Griffith’s Sankey machine sketches. The MacArthur genius brings the Sankey to life as a network of ~1 billion, mostly petroleum-fueled, machines.
Most energy transition talk is fuel-first; Griffith is machines-first. His energy transition is about swapping gas machines for electric ones, when the math behind swapping makes sense. Two variables matter most in what we call machine swap economics:
where that electric machine plugs in, and
when adding a battery helps people nearby the most.
Let’s start with where.
Right place = next to solar + next to/inside electric machines
Batteries are going in all over the grid. Right now, two spots interest us:
Next to solar
Solar + storage is the OG batteries included move; batteries placed here solve solar’s biggest weakness, daily intermittency. But that’s not all, batteries placed here do so much for grids folks call it value stacking. (More on this later.)
Our first portfolio company, B2U Storage Solutions puts batteries next to solar. A former solar developer, B2U’s Freeman Hall found a very creative, affordable source for his batteries — used electric cars.
Next to/Inside machines
We’re helping companies put batteries next to/inside electric machines, too.
Next to electric machines: Every Electric puts batteries next to window units in New York City. This provides immediate value to the power utility, ComEd, who pays Every Electric and the renter (they split the $) to run AC off that battery until things settle down elsewhere on the grid.
Inside machines: Copper sells an induction stove with a battery inside. It’s cheaper and faster to install than one without a battery, and it lets you cook when the power’s out.
The founders of these three companies were curious enough about energy use in a specific spot on the energy landscape to get where right.
Understanding the value stacks within which their batteries were included helped them get when right, too.
Right time = when a battery makes economic sense for people nearby
The economic optionality of batteries comes from their profound lack of giving a crap; they just don’t care where the electrons they store come from, nor what you do with them when they leave.
Depending on where it gets plugged in, a battery does different jobs for the people nearby.
The Grid Value Stack
B2U’s Freeman Hall knew the yellow layer of the grid stack on the left very well; he’d ridden the duck curve coaster for years. He’d watched the math on adding batteries to California solar and made his move when he found batteries cheap enough to make that layer’s math work.
Freeman knew where and when to start on the grid stack.
The Home Value Stack
Copper’s Sam Calisch timed the blue layer of the home stack perfectly. He’d been experimenting with induction stoves and knew that cooking with 1/2 battery power + 1/2 wall power avoided an expensive 240V wiring upgrade.
Sam knew where and when to start on the home stack.
As investors, it’s our job to find founders curious enough to build companies putting batteries in the right place at the right time. That used to be enough for us to get serious.
Not anymore.
Now we’re looking for one more thing.
Relocatable = capable of creating value in more than one value stack
Stationary batteries put all their eggs in one value stack basket. Portable, EV and mobile batteries are too unpredictable for other participants in a particular value stack to rely on. What if there was a battery inclusion strategy that was juuuusssst right?
Semi-permanent enough for other people in the same stack to rely on
Flexible enough to make a few strategic moves over it’s lifetime
Our curiosity about the economics of relocation is informed by two patterns emerging in our portfolio:
1 big, lateral relocation across different stacks
B2U‘s business model centers on one big, lateral relocation for EV battery packs from the electric vehicle value stack (not pictured above) to the grid value stack. After a first career dumping electrons into EV motors, then gulping them down at high-speed chargers, B2U’s used EV packs live a very charmed, semi-retired kind of second life, sipping solar in the daytime and discharging it slower than they did in EVs when the grid needs help.
3-5 relocations across similar stacks
Copper and Every Electric’s business models have relocation on their mind, too. Their batteries might make 3, 4, 5 moves, travelling with their humans from apartment to apartment, maybe to a new house. Perhaps this is random, a function of the home dweller. Perhaps it’s more strategic, with Copper and Every Electric steering the batteries to spots where a new value stack might need a battery more than where that renter is headed.
What if relocatable batteries have more value creation potential than stationary or portable batteries? Our new thesis gives us a chance to ask, and hopefully answer, this exciting new question. I can’t wait to see what we find out. Speaking of which, here’s what you get to find out the next two weeks:
Logan Pilaro’s take on how we might deploy this thesis in Latin America
Pranati Patnam’s version 1.0 of a model for lifetime battery value creation
A new thesis for a new day. Thank you!
There you have it, the latest, and definitely not last, edit on our thesis.
To the poets:
We write small checks early
to founders so good at machine swap econ
they find the right place to put a battery upon.We dig putting batteries in more than one spot
before the electrons flowing through them stop.
To the mathletes:
To our faithful substack readers: Thank you. Please let us know if you have edits, ideas, intros that may help us explore and experiment with this new take. We need all the help we can get.
To Pranati Patnam and Logan Pilaro: Thank you. In just a few weeks you’ve made the fund, and me, much better.
Onward, together.
— Matt Candler, GP, Batteries Included Fund