ThermoLift lands $2.75M from Topspin, Angels

ThermoLift CEO Paul Schwartz: Not just investors, but strategic partners.

By GREGORY ZELLER // Stony Brook energy firm ThermoLift has gotten a big VC lift.

The company, a resident of the Advanced Energy Research and Technology Center at Stony Brook University, announced today that it has closed on a $2.75 million VC round that includes funding from the Topspin Fund, the venture fund of Topspin Partners, and the Long Island Angel Network.

The funding will allow ThermoLift – which is looking to redefine the energy world with an affordable natural gas-powered heat and cooling unit that makes clean energy universally available – to complete development of a second-generation device and “get it out in the field,” according to CEO Paul Schwartz.

The $2.75 million round, which closed last week, includes a series of previously unannounced bridge loans Topspin Partners has made to ThermoLift since the end of 2014, Schwartz noted. When Topspin started making those loans, there was no official determination on the valuation of this equity round; the determination on how much ThermoLift would actually raise in this round wasn’t made until April.

“Because of our close relationship with Topspin and their confidence in the company, they lent us money,” Schwartz noted. “That money helped us complete our testing cycle and make various engineering improvements.”

After the April determination, ThermoLift went to the Long Island Angel Network, one of the company’s original investors, along with Topspin Partners. The LIAN added an unspecified investment that brought the total to ThermoLift’s $2.75 million target.

Schwartz wouldn’t break down the amounts invested individually by Topspin Partners or the Angels, noting only that “Topspin was the main investor here.”

However it breaks down, the $2.75 million marks the latest in a string of grants and investments that have propelled the company forward. Founded in 2012 by Schwartz and German scientist Peter Hofbauer, Volkswagen’s former head of engine and power-train development, ThermoLift was launched with a $75,000 seed investment by private investors including former KeySpan CEO, non-executive National Grid Chairman and New York State Energy and Research Development Authority Director Robert Catell, who now chairs the AERTC.

That was followed by a total of $1.6 million in investments by Topspin Partners and the LIAN and a $750,000 research grant by the U.S. Department of Energy. ThermoLift also received a $482,000 grant from NYSERDA, and is currently negotiating the parameters of a $100,000 follow-on grant with the research and development authority, Schwartz noted.

For now, ThermoLift is thrilled to have closed on the $2.75 million, which should get that phase-two tech up and running by the end of the year, according to the CEO.

“This gives us the ability to take the lessons learned from our demonstrator machine and build our generation-two machine,” Schwartz said. “This capital will get us through the building and testing of our generation-two device.”

Steve Winick, venture-side partner at Roslyn-based Topspin Partners, said both of his firm’s ThermoLift investments were made with an eye on the energy-consumption future.

“A natural gas air conditioner is highly attractive to many markets globally,” Winick said. “We believe ThermoLift is a transformational new approach in the HVAC market.”

Supporting forward-thinking energy firms like ThermoLift makes both economic and environmental sense, agreed Michael Faltischek, chairman of the Long Island Angel Network.

“We are pleased to be able to support the development of what will prove to be a disruptive technology in the field of heating and cooling,” Faltischek said.

Without the support of hands-on investors like Topspin Partners and the LIAN, Schwartz noted, ThermoLift wouldn’t have been able to get this far – or to look ahead to the brighter energy future it hopes to shepherd.

“In the small technology startup phase, you have to have a very close relationship with your investors,” the CEO said. “As soon as we secured Topspin and the [LIAN] as investors, I knew they’d be long-term players.

“That’s been the success of the relationship,” Schwartz added. “They’re not just investors. They’re strategic partners.”