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Google Nest Renew and OhmConnect merge into 'Renew Home' with a $100M boost from SIP

Image Credits: Bryce Durbin / TechCrunch

Another development occurred today in Google's long-term strategy to streamline some of its less-core business operations. Google Nest Renew -- a load shifting service for Google Nest thermostat owners to get them to consume energy at off-peak times when energy is less expensive, or when "cleaner" grid options are available -- is spinning out from Google and combining with OhmConnect, a startup that Sidewalk Infrastructure Partners invests in that helps manage load shifting services for Nest and other smart thermostat brands. The new company will be called "Renew Home."

As part of the deal, SIP will be kicking in $100 million into the new entity, and it will become a majority owner. Google is not investing at this time and is staying on as a minority shareholder. There is no valuation being disclosed, a spokesperson said. OhmConnect is currently active in California, Texas and New York, and the new company, Renew Home, plans to expand into new markets once launched, the spokesperson added.

The deal is bringing together partners and entities that have been investing and working together, for some time already. Although the companies will argue that this merger is a signal of how they are doubling down on the opportunity, it also underscores how Google, SIP and the ecosystem created around them have yet to figure out solid, longer-term business models in the clean energy industry.

Although there have been tens of millions of Nest thermostats sold over the years, Google does not disclose how many of them use the Renew service -- which works on devices from the third generation (2015) and up. OhmConnect is one of its partners and it has 225,000 customers in total on its platform (which includes Nest but other customers, too).

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“We’re incredibly excited about this transaction. Renew Home will optimize the way households across the country consume energy and interact with the electrical grid, strategically aligning their energy consumption to reduce their energy bills while reducing pressure on the grid, particularly during moments of peak stress and times when clean energy is less readily available (for instance, in the evening, when solar energy is coming offline)," said Jonathan Winer, co-founder and co-CEO of Sidewalk Infrastructure Partners, in a statement provided to TechCrunch. "This is critical: by mitigating the intermittency of renewable energy, Renew Home — and the broader virtual power plant (VPP) industry — will be instrumental in allowing us to bring more renewable energy onto the grid."

This spinout is far from Google's first (or likely last) effort to streamline its operations and bring its focus back into profit centers rather than loss leaders, which has seen not just thousands of job cuts at the company, but further scrutiny especially of some of its other bets. More specifically, today's news appears to be part of a bigger effort to refocus its Nest business in particular. Earlier this year, the company said it would be discontinuing a number of Google Nest products and services, including Dropcam and its home security system, in April 2024.

The combination of Google Nest Renew and OhmConnect is just the latest spinout in a very long line of them. In fact, the spinouts in this story might be enough to make you dizzy. Sidewalk Infrastructure Partners itself was once a part of Sidewalk Labs. Sidewalk Labs got its start originally as a Google moonshot in 2015 with the lofty goal of using tech to improve urban life. SIP was eventually spun out of Sidewalk Labs in 2020 fueled with a $400 million investment from Google.

Sidewalk Labs then was designated as an Alphabet company, before in 2021 getting folded into Google itself, downsizing and spinning out one piece (Canopy), effectively shutting down Sidewalk Labs as a separate entity.

Meanwhile, SIP invested $20 million in OhmConnect in 2020 and continued to be a minority shareholder in it. Nest Renew has been one of OhmConnect's customers, alongside Sensi, ecobee, Carrier and others. It also works with hot water heater manufacturers, appliance manufacturers and solar and battery storage manufacturers, it said.

The deal has some scale to it. OhmConnect says that it currently has over 225,000 customers across the different thermostat brands and others that it works with. While there millions of Nest thermostats being used in the U.S. and further afield, these are not necessarily being used in conjunction with Nest Renew.

Now Renew Home will be working to bring on more, but there is already competition for that piece of business. For consumers who want to partake in load shifting, there are a number of other players in the market, including electricity companies themselves offering these services directly, too. In the U.K. for example, the National Grid also offers load shifting.

No surprise, then, that part of the strategy will be to expand what it is that Renew Home will be doing.

Future plans, the company said, will focus on "whole-home energy management," which includes EV charging, solar systems and more. That will include, it said, working on further hardware partnerships, too, as well as developing more nuanced energy management software to work with that hardware and for customers to use to have been control over how, where and when they consume power.

The company has set a target of accounting for 30GW of shiftable load and working in 10 million homes by 2030.

Updated to clarify that the number of Google Nest Renew customers has not been disclosed, and that OhmConnect was not a spinout of SIP, but an investment.