Winner Spotlight: How Seeder Is Helping China’s Buildings Go Green
Alex Shoer enjoys traveling. He’s already visited 50 countries—and noticed some universal challenges along the way. More than any other issue, the biggest problem around the world is misusing the environment, he says.
Pair that passion for the environment with an entrepreneurial spirit and the result is Seeder, the company that Shoer cofounded in Shanghai in 2011. Shoer’s pitch for Seeder—a marketplace that connects building managers with green contractors for retrofits—won the energy category of the Beijing Challenge Cup competition in January.
Following the Challenge Cup competition, we caught up with Shoer to find out how he ended up in China, how Seeder has been gaining traction, and how he plans to expand.
Tell me about Seeder.
Seeder is making it easier for buildings in China to get access to services and technology that help them save energy. We are solving the access problem and providing the knowledge necessary to make decisions. The problem I saw when I arrived in China is that there’s a huge amount of development and building and while there are mandates in terms of efficiency targets and sustainability, but there’s a knowledge and access gap between available solutions and qualified providers.
We came in as a matchmaker between building owners, operators, managers and the technologies and services needed to retrofit existing buildings. We have turned it into an online platform and our goal is to be the go-to intermediary that brings all the resources together.
Another issue we’re addressing is the lack of project financing. In the United States, financing for retrofits based on performance contracts is readily available–you only pay back what you save in energy costs. A third-party will invest in your building and make it more efficient, and you pay back with the savings. Seeder is implementing a simplified version of that structure, adapted for the Chinese market. When you reduce the upfront costs, then the conversations begin to move much more quickly.
You’re not from China, so how did you end up starting a company there?
I’ve always been intrigued by the environmental side of things because I travel quite a bit—I’ve been to 50 countries so far. The biggest problem I saw is always the environment … even poverty I thought was less of an issue than the environment, with tainted water, toxic soil and diseases caused by air pollution—just to name a few recurring things that I found in my travels.
So I was looking for an opportunity to go overseas and put my entrepreneurial passion to the test. Initially, I did not consider China because of some of the negative things I’d read. But I had a friend in Shanghai, and figured I’d take a month and tour around. Within a few weeks, I saw how much money and support there was for companies working to improve the environment. There was a wave of energy and enthusiasm around environmental sustainability at that time, so I decided it might be a good place to try and start something up. I was intrigued with the scale and how fast things moved in China. I had been exposed to the green engineering through a family member’s company in the U.S. and I worked in banking in Boston for a few years after college so I wanted to leverage these experiences and contacts.
Soon after I arrived in China, I joined forces with a couple of friends who already were involved in a hotel project in Western China. That turned into another project, and before we knew it we had a consultancy, called E8 Resources. We did pretty well with that venture, and I realized there was a need for a larger scale solution. But consulting could only do so much, so I looked at how we could scale this with an online distribution system and expand more on the knowledge side. There was the biggest gap in the green building industry, so we started providing information to real estate developers, owners and operators—and the rest is kind of history. That was 2.5 years ago.
Who are your customers?
I look at building developers, owners and operators as our main customers. We’re sitting down with them, understanding their customers, and helping them by introducing them to vendors. But we get paid on the vendor side, based on the contracts they win and on our monthly membership program.
It’s a two-sided marketplace, which makes it challenging, but provides double the value if we can keep up both sides. That’s why this has potential long term: It’s a win-win scenario once we reach scale. Perhaps most valuable of all is the fact that as we grow, we’ll have data on each project and vendor and on the performance of the solutions.
What are the factors in China that makes it such a good market for your product?
There are several things. The first is the pace of the development economically: China went from a closed economy in the early 80s to a thriving economy that’s growing in so many sectors. They’re growing so fast that they are really just building, building, building and thinking about consequences later. There has been insane growth and a lack of regulation and oversight with poor quality buildings built over the last 20 years.
This lack of regulation around building construction in China is catching up with them. These buildings are very expensive to operate; tenants are generally unhappy because of comfort issues; people want clean air indoors. From the bottom up, there’s a lot of demand from tenants, and on the top-down side, the operational costs are huge.
The good news is that the government is actually the biggest driver for changing this situation, and they’ve made it a top priority. They’ve realized that if they don’t reduce the need to burn coal, they’ll continue to have air-pocalypse type issues and people will continue to flee the cities. They finally are mandating and actually enforcing those regulations, as well as offering incentives and subsidies to make energy efficiency more cost-effective.
How do you plan to expand in the coming years?
We have a mid-term plan and a long-term one. Midterm is to start focusing on sourcing, finding the best technologies from overseas that have a clear market potential in China. More and more we’re seeing demand for technologies that have been perfected overseas and we’re working to bring them to Chinese market. We want to help them understand the opportunities in China and that not every technology that works in the West will work in China.
Long-term, we want to work with Chinese developers who are expanding to the West. Many Chinese developers are investing in the U.S. and Canada, and they need the network of providers and vendors. Our goal is that once we have the credibility in China, we can help them go overseas as well.
What will you be working on between now and the Challenge Festival in 2015?
Right now we’re pretty close to finalizing our seed round—that’s top priority right now. We’re looking at finalizing our last investor.
Another thing is to continue to develop relationships with banks and financing organizations, like the World Bank, and looking at how we can build out this financing solution so we can have a clear path and offering for how they finance these energy retrofits. Once we bring financing to the table, it totally changes the conversation. This is a low-risk, high-reward model if we can figure out a package and do it at scale.
The third piece is just building out our team. I’m looking to bring on senior people with experience in real estate and financing and who know China well, so there’s a lot of heavy recruiting.
Anything else you want to add?
Another angle and natural fit for us is to work with green-building certification programs and audiences, which are really well regarded organizations creating standards for buildings to follow. I think that if we use those as a framework, we can become a pipeline for those organizations to get more buildings on the certification track. We’d like to start building more relationships with those groups in the U.S. and internationally.