The following interview is a conversation we had with Zak Lefevre, CEO of ChargeLab, on our podcast Category Visionaries. You can view the full episode here: $20 Million Raised to Build the Operating System for EV Chargers
Brett
Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders who are on the frontlines building it. In each episode, we’ll speak with the visionary Founder who is building a new category, or reimagining an existing one. We’ll learn about the problem they solve, how their technology works, and unpack their vision for the future. I’m your host, Brett Stapper, CEO of Front Lines Media. Now let’s dive right into today’s episode. Hey, everyone, and thanks for listening. Today I’m speaking with Zach Lefevre, CEO and Founder of ChargeLab, an EV charging startup that rates over 20 million in funding. Zach, thanks for chatting with me today.
Zak Lefevre
Thanks, Brett. So excited to talk to you about ChargeLab and tech in general.
Brett
Yeah, sounds great. So before we begin talking about what you’re building there at ChargeLab, let’s start with a quick summary of who you are and a bit more about your background.
Zak Lefevre
Yeah. My name is Zach Lef. I’m the Co-Founder and CEO of ChargeLab. I actually started this business back in 2016, but we didn’t raise any venture capital until 2019. So I’ve been in and around the EV infrastructure space going all the way back to 2016, and actually even 2015. Before that, I ran another business, actually a construction business. And before that, I did an undergrad degree at McGill University. I studied computer science and finance. So ChargeLab was really the culmination of studying computer science, being very interested in technology and in this great hands on business experience I had gained in my early 20s running these construction businesses.
Zak Lefevre
And, yeah, were founded in 2016, but really grown exponentially in the last three years, going from kind of our first precede funding to a seed and now Series A just in that short period.
Brett
Amazing. And how would you summarize the current state of EV charging? If we just focus on North America? And how have you seen that evolved since 2016?
Zak Lefevre
Yeah, we’re in a much better place in 2022 than were in 2016. But I would still describe the state of EV infrastructure as emerging. It’s an emerging market. It’s a new market. The reality is, charging an electric vehicle is fundamentally different than charging a gasoline vehicle. When you charge a gas car, you go to a gas station, you pump gas, it only takes a few minutes. It’s completely different on the EV side. The negative of the EV side is it’s almost impossible to add as much rain as you can with a gas car. We’re doing super fast EV charging now, but you still need to be plugged in for 1015, even 20 minutes to kind of really top up. And if you want to get to 100% full tank, there’s a taper off when your battery is more than 80% full.
Zak Lefevre
On the flip side, there’s going to be far more EV chargers everywhere where you park the car. And so while it’s less convenient for me to fill my EV along the highway than a gasoline vehicle. I almost never go to a gas station because I plug in at home. I mostly do driving within 100 miles of my home. That’s a stretch, frankly, if you’re an average American or average Canadian, or you’re like me, you’re typically driving within ten or 20 miles of your home. So I have sufficient range to go everywhere I need to in my day to day life. Yes, to do grocery stuff like that. But you have to go downtown to go visit friends in nearby cities. And I charge at home, and I have a full tank of gas every morning.
Zak Lefevre
So the reason I bring this up is because when you think about it, when you look at the numbers of what we’ve already kind of experienced, there’s actually going to be more than one EV charging port for every electric vehicle on the road. So as we look at the vehicle fleet of North America going 100% electric in the next 15 or 20 years, we’re talking about hundreds of millions of new vehicles, and we’re talking about hundreds of millions of charging patients. So we’re in a much better place than were in 2016. But there’s still a ton of growth in terms of chargers at every apartment building, every single family home, every grocery store, and of course, every convenience store and gas station.
Brett
And do you think that charging is going to get faster? I know in the pre interview, I was mentioning to you that a few weeks ago, I rented a Tesla. I was staying in an airbnb that did not have charging. And I was a bit surprised. My first experience with it, that I had to go park in a Tesla charger and sit there for an hour. And I’m an impatient person. I have Add. Like, sitting there for an hour while charged was painful. Is that going to get better, do you think? Or is that kind of the limit?
Zak Lefevre
Yeah, so charging is definitely getting faster, but I think it really comes down to the use case. We’re not going to have any faster chargers in apartment buildings, office buildings, single family homes, because as you mentioned, if you had a charger at that airbnb, you would have been fine. You would have plugged in when you arrived, and you would have been full by the morning. So the kind of charging speed is solved for the destination charging, let’s call it the charging speed still has room for improvement on the high power charging. It’s pretty incredible what you can already do. The Gen Three superchargers or I forget the generation, the latest superchargers, I think it’s Gen Three with Tesla can go up to 250 kw, which can add 750 charging. So the reality is, no easy has that range today.
Zak Lefevre
So you’re charging for less an hour. You were probably charging at a Gen One or Gen two supercharger. So maybe 70 or 150 be a little bit slower. The open networks outside of Tesla are already doing 350 kilowatt. So Electrify America has 350 kilowatt. There’s definitely a road map for 500 kilowatt and even 1 MW charging, which will be super fast. But I think it’s actually more about consistency. Now. When you go DC fast charging, you have everything from 50 kw, which is only going to add 150 miles of range for an hour charging, to the 350 kilowatt chargers, which is going to add three or four times that almost 1000 miles of range per hour of charging. So I think a couple of things need to happen.
Zak Lefevre
Yes, we need to push the frontier with faster charging, but we also need to look at our gas stations and say, you know what, a 50 kilowatt or a 70 kilowatt Tesla charger isn’t sufficient anymore. We really need to be investing in faster charging. And that’s what the infrastructure bill that was passed does. The funding for corridor charging is requiring every site that gets funding to put in at least four chargers, and every port has to be at least 150 kw. So I think taking today’s cutting edge and making it the norm would go a long way, continuing to push the cutting edge for really fast charging.
Zak Lefevre
But then I also just think if we had today’s cutting edge as the norm, and we had it every 100 miles, what happens inevitably when you charge an EV, and this is unavoidable, is you’re going to have a tapering off after about the 80% mark. So ideally, you want to plan your road trips where you never have to charge past 80% because you’re going to be able to plug in every 200 miles. You’re going to want a break for bathroom or food. And so as we get more infrastructure, you feel less pressure to sit there for the whole hour to make sure you get 100% charge because there will be more opportunities for you to charge on the way home in order to fill up.
Brett
Got it. Okay, that makes sense. And now let’s switch gears here a bit and dive into ChargeLab. So, in simple terms, what does the company do?
Zak Lefevre
So, ChargeLab makes software for managing electric vehicle chargers. We don’t build out a public network of chargers, but we provide the back end technology for the folks who are doing that. The analogy we often use is that Tesla’s, like Apple, they build a fantastic product. It’s vertically integrated, you have a Tesla power pack, Tesla solar panels, Tesla car, Tesla supercharger network. And when you’re within that proprietary ecosystem, everything works really well. If you take a Tesla to a Tesla supercharger station, the interface is pretty smooth, it’s pretty reliable, works great. It’s like using Air pods with an iPhone. But if you try to go and use AirPods with your Samsung or your Google Pixel, it’s going to be a different store. It’s going to be much rougher.
Zak Lefevre
So outside of that Apple ecosystem, in our analogy, you’ve got vendors like ChargePoint that for me, feel awful, a lot like BlackBerry. Not that they’re necessarily going to go the way of BlackBerry. I think ChargePoint is going to be around for a while. But they make hardware and software, but they’re not deeply vertically integrated in the way that Tesla is. And then the way I describe ChargeLab is like the Android of EV charging. So we don’t make any EV charging hardware, but we built a software platform that sits on top of hardware built by ABB and Siemens and Phyhong and Tritium and Schneider Electric eating all of these different electronics manufacturers.
Zak Lefevre
And you really get the same benefits that you get in android or Windows ecosystem, where, yes, if you want the sexiest, kind of most expensive option, apples available for you, for Tesla’s available for you. But keeping in mind that 80% of smartphones around the world are running Android, and I think more than that as a market share for computers running Windows. And the reality is, a lot of fleets, a lot of facilities managers, they can’t go with a proprietary solution like Tesla or Charge for it. So they’re going to turn to the most trusted hardware manufacturers in the industry, like ADB and Siemens, and then you’re going to need an intelligence layer on top of that. And that’s what we built. We built the software layer that sits on the open charging hardware.
Brett
Got it. And who’s interested in that? Who is that target customer that you’re targeting right now? And what’s that pitch to them?
Zak Lefevre
There’s a couple of different customer segments that we have, but our key customer is folks who are building large networks of EV charging. Because the larger your network becomes, the less likely just and say, hey, come in and own and operate charges on that my site. Because when Tesla builds a supercharger, first of all, they pick your site, you don’t pick them. Second of all, they own and operate all the infrastructure. So when you look at businesses like Fleets, where charging is just so core to their business, they can’t wait around for a vendor like Tesla or Et Go just to pick their sites. They have to build up their own charging.
Zak Lefevre
Or on the flip side, when you look at the convenience store industry, you look at all of the different convenience stores and gas station brands you have out there, many of them are not going to want to pass off their whole business to Tesla. If you think about it, if I run a gas station, I make money on two things. I make it on selling gas, and I make it on selling snacks and candy bars and cigarettes and water and Coke and alcohol concessions. I’m not going to hand over half of my business to somebody else just because we’re making a fuel transition from petrol to electric. And so we will serve these brands that want a branded solution when they pull up.
Zak Lefevre
When you pull up, they want to be their brand, but they need a back end intelligence layer, managing their chargers, making sure they’re online, processing payments, interfacing with EV drivers. And so we build all of that software, everything from the interface that a driver has when they pull up to a charger and scan a QR code to the very kind of complex back end software to make sure the charges are interfacing with the grid properly and not exceeding the electrical limits of the site.
Brett
Interesting. And are you seeing these, we’ll say legacy gas stations and convenience stores. Are they open to adopting this type of technology? Are they resisting and holding on to the gas profits?
Zak Lefevre
I think it’s back in 2016, nobody in the legacy businesses were thinking about this. Now in 2022, I guarantee every gas station at least that has more than, let’s say, 20 sites. Because some of the ones these and Choosies mom and pop shops might not be thinking about Eevee charging, but anyone who has more than 20 sites guaranteed is looking at and thinking about the future of Echo Chain. And I think the smartest ones are they realize they’re going to be a hybrid fueling stock. Just like they used to just have gasoline and then they added diesel, or they used to just have standard and they added premium. These are already multifuel stations, right? Diesel and gasoline are fundamentally different products. So they’re just adding another product, which is electricity.
Zak Lefevre
And I think the smart ones are thinking about it in the right way, which is okay. There’s periods more popular. There’s periods where Pet school was more popular. We now see that electricity is rising as a fuel source and that’s going to be a mega trend that’s going to continue for the next 20 years. So how do we readjust our business accordingly while we don’t neglect our existing customer base?
Brett
Got it. Okay, that makes a lot of sense. And I don’t know if these numbers exist now, but what is the difference in terms of revenue and profit if someone stops and fills up their gas tank compared to if they stop and charge their card to 80%? Are there numbers on that? What the difference is for the gas station and convenience store?
Zak Lefevre
Yes. First of all, the electrical cost is going to be much more stable, so there’s going to be less fluctuation. So for the consumer, it’s more predictable, what you’re going to pay. With electric fuel. The cost for the consumer is anywhere from a third to a half of what they would pay per mile with gas. When gas goes really high, it can even be as low as a quarter. The profit margins for the convenience stores are similar, right. It’s not an 80% gross margin business, but there’s a premium to getting a fast charge. So consumers are very accustomed to paying more per kilowatt hour when on the go than what they would pay in their own homes.
Brett
Got it. Makes sense. And what about two property managers? I think I listened to a podcast from maybe two or three years ago and you were targeting them at that point. Is that still a focus at all or is that shifted?
Zak Lefevre
Yeah, absolutely. I mean, it still fits into the category of anyone who’s building a very large network of Eey chargers that can’t wait for a Tesla or DV to go to come knocking on their door. So if you think about property managers, I mean, this is a really interesting shift. We’ve talked a lot about gas stations, but the majority of charging in the future is going to be at home. And for the majority of Americans living in cities and a good portion of the country overall home is an apartment building or a condo building.
Zak Lefevre
And so whether it’s property managers that work with multiple kind of condos or it’s an apartment owner that owns a large number of doors, these are going to be some of the biggest networks of charging that can’t sit around and wait for kind of Tesla to say, hey, we want to put chargers here. And so they need to go out and procure chargers from the types of partners we work with, get an electrician to install them, and then our software brings a similar level of value there because if you’re an apartment building, you know you’re in the business of managing your kind of PNL. If you’re giving away energy to residents to charge, you need to recoup that cost.
Zak Lefevre
So just like we help the gas station collect fees from EV drivers when they pull up, we do the same things in apartment buildings and condo buildings and office buildings where you’re offering this amenity, but you want to recoup the cost. And again, there’s profit in it for the property managers. But I think on the property manager side, it’s really more like it’s the hardwood floors or it’s the pools, right? 20 years ago, no apartments or condos had hardwood floors. Not a lot of them had pools. As these amenities get added, you can’t compete in a rental market or in a condo market if you’re not adding the amenities. Right. Nobody wants to spend $800,000 on a condo in a building that doesn’t have a gym, right?
Zak Lefevre
And so it’s going to be a very similar dynamic where there’s going to be marginal businesses around the edge to make a little bit of money on. You be charging. But the main reason they’re going to do it is so they can sell that $800,000 condo or they can rent that $2,000 per month apartment. Because frankly, if you own and drive a Tesla or another electric vehicle, you’re not going to rent in a building that doesn’t allow you to charge.
Brett
Got it. Okay, that makes a lot of sense. And you’ve raised 20 million in funding so far. What do you think the investors are so excited about?
Zak Lefevre
I think as an investor, there’s a lot of kind of blogging and philosophy and debate, do I invest in the product? Do I invest in the team, or do I invest in the market? And I think the intuition is, oh, we invest in the product. And the smart investors will say, no, we invest in the team, because the right team will figure the product out. And then the brilliant investors say, no, we invest in the right market because there’s going to be ups and downs in your team. You’re going to hire some of the right people, some of the wrong people. There’s going to be kind of changes to the team over time. But if you are in the right market, that’s where the real growth opportunities are.
Zak Lefevre
So I would say, unequivocally, that our investors, yes, they love our team, they love our product, they love how we’ve differentiated from the competitors in our first few years already. But really, I think what gets them really excited is this market, this fact that EV sales are growing at 30% to 40% kagar. There are more EVs sold in the past 18 months in America than in the previous ten years. And that trend is continuing, this kind of doubling compounding effect. And so that’s what’s really exciting for investors in this space. Got it.
Brett
And what’s the split in terms of your focus on Canada and North America? Like, percentage wise? How much of your customer bases in the US?
Zak Lefevre
So the majority of our customers are in the US. We are headquartered in Toronto. In Canada. It’s a great tech market, right? It’s not San Francisco. It’s not New York. But as far as secondary tech markets go, I think Toronto is the best. We have phenomenal engineers, and it really gives us an advantage where a lot of our competitors in the US. Because it is so costly to hire engineers in California, they end up offshoring to Eastern Europe or India. We keep all of our software development in house in North America. One of the reasons we’re able to do that is because we’re based in Toronto. But we recognize that kind of, from a population perspective, within the North American market or within Canada in the US. 90% is in the US. And 10% is in Canada.
Zak Lefevre
Population wise, we probably have a little bit of a home turf bias. We probably spend 20% of our time in Canada, but 80% of our kind of sales and growth and business development is in the US. And we’ve got 48 employees. Now. A dozen of them are in the US. We’ve got a couple of people in San Francisco, but someone in Denver, New Jersey, Texas, Washington DC. So we have pretty good coverage, especially on the sales team that’s interacting with folks day to day for being in all the key markets we want to be in.
Brett
Got it. And how would you summarize the state of venture capital in Canada right now? For my past work with clients, how I understood it a few years ago is it was very behind places like Silicon Valley, and a lot of the tech investing was happening in the public markets, I think was the TSXV that they launched, and a lot of tech companies were going public there. Is that still the case in Canada, or has that ecosystem expanded? And is there a lot more capital there for tech companies like you?
Zak Lefevre
I think largely you have the right picture. The vast majority of our funding comes from the US. I wouldn’t really advise Canadian companies to focus solely on pitching Canadian investors. I think the reality is the United States is a singular market and culture. It’s not just about where the money is. It’s about the culture and the culture of risk taking. And Canadians are less risky. And so if you want to raise venture capital, I really think you do America. I think that applies whether you’re in Canada or El Salvador or Germany. I think if you want to raise venture capital, you should come to America because that’s where the business is. So you should at least be pitching us investors. You know, I will say that there’s kind of a globalization of Silicon Valley where there’s more venture money being raised everywhere.
Zak Lefevre
In Toronto, in Rio and Tel Aviv, everywhere around the world, there’s more money being put into tech because everybody looks at the success that the Silicon Valley has had. And by the way, this also happens in the US. Right? There’s more kind of excitement about tech companies in New York than there’s ever been before. And so I would say compared to when I started out in 2016, there’s definitely a little bit easier to get off the ground raising money in Toronto or Montreal or Vancouver. But I still think Silicon Valley is the heart of venture capital, and it’s just like finance. If you want to be an investment bank or you’re going to have a lot of advantages if you’re at least meeting or talking to people in New York, if not, living there.
Brett
Makes sense. And Zach, how much traction have you seen so far since you launched? Was 2019 the official launch date or what was that official date?
Zak Lefevre
So, I mean, we started in 2016, and it was a back end software for EV chargers, while it sounds obvious now, really was not an obvious idea. And so there’s kind of a lot of iteration and early experimentation to figure out exactly what we want to build. We launched the first version of the platform in 2018, and then we raised our first venture capital in 2019. So, yeah, since around 20 18, 20 19, we’ve signed up over 150 customers. We’ve deployed thousands of chargers. We’re right now in 26 states and Canadian provinces, a lot on the East Coast and West Coast. But we’re also in Colorado, we’re in Utah, we’re in Texas. We’ve got this big kind of base of customers and a customer could be kind of one large fleet with one big depot.
Zak Lefevre
Or it could be a building operator that owns multiple sites, or it could be one of these petrol operators that owns multiple sites. Where we’re going is kind of more of an enterprise software focus. So as this market matures in the early days, nobody was in this business. So to get our software installed, we had to go to people’s sites and tell them which charges to buy and sell them the chargers and help them get them installed. The great thing that’s happened as this market is matured is there’s now a healthy ecosystem of partners that we have that do the installs that sell the hardware. And so we can really focus on the software. And as a result, we started focusing on kind of enterprise licenses selling to bars or other partners that are going to take our software to hundreds of buildings.
Zak Lefevre
But rather than us interfacing with every building, we interface with those partners. So these days we’re trying to find fewer, but drastically bigger customers. But I think we’ve seen tremendous growth. Even just this year. We’ve doubled the number of chargers connected by our platform in the past six months and we expect to continue seeing that kind of growth.
Brett
Amazing. And if we zoom out into the future, what do you think the future of EV charging is going to look like? And of course, what role are you going to play in shaping that future?
Zak Lefevre
The biggest thing that we’re working on is making it more frictionless for EV drivers and site owners and everybody in the ecosystem right now. It is such a pain to get a smart charger installed at your site or in your building. The configuration process, the hardware activation process is entirely a mess. And that’s okay. It’s an early market, but we’re going to work on starting with the installers, better processes to configure and deploy the chargers, moving to the site host easier ways to manage and kind of deploy and understand your EV chargers. And it’s finally coming to drivers. You should just be able to kind of pull up, plug in and very easily start a charging session.
Zak Lefevre
Today there’s like 20 different companies that all have a proprietary app that you have to download and you have to load a wallet balance on your apps. You download the app and you put $20 there and then you try to make it work and then it doesn’t work. And they say, well, we just send you an RFID card in the mail. Why don’t you wait for two weeks? And it’s ridiculous. So already right off the bat, when you pull up to any of our Charges. You can scan a QR code. You don’t need to download an app. You can transact with it immediately, put in your credit card information. But we only want to make it easier and more frictionless as we go.
Zak Lefevre
There’s really interesting protocols that are being developed between the Charger manufacturers and the vehicle OEMs to kind of create a seamless experience like Tesla offers. When you plug in your Tesla, the charges just authenticates you and starts charging. We’re still a few years out from that being really widespread for the rest of the market, but I think we’ll get there. I think charges will become more abundant. It will become easier to charge. And frankly, the folks who cannot deliver great experiences for site hosts or EV drivers will not make it because it’s just going to get more competitive as companies like ours and others scale up.
Brett
Amazing. Well, Zach, I think that’s all we’re going to have time for today. If people want to follow along with your journey, where’s the best place for them to go?
Zak Lefevre
Yeah, you can find me on Twitter at Zak Lefevre. You can visit our website chargelab.co.And yeah, we’d love to hear from folks who are driving EVs, from folks who recently got a ChargeLab charger installed near them, what experience you’re having or if you’re thinking of building and now, who could be chargers. That’s who we’re targeting and who are working with now.
Brett
Got it. Amazing. Well, thanks so much, Zach. Really appreciate it. And best of luck.
Zak Lefevre
Awesome. Thanks, Brett.
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