MaRS Discovery District
101 College Street, Suite 155
Toronto, ON, Canada, M5G 1L7
San Francisco, USA
1700 Montgomery St #2
San Francisco, CA 94111, USA
Rebel, 17th Floor
Universitetsgata 2, 0164 Oslo, Norway
Xeal raises $11M to expand its digital token payment system for EV chargers
Electric vehicle charging companies depend on reliable internet access to sell electricity to customers, track usage data, authenticate users and receive over-the-air updates. If a Wi-Fi connection is unreliable, drivers could find themselves in a sticky situation.
“If the phone loses service, the charger loses service, the environment loses service or the server is down, the charging session never occurs and you’re stranded,” EV charging startup Xeal co-founder Alexander Isaacson said in a recent interview. “That’s the status quo: if you want smart functions it comes at the dependence on someone else’s connectivity.”
Two-year-old Xeal, founded by Isaacson and Nikhil Bharadwaj, aims to solve this tricky problem by bypassing Wi-Fi connectivity entirely, at least at the point of sale. It does so through a patent-pending protocol called Apollo, which uses time-bound cryptographic tokens and distributed ledgers — a mouthful of buzzwords but the centerpiece of Xeal’s technology.
The tech has gotten the attention of investors, to the tune of an $11 million Series A and a previously unannounced $3 million seed round. The Series A saw participation from an interesting mix of investors from climate tech and proptech, including ArcTern Ventures and Moderne Ventures, with additional funding from LPC Ventures, the venture arm of Lincoln Property Company, Harrison Street, Hunt Companies and Align Real Estate. The seed round was co-led by Ramez Naam and Pasadena Angels.
In practice, the Apollo protocol looks like a closed loop system between the driver’s phone and the EV charger, which has no IT infrastructure, modems, ethernet cables or SIM cards. To establish that closed loop, drivers must download the app (on Wi-Fi, of course), enter personal information, payment details and vehicle information. At that point, the driver’s phone receives a cryptographic token to access all of Xeal’s public charging stations. This is the point at which the system authenticates the user.
When the driver goes to charge her car at a station, the station accesses the digital token embedded in the phone – no Wi-Fi required. The cryptographic tokens are “time-bound” because they dissolve after they are used. The charger has something akin to a local server that reads the token and authenticates the session. When the session ends, the charger imparts to the phone a distributed ledger with details on the charging session, like how much electricity was used and the fees.
To get another token — for another charging session — the driver would need to eventually access Wi-Fi, Isaacson explained. In a way, drivers exchange the distributed ledger, with their fee details, for another token. But even if, theoretically, a driver threw their phone into a lake or never reconnected it to Wi-Fi, perhaps hoping to steal a bit of kilowatts, the details of that charging session are distributed to the other chargers nearby, too, and imparted to other users’ phones. That means that even if a single phone does not reconnect to Wi-Fi, other phones that inevitably do can update the ledger over the network.
Xeal says its protocol is much more secure than conventional smart chargers on the market. Isaacson likened the internet to a public highway, with information travelling along it vulnerable to interception and manipulation.
“We’re not going anywhere outside of the charger and the phone,” he said. The company also says Apollo makes for more cost savings too, because real estate owners don’t have to pay for data plans or incur costs associated with installing internet access in hard-to-accommodate places that are convenient for drivers, like a parking garage.
Xeal launched the Apollo protocol in July, after working on it for around two years. Isaacson said the company is on track to install 2,000 charging stations by the end of the year and 10,000 in 2022. The main catalyst for growth, he added, was through targeting major real estate groups, particularly apartment building owners, who are looking to provide EV charging on their properties.
Looking ahead, Xeal aims to use the $11 million funding to hit its target of installing 10,000 charging stations next year. The company will also be hiring more engineers and possibly even expand the self-reliant offline protocol to other use cases.
“Everything you do in life, to perform well, you need to have someone else performing well,” Isaacson said. “That just wasn’t the reality that we wanted. That’s the whole theme of central network dependence in general because when you’re depending on a central focal point, and it ever goes down, the entire system breaks.”