The nice thing about Leif Elgethun’s business, Retrolux, is that it’s pretty much recession-proof, he said.
Elgethun’s company develops software for the energy-efficient lighting industry. It has two primary markets: lighting retrofit contractors, who are helping building owners change their existing lighting to more efficient models, and energy service companies, which help building owners reduce their energy consumption with a variety of solutions, including lighting retrofits, he said.
“When things are really good, people are looking for ways to reinvest profits in future success,” said Elgethun, CEO of the company. “When the market is up, people invest in high return-on-investment (ROI) projects, and projects in our industry have very proven, very high ROI. However, it’s also recession-proof, because when things get tight, companies are looking for ways to save money.”
The three-year-old Boise based company has been named to the 2019 Best Tech Startups in Boise list by Tech Tribune. “We’ve been on that list since the first year they started doing it,” Elgethun said, noting that last year the company also made a similar list for startups in Idaho.
Based in the historic Alaska Building at 10th and Main, Retrolux now has eight employees, including three software developers. And the company is now moving toward being a more commercial product, Elgethun said.
“We’ve crossed the chasm from minimum viable product, something that works, to a commercialized product and something the market wants,” he said. “We’re really focused on customer experience, ensuring the software product meets their needs and makes them more successful.”
And the market appears to be responding. “We’re continuing to see very solid quarterly growth,” Elgethun said, though he declined to provide specifics. “We continue to expand our customer base, revenue, and product offerings.”
The company’s customers are nationwide as well as in Canada. Less than 5 percent of its business comes from Idaho, though it is working on a light-emitting diode (LED) lighting conversion project for a local retailer with 24 locations across the state.
Retrolux has been funded by several local angel groups, including the Boise Angel Alliance, Elgethun said, though he declined to provide specific numbers. The company was planning to close its latest round by the end of the year, he said.
“Our exit strategy right now is to continue to grow and seek strategic partnerships, with the intent of developing those relationships with an eye toward acquisition,” Elgethun said, though he wouldn’t specify what sort of acquirers he had in mind. “We’re always going to keep our ears open for the opportunity to exit.”
Part of Elgethun’s reticence is due to the competitive nature of the business. “We can’t let our competitors know those metrics,” he said. “We are the only company in our market that was founded and led by people who are from the lighting industry. The technology we’re building, we believe, more closely matches what our customers are expecting from a software program. It’s easier to use, more intuitive, and more cost-effective.”
But while some companies are starting to worry about an upcoming recession, Retrolux isn’t concerned. “An energy-efficiency project that has a net positive out of the gate is very attractive,” Elgethun said. “Companies in a down market may be down on cash, but there are plenty of lenders to provide financing for projects.”
For example, Retrolux’ financing partners offer no-money-down loans, Elgethun said.
“Companies can get brand new, beautiful lighting, put no money up, and have guaranteed cost savings in the very first month,” he said. “It’s attractive to do a program like that when looking to improve business operations by reducing costs. When times are good, people want to do projects, and when times are tough, people still want to do projects.”