Proving the Business Case for the Internet of Things

Smart grid VC funding down in Q2 but up to $289m for year so far

Steve Rogerson
July 28, 2015
 
Venture capital (VC) funding – including private equity – for smart grid companies was down with $104m in 18 deals in the second quarter of 2015 compared with $185m in 15 deals in the first quarter, according to a report from Texas-based consultancy Mercom Capital.
 
Smart grid companies have now raised $289m in the first half of this year compared with $183m raised in the same period in 2014.
 
The top VC funded company in Q2 2015 was Actility, a provider of smart energy management, demand response, M2M and IoT, which raised $25m. Other top deals were: Smart Wires, a grid optimisation provider, which raised $17.3m; Bit Stew Systems, a provider of data analytics and integration for the utility industry, $17.2m; and DataTorrent, a developer of a real-time stream analytics platform for smart grid, utilities and other industries, $15m. Rounding out the top five was Itineris, a provider of customer care and business process outsourcing for the utility industry, which raised $10m.
 
There were 37 investors that participated in smart grid VC funding rounds in Q2 2015, including two accelerators. Within smart grid, data analytics companies raised the most funding. GE Venture was the only investor participating in multiple deals this quarter with two.
 
There was one IPO this quarter: Alarm.com, a provider of cloud based services for home automation, energy management and monitoring services, raised $98m through its IPO in June 2015. 
 
There were three smart grid M&A transactions in Q2 2015 totalling $15m. The only disclosed M&A transaction was the acquisition of T-Mac Technologies, an energy management systems provider, by Utilitywise, an energy and water cost management company.
 
Companies in the battery and storage space received $126m in VC funding in 13 deals, significantly higher than the $69m in seven deals in Q1 2015. Battery and storage companies raised $194m in the first half of 2015 compared with $282m raised in the first half of 2014.
 
Top battery and storage deals included the $58.1m raise by VionX Energy, a manufacturer of vanadium redox flow batteries, followed by Cnano Technology, a manufacturer and developer of multi-wall carbon nanotube products for the energy storage, structural and electronics industries, which raised $15m. Stem, a provider of behind-the-meter energy storage systems, raised $12m; Skeleton Technologies, a developer and manufacturer of ultra-capacitors, raised $10.7m; and Advanced Microgrid, a company that designs, finances, installs and manages advanced energy storage for commercial, industrial and government building owners, received $8.8m.
 
There were 24 investors who participated in VC funding rounds this quarter. Within battery and storage, flow battery companies raised the most funding.
 
There were seven debt and public market financing deals in the battery and storage category totalling $69m in Q2 2015.
 
There was one M&A transaction in battery and storage; Electrovaya, a manufacturer of portable lithium-ion battery power, acquired Evonik Litarion, a manufacturer of lithium-ion cells, for an undisclosed amount. 
 
Energy efficiency companies received $211m in VC funding in 18 deals in Q2 2015, which was up compared with $140m in 15 deals in the last quarter. Efficiency companies have brought in $351m in the first half of 2015 compared with $269m in the same period last year.
 
Top efficiency deals included the $70m raised by Transphorm, a developer of efficient power conversion devices, followed by Aledia, a developer and manufacturer of 3D LEDs, which raised $31m, and FirstFuel Software, a developer of a building analytics platform to enable and track energy efficiency in commercial buildings, which received $23m.
 
Evolution Networks, an energy consumption system provider for mobile network operators, raised $22.5m, and GaN Systems, a developer and manufacturer of gallium nitride transistors for efficient power conversion in solar, wind, smart-grid, electric and hybrid vehicles, and power supply applications, raised $20m.
 
There were 42 investors who participated in VC funding rounds, of which four companies participated in two deals each – BDC Capital, E.On, RockPort Capital and CEA Investissement.
 
There were five debt and public market financing deals in the efficiency category for $355m this quarter compared with $183m in three deals in Q1 2015. The largest deal was the $240m raised by Renovate America, a provider of residential property assessed clean energy (pace) financing in the USA for energy efficiency products through the issuance of bonds.
 
There were ten M&A transactions (four disclosed) for $301m this quarter in the efficiency category. The largest disclosed deal was the $263m acquisition of a 59 per cent stake in Lattice Power, an LED manufacturer, by Shunfeng International Clean Energy, a solar project developer.