2015 Off to a Good Start for Power Grid Technology Companies
VC investments in companies innovating in grid-related technologies surged nearly 16x from $200M in Q1 2015 from $32M invested in Q4 2014. Even though deal volume has not changed significantly, the average deal size did: $18.5M in Q1 2015 vs. $4M in Q4 2014 (though this Q1 average is driven by a $115M deal). The increase in the number of deals is a good sign for the sector after a persistent quarterly slide through 2014: 19 deals in Q1 2014, 10 in Q2 and 8 in both Q3 and Q4.
Corporate and Venture Capital Investments in Smart Grid Companies, 2010-2015 YTD
So, who are the companies in the spotlight this year? The most notable deal of this quarter is a $115M growth equity investment in French startup Sigfox, a developer of an ultra-narrow band technology for Machine-to-Machine communications, another token of the trendiness of Internet of Things technologies. Corporates like Spanish telecommunication company Telefonica, French utility GDF SUEZ, chemical giant Air Liquide and Intel were part of the deal, along with venture capital and private equity firms like Idinvest Partners. The rise of the internet of things also gave rise to companies innovating in cyber security. Tempered Networks wants to tackle the risks threatening the exchange of enormous quantities of data through the billions of connected devices out there. Ignition Partners and IDG Ventures bet on the Seattle-based company, investing a $15M Series A in the start-up’s technology that is designed to protect industrial control systems and equipment and industrial internet of things to shield them from targeted attacks and vulnerabilities.
Kent, WA-based Novinium, a developer of maintenance technology that rejuvenates power cables to extend their useful life up to 40 years, received $20M in growth equity from SJF Ventures. It is the fourth investment secured by the company, after its Series A, Series B and initial growth round in 2005, 2007 and 2008, respectively. Enbala Power Networks received $11M in growth equity from new investors GE Ventures and Edison Energy, as well as existing investors Export Development Canada, EnerTech Capital and Chrysalix EVC. Another significant deal was the $14M Series B investment into digital energy asset manager Blue Pillar. Existing investors such as Allos Ventures and Claremont Creek Ventures participated in the deal, along with EnerTech Capital, Maryland Venture Fund and Arsenal Venture Partners. These funds will be used to scale deployment of its cloud-based microgrid management platform that monitors critical backup power systems.
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