Monday, November 5, 2012

Smart Grid VC Funding shows signs of life

After remaining flat in the past four quarters, VC investments in Q3 2012 saw a significant uptick. Smart grid venture capital (VC) funding showed some signs of life in Q3 2012 with $238 million in 12 deals. The rise in funding was mostly due to $136 million raised by, a security and home automation company.

VC funding in the last three quarters had been relatively weak (Q4 2011 - $66M in 10 deals, Q1 2012 – $62M in 10 deals, Q2 2012 - $66M in 9 deals), whereas VC funding even without the transaction exceeded $100 million this quarter.

“The funding deal and the acquisition of Vivint for $2.2 billion by Blackstone Group is part of a growing trend where home security companies have expanded into home automation,” said Raj Prabhu, Managing Partner at Mercom Capital Group.

We expect to see more transactions in this niche where security, cable and telecom companies expand their offerings to cover the whole ‘connected or digital’ home services which would include everything from communication and automation services to solar installations.”

• Q2 2010 - (Landis+Gyr $165M; OpenPeak $52M)
• Q3 2010 - (Trilliant $106M; Nexant $43M)
• Q4 2010 - (OPower - $50M; AlertMe $24M; Ice Energy $24M; Tendril $23M)
• Q3 2011 - (Six deals out of 10 in Q3 were for $10 million or more)
• Q3 2012 – ( $136M; GridPoint $23.3M)

Apart from Vivint and, other companies in the home security and home automation business include AlertMe, Intamax Systems, Control4, iControl Networks, Home Automation Inc., APX Alarm and Xanboo among others.

Source: Mercom Capital Group, llc, Oct 2012