Smart grid receives $434 million in VC funding in 2012


Raj Prabhu,
Managing Partner,
Mercom Capital
Austin, TX, U.S.A. — (METERING.COM) — January 31, 2013 – Smart grid venture capital funding in Q4 2012 came in at $69 million in 10 deals, bringing the total for the year to $434 million in 40 deals, according to Mercom Capital Group’ latest quarterly update and annual review.

This compares with $377 million in 50 deals in 2011. The number of investors in 2012 was also down to 66, from 92 in 2011. Further, only six of the 2012 deals were early stage transactions compared to 16 in 2011.

In 2012 home and building automation companies continued to raise majority of the funding ($198 million in nine deals). This was followed by demand response ($82 million in 10 deals), grid optimization ($76 million in nine deals) and advanced metering infrastructure (AMI) companies ($63 million in eight deals).

Raj Prabhu, managing partner of Mercom Capital Group, said the three distinct sectors, solar, smart grid and healthcare IT, are converging into a single offering – the ’connected home’.

“Home automation companies have struggled mightily over the years to entice consumers, but the convenience and savings created by the convergence of these technologies into one offering or platform might make it more appealing.”

The top VC deal in 2012 was the $136 million raised by from ABS Capital Partners, Equis Capital Partners, NJTC Venture Fund, and Technology Crossover Ventures. Other top deals included $30 million raised by Silver Spring Networks from Hitachi, $25 million raised by Tendril from Vantage Point, Good Energies, RRE Ventures, General Electric and Siemens, $23.3 million raised by Grid Point, and $16 million raised by Comverge from Triangle Capital Corporation.

On the merger and acquisition (M&A) front, a total of 23 transactions were executed in 2012, amounting to almost $17 billion. This compares to 30 transactions for almost $5 billion in 2011 and reflects the continuous slowing in M&A activity as exits have been sparse.

Top M&A transactions in 2012 were the $11.8 billion acquisition of Cooper Industries by Eaton, followed by the $2.3 billion acquisition of Elster acquired by UK investment company Melrose, and the $2 billion acquisition of Vivint by Blackstone. Other top 2012 M&A transactions were the $382 million acquisition of Rugged Comby Siemens, and the $183 million acquisition of ZIV Group by Crompton Greaves.