mardi 15 décembre 2009

Silver Spring Networks raises $100 million in latest round : What VC Confidence in Silver Spring Tells Us About the Smart Grid

As you can read in the official press release, Silver Spring Networks has closed another $100 million in venture financing, putting its grand total at $275 million.

The company says it will use the proceeds to build new Smart Grid applications, hire more employees, and expand to more countries. This latest round was led by Google Ventures, Kleiner Perkins, Foundation Capital, and other existing investors.

That's what you can learn from the announcement. Here are three additional data points that were not in the official release:

1. The company raised the amount in just 30 days (a timeframe not seen since the dotcom bubble)

2. The round was oversubscribed (more people wanted in than they had room to accommodate)

3. The company may use some of the money to acquire other firms

When you're capitalized to the tune of $275 million, it takes a lot of sales to achieve the kind of payback that venture investors expect. Silver Spring has a big mountain to climb. Yet some of the country’s most highly respected venture firms signed on, and in record time. That tells us these VCs believe that:

· The Smart Grid market is one of the single most important market opportunities on earth

· The Smart Grid market is global, and to win, companies must play internationally

· The Smart Grid market is accelerating and the window to earn early adopter advantage is closing

The company told me privately that it plans to expand its suite of Smart Grid applications. It had already jumped into the home area network (HAN) market with its acquisition of Greenbox. From the above we can infer that it will soon be expanding into demand response (especially at the residential level), distribution automation, and the management of PHEVs.

From where I sit, Silver Spring Networks is in a race with Gridpoint to grow fast and go public within the next 18 months. Although the two firms started off in different areas, they are both beginning to orbit around the same core set of utility applications. With two well-funded startups already starting to buy smaller players and roll them up into a "total solution," you have to wonder how much longer single-point-of-pain startups will continue to be of interest to venture financiers.

2010 may prove to be the best of times and the worst of times for Smart Grid startups. For a few of them, it could be the year of their initial public offerings. For others -- those who could not get big enough fast enough -- it could be the year they close or get acquired.

Smart Grid company Silver Spring announces financing

Smart Grid communications company Silver Spring Networks acquires Greenbox

Source : Smart Grid News, 15/12/09

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