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July 25, 2012

Little Ventured or Gained in Smart Grid Funding During Q2 2012

Smart grid venture capital (VC) funding in Q2 of 2012 totaled $66 million in nine deals, according to a report from Austin, Texas-based Mercom Capital Group.

Energy management firms attracted most of the capital, although the top deal was the $15 million raised by Manheim, Germany-based Power Plus (News - Alert) Communications, a provider of broadband powerline communication systems for the smart grid.

VC funding levels remained stable in comparison to the previous quarters, although weak; During the first quarter of 2012, 10 companies raised a total of $62 million; during the last three months of 2011, 10 deals worth $66 million were completed.

“Funding levels continue to be extremely weak in the smart grid sector – a reflection of shifting business models as the industry continues to struggle to understand customer needs and address customer misconceptions along with security concerns and other issues,” said Raj Prabhu, managing partner at Mercom Capital Group.

Other companies that ranked in the top five this quarter included (in descending order) Tendril, an energy management company that raised $11.3 million; On-Ramp Wireless, a low-power monitoring and control applications provider that received $10.1 million in capitalization; Gridco, a developer of utility-scale power management systems that attracted $8 million in funding, and Navetas, an energy measurement, management and conservation company that also received $8 million in investment; and  TaKaDu, a source of advanced monitoring solutions for water distribution networks that raised $6 million.

Twenty-two disclosed investors participated in nine VC deals in Q2 2012, but only Siemens (News - Alert) was involved in multiple deals (two). There were only eight investors in Q1 2012.

Finally, in merger and acquisition (M&A) activity, there were seven transactions, for a total of $14 billion during Q2 2012. Top M&A transactions were the $11.8 billion acquisition of Cooper Industries, a grid and equipment company by Eaton (News - Alert); the $2.3 billion acquisition of smart meter company Elster by U.K. investment company Melrose; and the $72 million acquisition of ZigBee systems developer Ember by Silicon Labs.

For a complete list of Q2 2012 transactions in the Smart Grid sector, click here.


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Edited by Braden Becker
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