SOURCE: Mercom Capital Group

Mercom Capital Group

January 18, 2012 13:29 ET

Mercom Capital Group: 2011 Smart Grid Venture Capital Funding Drops by Half

$4.6 Billion in Smart Grid M&A Activity in 30 Transactions

AUSTIN, TX--(Marketwire - Jan 18, 2012) - Mercom Capital Group, llc, a global clean energy communications and consulting firm, today released its annual and fourth quarter merger and acquisition (M&A) and funding activity for the smart grid sector for 2011.

Venture Capital (VC) funding in 2011 brought in $377M (million) in 50 deals (24 disclosed) compared to $769M in 51 deals in 2010 (27 disclosed). The average VC funding round dropped by 50 percent in 2011 to $7.5M compared to almost $15M in 2010. Early rounds of disclosed funding (Seed and Series A) accounted for 16 of the 50 deals in 2011.

"Venture capital funding in smart grid was anemic at best in 2011. Even though the number of transactions was about the same as last year, the average deal size dropped in half," said Raj Prabhu, managing partner at Mercom Capital Group. "Interestingly, the number of VC investors increased to 92 from 87 in 2010, pointing to continued investor interest but lower risk appetite."

Top VC deals in 2011 were iControl Networks, a broadband home management company ($51.6M), SmartSynch, a smart grid company that uses cellular networks for utility smart grid projects ($25.7M), Silver Spring Networks, a provider of utility networking equipment for smart grid deployment ($24M), Gridpoint, an energy management solutions provider ($23.6M), and JouleX, a provider of energy management systems for data centers and distributed office environments ($17M).

Top venture capital investors in 2011 were GE with six deals, Emerald Technology Ventures with five deals and Kleiner Perkins Caufield & Byers with five deals. Other top investors were Foundation Capital, Intel Capital and Rockport Capital with four deals each.

There were some major M&A transactions in 2011, including the $2.3B (billion) acquisition of smart meter company Landis+Gyr by Toshiba and the $2B acquisition of Telvent, a real-time IT solutions and information provider, by Schneider Electric.

Only four acquisition transactions were disclosed out of 30 total transactions, pointing to a much higher total amount than the $4.6B reported in M&A activity. This follows the same pattern as 2010 when only four transactions out of 40 were disclosed.

For a copy of Mercom's Smart Grid Funding and M&A 2011 Report and other clean energy reports, visit: http://mercomcapital.com/cleanenergyreports.php.

About Mercom Capital Group

Mercom Capital Group, llc is a global clean energy communications and consulting firm with offices in the United States and India. Mercom's communications division helps clean energy companies build powerful relationships with media, analysts, government decision-makers, local communities and strategic partners. Mercom's consulting division advises clean energy companies on new market entry, custom market intelligence and overall strategic decision-making. Mercom delivers highly respected industry market intelligence reports covering Solar Energy, Wind Energy and Smart Grid. Our reports provide timely industry happenings and ahead-of-the-curve analysis specifically for C-level decision making. To get a copy visit: http://mercomcapital.com/market_intelligence.php. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com.

Contact Information