Venture capital funding in smart grid sector at $65 mn in Q3, 2013: Report

MUMBAI: Venture capital funding in smart grid sector stood at $65 million in 12 deals in the third quarter of 2013 ended September 30, according to a report by clean energy consultant Mercom Capital Group.

Total corporate funding in the sector was $129 million, including the $64 million raised in an IPO, the firm said in a statement.

"VC funding in the sector has remained flat at this level over the last eight quarters, with the exception during July-September of 2012 when $238 million was raised. However, funding was slightly up this quarter. We also saw a rare IPO this quarter," Mercom Capital Group Chief Executive Raj Prabhu said.

According to the report, VC funding in the sector stood at $50 million in 10 deals in April-June 2013.

Top five VC deals were led by Space-Time Insight, which raised $20 million from London-based private equity fund Zouk Capital, which joined current investors Opus Capital Ventures, EnerTech Capital and Novus Energy Partners.

On-Ramp Wireless raised $15 million from new investor Enbridge along with existing investors Third Wave Ventures and Energy Technology Ventures. This brings the total amount raised in its series C round to $31 million.

In the third deal, Varentec raised $8 million from Bill Gates and Khosla Ventures. This deal was a new addition to Bill Gates' collection of energy investments.

In a second of its investments, Khosla Ventures also invested $5 million in Bidgely. The fifth deal saw WaterSmart raising $4.5 million from Physic Ventures, Draper Fisher Jurvetson, Apsara Capital and The Westly Group.

"Like the previous quarter, home and building automation companies received the most funding with $36 million in seven deals followed by grid optimisation companies with $20 million in one deal," Prabhu said.

During the quarter, there were four merger and acquisition transactions of which only one transaction, Schneider Electric's acquisition of Invensys for $5.2 billion, was disclosed. This is Schneider Electric's sixth smart grid acquisition, the report said.

The consultant further said the period under review also saw a successful exit in the IPO of Control4, a provider of automation and control solutions for the connected home, which raised $64 million.