SMART GRID INVESTMENT LAGS

Smart Grid Plagued By Anemic Venture-Capital Investment

25 July 2012 (Renew Grid)

“Smart grid venture-capital (VC) funding remained weak in the second quarter of this year (Q2'12), totaling only $66 million in nine deals, according to a new report fromMercom Capital Group LLC. …The research firm blames changing business models and customer concerns over smart grid technology…

“Funding levels have remained flat over the last three quarters: $66 million in 10 deals for the fourth quarter of 2011 and $62 million in 10 deals for the first quarter of this year (Q1'12). The average deal size in Q2'12 was $7.3 million, compared to $6.2 million in Q1'12.”

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“The top five deals for Q2'12 accounted for 89% of the total $66 million that was raised…Deals in the U.S. accounted for half of the total VC funding raised - with $32.4 million in five deals - followed by Germany, the U.K. and Israel…Twenty-two different investors participated in nine VC deals in Q2'12, but only Siemens was involved in multiple deals (two). There were eight investors in Q1'12.

“Mergers and acquisitions (M&A) activity in Q2'12 totaled $14 billion in seven transactions…Top acquirers with multiple deals this year include Eaton (which acquired Cooper Industries and Gycom), Siemens (Senergy Sistemas de Medicao and RuggedCom) and Itron (SmartSynch and C&N Engineering)…Smart grid communication technology companies received the most funding as a technology group, followed by grid optimization, advance meter infrastructure and demand response companies.”

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