Strategic Investing Creates Smart Grid in a Box

Summary: Foundation Capital has invested in enough different Smart Grid companies that it can offer the collection as an end-to-end Smart Grid solution.  That’s the thinking of Katie Fehrenbacher in a recent Earth2Tech article. Fehrenbacher points out that all three vendors recently chosen by Texas utility Bluebonnet Electric Cooperative for its AMI project happen to be Foundation Capital portfolio companies.  Those companies are Control4 (for its HAN and in-home displays), Silver Spring Networks  (for smart meters) and eMeter (for smart meter data management software).  Although Smart Grid companies in Foundation Capital’s portfolio aren’t integrated vertically, they have enough pieces of the puzzle to put together a value chain that is stronger than the individual links.

 

Quick Take: Foundation Capital isn’t the only one taking this kind of keiretsu approach with interlocking relationships.  Goldman Sachs, for example, is doing much the same thing with the Smart Grid companies it’s investing in, creating its own kind of Smart Grid ecosystem.  Moreover, Goldman also has ownership stake in some utilities. That means they can leverage those connections and send their people in to make deals at a very high level.

 

More details: Fehrenbacher speculates that perhaps Control4, Silver Spring Networks, and eMeter have made deals with other utilities as a group. She doesn’t know, nor  does she have any evidence that the three even try to get deals as group, since they are all separate companies with other shareholders beside Foundation Capital. 

 

Still, she adds, Foundation Capital has a piece of almost every place on the Smart Grid chain, virtually owning the sector as far as startups go.  “I can’t think of a venture firm that has had more of an effect on smart grid innovation than Foundation.” She writes.

 

With big companies like IBM and Cisco entering the Smart Grid arena, every little advantage helps.

 

   Earth2Tech article by Katie Fehrenbacher

   SGN news and analysis of Control4 deal