Tropos Networks is back on the fundraising circuit.

After announcing a series of new clients, including the City of Naperville, Illinois, Silicon Valley Power and Burbank Water and Power, the Wi-Fi evangelist is looking to expand its distribution automation business.

“We want to raise $5 million to $6 million in growth capital,” said Tropos CFO John Eichhorn at the Jefferies Clean Technology Conference. “We are going to do three things with the money.  First, hire more salespeople. Second, hire more engineers. [...] We will continue to develop the products that we have, but we want to add customization [and] features that are going to resonate for the distribution automation portion of the market, which is growing dramatically. The third piece is to provide working capital.”

To date, Tropos has raised more than $30 million from investors including Benchmark Capital, Duff Ackerman & Goodrich and Voyager Capital.  The firm’s existing investors are committed to funding half of the firm’s latest round.

“We are really, really close [to being profitable].  Slightly cash flow negative, but we are right on the cusp of being break-even,” said Eichhorn.  “We are trying to find partners who are really plugged in to the smart grid space.  I think it will be really easy for us to find $3 million. I want to be picky and find not $3 million that is just money, but somebody that can actually help us make connections in the space with partners internationally that will help us build the business.”

Increasingly, Tropos’ business will be focused on distribution automation.

“To really make the smart grid smart, distribution automation -- how [to] actually move the electrons around -- is the next big bottleneck,” said Eichorn.  “Substation automation or substation security… [is] not what is holding [utilities] back from having a smart grid.  It is being able to manage the reclosers, transformers [and] switchers -- all the stuff that is in the middle of the distribution area network.”

Adding intelligence to the grid, and particularly the last few miles of it, has just begun: sales of distribution automation equipment will grow from $2.3 billion to $5.6 billion by 2015, according to GTM Research.

Although Eichorn believes that “there is a place for cellular, a place for WiMax, and a place for Wi-Fi,” Tropos will continue to pursue aggressive growth, with the hope of winning business that might otherwise go exclusively to Silver Spring, Trilliant, SmartSynch, On-Ramp Wireless, Arcadian Networks or another smart grid networking provider.

“We believe that in the next 15 to 18 months, winners and losers are going to be decided,” said Eichhorn. “As we grow the business, we are going to take that money and reinvest it into the business. My goal is not to build a huge balance sheet at this point and time with which we would go buy things.”

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Yoni Cohen is a JD-MBA student at the Yale Law School and the Wharton School of the University of Pennsylvania.  A former college basketball writer for Fox Sports, he tweets about greentech @Cohen_Yoni.