Adura Technologies, a Bay Area stalwart in the networked lighting space, has been acquired by Acuity Brands, a giant in commercial lighting. It’s the first in what may well become a wave of acquisitions in networked lighting, where startups like Adura, Daintree, Enlighted, Digital Lumens and others have staked significant claims in the still-nascent field.
It’s as yet unclear whether the financial terms of Adura’s acquisition should be cheering or dispiriting for the sector, however. Acuity didn’t disclose its purchase price, though the Atlanta-based company, which had $1.9 billion in 2012 revenues, said it was “not expected to materially impact Acuity Brands` fiscal 2013 consolidated financial performance.”
Adura, founded in 2005, has raised about $25.5 million from investors including NGEN Partners, VantagePoint Capital Partners and Claremont Creek Ventures. In that time it has networked lights across about 7 million square feet of commercial real estate. Some 4 million square feet of that is in parking garages, but the San Francisco-based company has also gone into a few showcase office spaces, where it has claimed energy savings of 50 percent to as high as 80 percent.
Those are fairly standard efficiency claims for networked lighting, though getting more than 50 percent reductions requires a clever mix of technology and behavior change to reach. Still, it’s an indication of how much efficiency remains to be seized in commercial lighting, which uses roughly a quarter to a third of the energy use in typical buildings.
Industry experts say that only 10 percent to 20 percent of commercial real estate has sophisticated lighting controls. The market for wireless and wired lighting, along with the array of sensors that check for daylighting, occupancy, temperature and other key variables, could add up to a $15 billion to $20 billion industry over the coming decade or so, research predicts.
That makes it a wide-open market, with a relatively small footprint. Adura’s 3 million square feet of non-parking garage space is less than rival Daintree Network’s 10 million square feet under networked lights, or Enlighted’s 5 million square feet, although both of those companies haven’t been on the market as long. (UPDATE: A previous version of this story misstated Daintree's most current figures for square footage,.)
Adura, which underwent a CEO change and reorganization in 2010, once predicted it would have 100 million square feet under management by now. Why haven’t it and its competitors reached such lofty goals? Well, lighting is a highly fragmented industry, with lots of component and integration players on the manufacturing side, as well as a dense network of regional distributors and contractors. Since lights are supposed to keep working for decades, turnover in technology is slow.
In other words, it’s a tough market for startups. It also puts the burden on tech developers to make their innovations as simple to integrate into the existing business chain as possible. That’s led to partnerships that go beyond startups embedding their wireless processors in lights from big manufacturers.
Daintree, for one, is partnered with Philips and Sylvania Lighting Services to bring its networked light fixtures and nodes to the market. The Mountain View, Calif.-based startup, which has raised about $18 million to date, is also working with California Eastern Labs (CEL) and Silicon Labs to embed ZigBee-enabled chipsets in LED drivers and ballasts, in order to to pre-enable them for wireless control, so to speak.
Digital Lumens, a startup that packages LED lights and control systems for warehouse and industrial clients, has found that customers want an integrated solution, rather than in separate pieces, according to president and CEO Tom Pincince. The company raised $10 million this week to bring its VC total to $35 million from investors including Black Coral Capital, Flybridge Capital Partners and Stata Ventures.
The residential lighting sector is a tougher nut to crack, given the average homeowner’s lighting bill is too small to care about. Still, we’ve seen wireless residential smart lighting systems being rolled out by the likes of GreenWave Reality and NXP, or Google and Lighting Sciences, and home automation from the likes of Verizon, AT&T and Comcast may start to colonize light switches with remote controls. Adura, for its part, linked up back in May with the EnOcean Alliance, the proprietors of a low-power wireless standard that’s being used to network about 200,000 green buildings worldwide, mostly in Europe.