General Electric continues its unrelenting buying spree as it looks to redefine itself as a software company while also making enormous investments in its core businesses.
On Tuesday, GE paid a reported $153 million for Bit Stew, according to Canadian news sources. Bit Stew provides an advanced data integration platform that was first built for the utility industry, but now supports manufacturing, aviation and oil and gas.
The British Columbia-based Bit Stew has had GE’s attention for more than a year. GE Ventures led Bit Stew’s $17 million Series B round in May 2015. It has raised a total of about $26 million from investors including GE Ventures, Yaletown Partners, Kensington Capital Partners, Cisco Investments and BDC Venture Capital.
“The fact that GE is the acquirer here comes as no surprise, given GE's sustained venture support for Bit Stew over the past 18 months,” said Andrew Mulherkar, grid edge analyst with GTM Research. “Over this period, Bit Stew expanded from its roots in the utility industry into oil and gas, aviation and manufacturing -- all key industries where GE has a strong presence and strategic focus.”
The acquisition of Bit Stew, however, is not even GE’s largest purchase in the first half of this week. On Monday, GE announced it acquired ServiceMax, a provider of cloud-based field service management software, for $915 million.
Both acquisitions fit in with GE’s focus on its industrial internet platform, Predix. They also dovetail with GE’s recent bet on the recovery of the oil and gas industry after its merger with oil services giant Baker Hughes, which will create a $32 billion company.
For example, Bit Stew’s platform was able to model, index and map an oil and gas data set in less than one day -- a project that Bit Stew said would traditionally take about six months of work.
“We are disrupting traditional approaches for integrating industrial data, leading to time-to-value benefit never seen before in the industrial internet,” Alex Clark, founder and chief software architect for Bit Stew, said in a statement.
Although the oil and gas sector will likely be a focus for Bit Stew, energy companies of all stripes are facing challenges related to complex data integration. Bit Stew started with the utility industry, where it helped utilities including BC Hydro manage devices at the grid edge, such as smart meters and sensors.
A report earlier this year from GTM Research forecasted that utilities will spend about $10 billion globally on advanced metering analytics solutions and integration services through 2021, a significant increase over spending in the past five years.
The opportunity goes far beyond smart meter integration, however. GE aligned its grid and power business with Alstom in 2014 in a $13 billion deal. Bit Stew’s software will complement GE and Alstom's grid management offerings for utilities looking to digitize operations.
The platform vastly reduces the integration time for new data streams. It can also operate across a utility’s territory and down to the grid edge, a feature that is not necessary for all utilities today but will be in the near future. Mulherkar noted that Bit Stew was part of a pilot for PG&E's Grid Operations Situational Intelligence project.
Bit Stew already has offices in the U.S., Australia and Europe. Joining GE will allow it to scale faster across the globe, with a focus on utilities that are investing heavily in transforming their grid to meet a changing power mix.
Greentech Media named Bit Stew to its Grid Edge 20 list last year, in recognition of the work it’s doing to help utilities manage and control the intelligent sensors, rooftopsolarsystems, behind-the-meter batteries, real-time demand response platforms and other distributed technologies that are becoming an increasingly integral part of the world’s energy supply.