Many start-ups and smart grid companies are currently trying to wedge themselves into specific vertical niches.
GridPoint is going the other way.
The Arlington, Va.-based company -- which has raised over $200 million from investors and says it will achieve revenues of over $100 million this year -- is in the midst of tweaking its business plan once again in an effort to jump into what it (and others) believe will be one of the largest growth markets in green: energy efficiency services for consumers and businesses.
A forthcoming website will offer customers "good-better-best" packaged solutions for energy retrofits and solar panels as well as advice and information on energy consumption.
In February, GridPoint acquired energy contractor Standard Renewable Energy: Standard's trucks will be painted over with GridPoint logos. Like Recurve, GridPoint will boil down its best practices into software to optimize retrofits.
"GridPoint software is embedded in everything we do. We won't do it unless we can embed software," said CEO Peter Corsell. "We are tying up the end points of the smart grid."
Over time, GridPoint will ideally try to tie it into the software it sells to utilities, conceivably paving the way for demand response and monitoring services. This week, the company announced an alliance with EcoBee, which makes home energy management consoles and thermostats.
If you think the business plan almost sounds like an amalgamation of Recurve, EnerNoc (demand response), Trilliant (grid management), Sungevity (solar software and sales) and the impulse-buying techniques perfected at Dell, well, you'd be right. The idea is to transform the company into a trusted, persistent intermediary between utilities, consumers, businesses, and service providers. It's still a vision, Corsell admits.
"On a macro level, the whole drive is to make the ecosystem smarter, leaner and greener," said Corsell. "We're ultimately leveraging software-based intelligence to optimize distribution and consumption."
With different points of entry in the market, GridPoint will also ideally be able to avoid the Top Chef Phenomenon in smart grid, wherein a utility project results in one happy winner and 13 dejected also-rans. EnerNoc, interestingly, is taking a similar diversity/expansion path, having recently moved into building services.
Cue the skeptics. If there's a company that smart grid execs and investors tend to mutter and complain about, it's GridPoint. GridPoint has money, critics assert, but not as many utility contracts as one might think.
The most visible project the company has been involved in is SmartGridCity, Xcel Energy's home automation project with a budget that swelled beyond $100 million. To contain costs, Xcel asked participating companies to pay to have their technologies become part of the project.
GridPoint has also had to change business plans a few times. It started out in the early part of the decade promoting a system for managing energy in upper-middle-class homes. Because energy prices were still comparatively low at that point, the market failed to develop. In turn, GridPoint decided to take the software and transform it into an operating system for the grid.
Then, in 2008, the company started to go on a buying spree to enhance its grid portfolio. It bought V2Green (which allows utilities to communicate with electric cars) in 2008 and followed in 2009 with Lixar, which makes building energy management consoles and tools. The acquisition of Standard took place in February, and the new strategy finally began to congeal a few months ago. Juggling these acquisitions and different product strategies would be difficult even for a large firm.
"While the IPO market appears to be beginning to thaw, Gridpoint's investors can only hope for an acceptable IPO or a strategic sale. On the strategic sale front, that option becomes increasingly less attractive to the extent Gridpoint is a hodgepodge of various solutions and services," wrote one source in the financial community. "Also, as it gets bigger and bigger with an increasing price tag, the world of potential acquirers shrinks."
To answer the critics, Corsell points at GridPoint's progress. It is participating in projects with utilities such as Kansas City Power & Light that have been funded by stimulus grants. The company has a number of high-profile executives culled from Accenture and Microsoft and has developed a strong relationship with Cisco. Another capital raise will take place in a few months.
"We will beat $100 million in revenue in 2010," he said. "We and Silver Spring are by far the most successful (smart grid) companies."