In smart grid, it's the best of times, and probably the end of the beginning.Tendril
, which specializes in energy management tools for residences, announced today that it has raised $30 million in a third round of funding. In all, the company has raised $50 million.
But more importantly, the company is undergoing a growth spurt that seems like a slice of life from the late '90s. Tendril is hiring 25 new employees a quarter, said Adrian Tuck, CEO in an interview. (Earlier this year, Tendril had a small number of layoffs.) Several large scale pilots – such as a 3,000 and growing home pilot with New England utility NStar – are being inaugurated and inquiries are streaming in from other customers.
"We are getting one to two RFPs a week coming in the door from utilities," he said. "We will announce a number of pilots in New England, Texas and California in the next few weeks."
Tendril is also working with appliance makers to integrate its Tendril Residential Energy Ecosystem (TREE) software platform into their products, and it is examining strategies to expand overseas.
Chalk it up to a growing confidence among utilities in smart grid technologies and some recent election results. Fueled by an anticipated wave of stimulus dollars, utilities are accelerating their experiments with smart meters and other devices in the home.
Tendril makes thermostats, displays and switches for automatically controlling lamps, air conditioners and other devices. The company's core intellectual property, however, revolves around TREE, which ties the devices together and allows them to communicate. The company's technology relies in part on ZigBee-based communication.
It's an increasingly crowded market, which brings us to chapter two. Many utilities are moving out of the first phase of smart grid experimentation. In phase one, a utility will test technology from several vendors in a limited number of homes, often owned by their own employees.
In phase two, which is beginning, utilities select one technology and test it out in 300 to 50,000 homes, depending on the budget.
"Most people will spend 2010 piloting, but these pilots are whole towns," Tuck said.
Wider, commercial deployment won't likely begin until the second half of 2011. Nonetheless, the nature of the large-scale pilots with their narrow focus on sole vendors means that we will likely be able to identify many survivors and also-rans. In 2010, in other words, you're either going to be in, or out.
"I expect we will see consolidation over the next 18 months," he said.
Many startups will also begin to experience competition from multinationals like Google, Microsoft, Intel, Cisco Systems, Oracle and SAP, who are all preparing the groundwork for a push into some aspect of smart grid. "It is a fairly fast moving market," Tuck noted.
How this consolidation will occur and who might be impacted is anyone's guess. With the new funding, Tendril is one of the best funded companies in the space, putting it up in a similar range with Silver Spring Networks, SmartSynch GridPoint and Trilliant. If anything, the funds raised gives this top echelon of startups some breathing room.
Conceivably, one could also begin to see complimentary partnerships. Tendril does not have current plans to move into energy management systems for commercial buildings. By contrast, Adura Technologies (which will speak at our Green Building Summit this week) has a ZigBee-based system for controlling power in commercial buildings and has no plans to get into the residential market. VantagePoint Venture Partners has invested in both companies.