Home energy management startup Tendril has gone through a lot of changes over its 14 years, including a near-death experience and a slow-but-steady climb into the top tier of customer engagement and energy intelligence providers for U.S. utilities.

Now the Boulder, Colorado-based company has hit a new milestone for the venture investors who’ve put more than $100 million into it to date: an exit.

On Tuesday, Tendril announced it has secured a majority investment from private equity firm Rubicon Technology Partners, with participation from Morgan Stanley Alternative Investments and Zoma Capital. 

Financial terms of the deal were not disclosed, and Tendril CEO Adrian Tuck declined to provide details in an interview. But in broad terms, “this is a significant control investment, and it will be providing a good exit for our existing shareholders” — a list that includes VantagePoint Capital Partners, Good Energies, Appian Ventures, Access Venture Partners, Vista Ventures, RRE Ventures, TIAA-CREF, GDF Suez and SunPower.

Tuesday’s announcement also represents a “fairly seismic sort of change in our structure,” Tuck added. Rubicon specializes in taking ownership stakes in enterprise software-as-a-service companies serving particular industry verticals, and providing them the financial support to expand organically or through acquiring other companies.

Tendril’s turn to private equity for an exit stands in contrast to Opower, which first went public in 2014. Opower was acquired by Oracle for $532 million — about half its IPO price — in 2016.

“Over the last few months, we have, as an executive team, had a whole set of conversations about, do we want to find a home for this business inside another big company, or do we want to continue to run the business,” Tuck said.

"With the right kind of equity partner — one that’s big enough — we could sort of clean up and give our existing investors an exciting exit.” At the same time, “we hope to support what will be an M&A strategy, with lots of opportunities to roll in other businesses in this space," said Tuck.

Tendril got started in 2004 in the field of home energy management devices, landing multiple utility pilots to deploy and manage wirelessly connected in-home displays, smart thermostats and other hardware. But utility pilots failed to grow to larger scale, and the home energy device market has since become commoditized. After restructuring and laying off staff, the company moved away from hardware and into the underlying software to support a broader set of home energy management imperatives for utilities, such as data analytics and customer engagement

As of today, the Tendril platform is analyzing energy-related data on 123 million U.S. homes, and works with five of the top 10 U.S. utilities. “We’re having the best year in the company’s history for winning new deals,” Tuck said, with about 10 new contracts expected by year’s end.

Steve Carpenter, partner at Rubicon Technology Partners, described Tendril as the leader in a space that includes lots of would-be competitors, but relatively few with significant utility market share. In terms of the company's long run as an independent startup, “they demonstrated staying power, which is highly important — but they’ve also demonstrated the ability to scale with the largest utilities in the country," said Carpenter.

“Utilities like to play with startups and pilot neat things — but in terms of technology, they deploy to solve critical problems; they like to go with proven players,” he said. Carpenter speaks from experience, as the former CEO of Ventyx, a utility software company that successfully turned a string of acquisitions into a $1 billion sale to grid giant ABB in 2010. 

Carpenter declined to discuss the terms of the investment, beyond reiterating that Rubicon will be the majority shareholder. “We will be involved at a board level, and to a degree in an operational level. But Adrian and the team run strategy — we’re helping in mapping out the strategy, and how to invest in growth.” 

As for the timing of the investment, Carpenter said that after a decade of pilot projects and incremental growth, U.S. utilities are finally starting to put significant attention on the challenge of customer engagement. 

As for the kinds of companies that Tendril and Rubicon may be eyeing as acquisition targets: “Certainly I would say this customer engagement space is still highly fragmented in utilities, and there are potentially some interesting M&A opportunities out there,” said Carpenter.

Tuck noted that Tendril would likely look for companies that “do things we don’t do today in our core residential energy management space,” such as billing management, outage management and online marketplaces, as well as companies that offer opportunities beyond that sector.

“Today we only do residential. But our customers are constantly talking to us about small and medium[-sized] businesses, and commercial and industrial.”