How do we define the smart grid? Should the category include only those companies directly involved in the power grid? Or should we expand it to include energystorage building-side energy management, and/or software that has a role to play both for the grid and many other industries?

To accurately measure the health and growth of an industry that’s still in the process of defining itself requires a bit of flexibility. Certainly it's a principle required in understanding two very different figures for smart grid investments for the second quarter of 2012 that we've seen reported of late.

The first, released late last month by Mercom Capital Group, tallied up $50 million in VC investment in ten deals in the second quarter. That’s down from the first quarter’s $62 million, as reported by Mercom, and far below the $268 million invested in the second quarter of 2012.

But expand the pool, and the picture looks different, as a recent report from GTM Research indicates. This second-quarter VC investment tally added up to $339.8 million in twelve deals -- a big jump from the previous quarter’s tally of less than $100 million, though not as much as the $450-million-plus recorded for the second quarter of 2012.


Here’s a breakdown of the figures by industry, along with noteworthy companies that raised money:

Several of these companies hold a place in both the Mercom tally and the GTM Research tally -- and even this list doesn’t stick strictly to the narrowest definition of smart grid. Those include C3 Energy, the big data software firm, which raised $15 million; Enlighted, a networked lighting software and hardware startup, which raised $20 million; HVAC energy management startup Optimum Energy, which raised $12.2 million; and India-based Ecolibirium Energy, which raised $1.6 million.

The much larger total derived from the GTM Research list is driven by two key additions to Mercom’s list. The first comes from the inclusion of energy storage. The second quarter saw fuel cell maker Bloom Energy raise $130 million from investors including European utility E.ON, while water-based battery startup Aquion Energy raised $35 million and zinc-air battery startup Eos Energy raise $15 million.

The second comes from the inclusion of a big-data software vendor not specifically tied to smart grid, but which is working with one of the world’s top grid vendors. The company is Pivotal, a VMware and EMC spinoff that’s building a cloud-based data analytics platform, and the partner is General Electric, which invested $105 million in April to take a 10-percent stake in the San Francisco-based company.

While GE and Pivotal haven’t specifically named the smart grid as one of their targets, GE’s Grid IQ Insight platform is one of the core parts of the energy giant’s plans to create an “industrial internet,” or software that can link up everything from medical devices to jet engines. Thus, putting Pivotal on the list of smart-grid-related investments for the quarter represents a bit of prediction about where that investment is headed.

Even companies that seem clearly tied to smart grid may have potential markets that extend beyond the grid, as GTM Research smart grid analyst Ben Kellison noted. For instance, San Diego-based startup On-Ramp Wireless, which raised $13 million in a July Series C round, is squarely in the smart grid camp, with its wireless technology being used to connect smart meters by partner GE and network grid assets at utilities including San Diego Gas & Electric.

At the same time, a significant portion of its business is with oil and gas companies, Kellison noted, and the startup's most recent funding round was led by new investor Enbridge, the gas pipeline giant, and existing investor Energy Technology Ventures, which is a joint venture of GE Ventures, utility NRG Energy and oil company ConocoPhillips.