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Silver Spring Networks snags $100M in financing [San Jose Mercury News, Calif.] 12/16 09:18 AM



Dec. 16--Silver Spring Networks, a Redwood City-based startup with ambitions of becoming a global leader in "smart grid" innovation, announced Tuesday it has secured another $100 million in financing.

The company said it will use the money to develop new applications for the smart grid, which refers to technology that will improve the distribution of electricity, and to add jobs.

Utility system upgrades have been spotlighted as a priority by the Obama administration, with $4.5 billion set aside in the Recovery and Reinvestment Act to create a more-efficient power grid that reduces carbon emissions.

"We have a terrific opportunity to accelerate the development and deployment of next generation smart grid initiatives," Warren Jenson, Silver Spring's chief financial officer, said in a press release. "At a time when world leaders have gathered in Copenhagen, we're honored to be partnering with some of the most progressive utilities in the world to address energy-efficiency by building out the smart grid."


Silver Spring boasts that its hardware and software tools "empower" customers by allowing them to monitor and manage their energy consumption. Silver Spring's Smart Energy Platform allows Internet-based two-way communication between utilities, including PG&E (PCG:$45.14,00$-0.17,00-0.38%) , and devices on the power grid.

SmartMeters offered by PG&E (PCG:$45.14,00$-0.17,00-0.38%) have recently stirred controversy among some customers. The utility is in the process of deploying SmartMeters to 10 million
residential and business customers.

Some PG&E (PCG:$45.14,00$-0.17,00-0.38%) customers have blamed SmartMeters, which are made by General Electric (GE:$15.75,00$-0.20,00-1.25%) and Landis + Gyr, for increasing their electricity costs, inspiring one class-action lawsuit filed by a user in the Central Valley. But PG&E (PCG:$45.14,00$-0.17,00-0.38%) insists the new meters are working properly and that higher bills simply coincided with price hikes and greater energy use.

Eric Dresselhuys, a senior vice president at Silver Spring Networks who has helped PG&E (PCG:$45.14,00$-0.17,00-0.38%) address the controversy, said a third-party verification process established by the Public Utilities Commission will help address the questions.

The $100 million in new funding was provided by new institutional investors and follow-on investments from Foundation Capital, Kleiner Perkins Caufield & Byers, Northgate Capital and Google Ventures, which had already invested $150 million in the company.

The funding fuels speculation that Silver Spring could be the first smart-grid startup to seek a Wall Street debut in 2010, when several other clean-tech startups are expected to make initial public stock offerings. Others speculate that the company may be on the shopping list of Cisco (CSCO:$23.48,00$-0.36,00-1.51%) , which is pushing aggressively in the smart-grid area.


Contact Scott Duke Harris at [e-mail] or 408-920-2704.

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Copyright (c) 2009, San Jose Mercury News, Calif.



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