TODAY’S STUDY: THE SMART GRID BUSINESS, Q3 2011

Smart Grid Funding and M&A, Q3 2011 Report; Funding and merger & acquisition activity for the Smart Grid sector
October 2011 (Mercom Capital Group)

Introduction

Funding and M&A activity in Q3 2011 for the Smart Grid sector was anemic. Funding activity so far this year has continued to be weak compared to 2010.

VC funding in Q3 2011 came to $97 million in 10 deals, which was slightly lower than the $104 million in 15 deals in Q2 2011.

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Current economic condition and uncertainty along with a lack of clear direction in the Smart Grid sector is plainly evident based on the depressed funding activity so far this year.

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VC Funding

VC funding in Q3 2011 came to $97 million in 10 transactions.

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In comparison, VC funding in Q2 was $104 million in 15 transactions.

Thirty-one different investors were involved in these funding rounds.

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Smart Grid Communications led VC funding in terms of technology with $47 million in four deals. Year-to-date Smart Grid Communications companies have received the most funding with $135 million in 13 deals.

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Top VC funding deals in Q3 were: $16 million raised by SynapSense in Series ‘C’, $15 million raised by EnergyHub in Series ‘B’ and $14 million raised by Power Assure in Series ‘B’ round.

Most VC investments recorded in Q3 of 2011 were based in the United States.

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Debt and Other Funding and Mergers and Acquisitions

Merger and Acquisitions activity in Q3 2011 was very weak with transactions amounting to only $30 million in five deals. Only one deal disclosed transaction details. In comparison, Q2 2011 was a huge quarter for M&A where nine deals resulted in $4.3 billion in M&A transactions.

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