Venture capital transactions in smart grid double in 2013

Amrita Nair Ghaswalla Mumbai | Updated on March 12, 2018 Published on August 02, 2013

Smart grid VC funding in Q2 2013 totalled $50 m across 10 deals.

Though venture capital (VC) funding in smart grid continues to remain lacklustre in 2013, transactions have doubled this year, according to a report by the Mercom Capital Group.

The $183-million acquisition of smart grid and automation solutions provider ZIV Group by Crompton Greaves was the only merger and acquisition transaction in the nation’s smart grid sector in 2012. This year, however, has seen two transactions.

A smart grid is one that can switch from coal to solar, depending on availability. The grid is ‘smart’ enough to make intelligent choices on where to draw the energy from.

The Mercom report has revealed that smart grid VC funding in Q2 2013 totalled $50 million (Rs 295 crore) across 10 deals. Except for one quarter (Q3 2012), VC funding has been stuck in the $50-$70 million range with 9-12 deals for almost two years, the study showed.

“Even though the number of deals was consistent compared to the last few quarters, this is one of the lowest funding quarters in the last four years,” said Mercom Group CEO Raj Prabhu.

During the quarter, there were two Indian VC funding transactions — Ecolibrium Energy received $1.6 million (Rs 9.4 crore) from Infuse Ventures and International Finance Corporation, and Wifinity, a provider of wireless-based energy management, security and smart grid solutions, received angel funding from Rajkumar Elango and Sanjai Vohra.

Though the smart grid business is in its infancy, strategic acquisitions are regarded as critical to grow and increase market share.

In 2012, M&A activity increased by a whopping 84 per cent.

In the space of six years, M&As have grown from $134 million in 2007 to $10.6 billion in 2011, to a near-doubling in the value of deals at $19.5 billion in 2012. Both the growth and scale indicate that the supply side is gearing up to meet the requirements of new technology.

Bolstered by a potential global demand of $2 trillion for smart grid technology over the next 20 years, the smart grid sector is said to be booming.


Published on August 02, 2013
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