The more you know about how you use energy, the better equipped you are to reduce your footprint. That’s the basic premise of energy management tools like Google’s PowerMeter, and increasingly, web-based tools for helping drivers achieve better fuel economy. To that end, Redwood Shores, Calif.-based startup GreenRoad, maker of a driver behavior tracking system, has just raised $15 million in a round led by DAG Ventures to help it accelerate its business with existing customers, add new features and enter new markets, including international ones.
GreenRoad’s system is designed for both fleet and consumer vehicles. Once GreenRoad installs sensors in the vehicles, an on-board device transmits data to an LED light display to provide immediate feedback to the driver. It also transmits that data via cellular network to GreenRoad servers to evaluate overall driving risk and skills and serve up the findings to users on a web-based portal. Drivers and fleet operators can find more detailed analysis online, and drivers with especially good behavior are recognized and can be rewarded by their companies. “When dealing with human behavior, there is a lot of psychology involved,” explained GreenRoad’s Eric Weiss, senior VP for worldwide marketing.
GreenRoad, which launched commercially in 2007, is among the fastest-growing startups in the space. It’s already serving more than 60 fleet customers in trucking, public transit, telecommunications and other sectors in North America, Israel and the UK. Among its biggest customers are telecom giant T-Mobile and the UK Ministry of Defense. The company uses a subscription-based model, charging less than $30 a month per vehicle, and Weiss says the system typically pays for itself in less than 90 days through lower fuels costs (7-11 percent reduction) and fewer accidents (49 percent reduction).
Other companies have caught on that fleet owners and consumers are interested in receiving more information about their driving behavior, meaning startups like GreenRoad could have a hard time carving out a niche as automakers integrate the tools into their vehicles. Honda developed a video game-like system called “Eco Assist” for its new Insight that’s meant to not only provide fuel-efficiency feedback, but also “actually help drivers to learn a better way of driving through instruments and electronic indications,” as chief engineer Yasunari Seki told us earlier this year.
Just this week, car maker Volvo unveiled a prototype of its CO2 “pedometer” software, which lets mobile-phone users track their daily travels and carbon footprint. In a pilot program in Göteborg, Sweden, participants reduced their carbon footprints by more than 30 percent, as they were encouraged to change their travel patterns and drive during low traffic hours or take more public transit. The car-sharing startup Zipcar has built an on-board device that allows fleet managers to remotely track their vehicles and use them more efficiently. (For more about the role of location-based services in the transition to plug-in vehicles, check out our Long View on the subject in GigaOM Pro, subscription required.)
GreenRoad has raised just under $40 million in venture funding to date, including this latest round. This trend of giving consumers more information has been especially present in the building management industry, with startups like EnergyHub and Tendril rolling out software and hardware to help homeowners and business track when and where they consume energy. In the last few years, VCs have been attracted to these companies in part because their technologies are more capital efficient and offer value to customers by helping them reduce consumption. But finding and securing distribution channels will continue to be a major point on which the success of these startups hinges.