Home automation company Control4 is already predicting annual revenue of around $70 million from its wireless home entertainment, security and lighting management products. Now the company has set its sights on one of the buzziest areas in cleantech: smart meters. On Wednesday morning, Control4 will announce that it has raised $17.3 million from new and existing investors, largely to launch a division to connect its wireless home products with smart meters, smart grid services and utilities.
While the 4-year-old company has been selling its wireless home products through resellers and home integrators, now it will start selling its energy management products through utilities, too. It’s a good time to get into the smart meter biz. Many utilities are starting to do deals with energy management software and hardware companies looking to both test and partner with consumer-facing energy management tool makers (examples of 10 energy management options here).
Control4’s new funding (which bring its total funds raised to “over $50 million,” says Control4 COO and President Glen Mella), come from new investors Best Buy Capital, Mercato Partners and University Venture Fund, as well as existing investors Foundation Capital, Frazier Technology Ventures, Thomas Weisel Venture Partners and vSpring Capital. The inclusion of Best Buy Capital, the venture arm of consumer electronics retailer Best Buy, is notable, given energy management tools have not become popular yet with consumers. Control4 hasn’t been selling directly to consumers, but if it has those ambitions, working with Best Buy Capital might be a good way to get there. (For a deeper look at consumer attitudes toward home energy management, see our research briefing on the topic in GigaOM Pro, subscription only.)
While there has been a rush of companies building energy management software and hardware — like Google, Microsoft, eMeter, GE and Tendril — Control4 approaches the market with a bit of a different perspective than those big software developers or newer energy management startups. The company has several years under its belt of building compelling consumer-facing home electronics that have to look good and be simple to use.
But where Control4 lacks is in utility and old skool energy industry experience. Hence it needs over $17 million to move into that space and it plans to develop a completely new division to be based in Santa Clara, Calif. But one thing utilities like is working with bigger, more established companies. While utilities may be doing pilots with some of the very young firms, ultimately, they want to partner with a company with as much traction as possible. That’s where Control4 could have an advantage.