One of the early problems with the cleantech sector was that many of the big public companies that offered exits for innovative cleantech startups hadn’t yet matured into aggressive acquirers. Oil companies, car companies and power companies didn’t necessarily have the culture of M&A. But I think we can safely say the power gear firms have finally woken up to delivering innovation by purchasing it.
A lot of that acquisition appetite has been around the smart grid and using IT to manage energy more efficiently, but some of it has been around renewable energy, too. ABB, Schneider Electric, GE (s GE), and, to a lesser extent, Siemens (s si), have all now been actively buying up startups as well as big firms that are developing next-generation energy products, and some have been using their VC arms to find the leading startups.
This month, Schneider Electric acquired energy procurement and management company Summit Energy for $268 million, following in the footsteps of its joint acquisition (with Alstom) of Areva’s power grid transmission and distribution business. Summit manages $20 billion in annual power purchases for some 650 corporate clients, making it a power broker in its own right. If Schneider succeeds in integrating that market power with its grid and building power control technologies, it could add a whole new level of complexity — and potential — to the concept of the smart grid.
ABB (s abb) has bought three smart grid software companies over the past year, including the massive, $1 billion-plus, Ventyx acquisition, along with Insert Key Solutions, and Obvient. ABB also recently acquired a 35-percent stake in Novatec Solar, a German company that makes solar concentrating gear.
ABB has a young venture arm that it uses to inject some Silicon Valley spirit into the power grid player, as Andy Tang, ABB Venture’s managing director recently explained to me. (Tang will be speaking at Green:Net 2011 on April 21 in San Francisco). Tang formerly was the founding managing director at DFJ DragonFund, and was a venture partner with Infineon Ventures. ABB has invested in electric car charging startup Ecotality (s ECTY), smart grid network player Trilliant, and data center efficiency company PowerAssure.
GE has long invested in startups and has been acquiring into the smart grid sector as of late. GE bought smart meter tech startup Remote Energy Monitoring earlier this year, smart grid network testing and management company Opal Software late last year, and plans to spend $520 million on Lineage Power, a provider of gear for data center and telecom power conversion.
Some of GE’s investments include smart grid software company Grid Net, home energy companies iControl and Tendril, energy storage company A123 Systems (s aone), and electric car maker Think Global. GE Energy Financial Services Managing Director of Venture Capital, Kevin Skillern, will be speaking at Green:Net, as will Grid Net’s EVP and Chief Strategy Officer Andres Carvallo.
While power gear companies might not have the acquisition appetite of their peers in the IT and web worlds, they’re slowly ramping up the hunt for innovation from entrepreneurs and innovative startups. For a complete list of smart grid acquisitions, check out our table here.
Image courtesy of Rennett Stowe.