Swarm logic smart grid startup raises $5.5M

A startup that has developed “swarm logic” software, which can manage appliances in buildings and electric cars like a swarm of bees, has raised a Series A round of $5.5 million in financing from investors. Regen Energy, based in Toronto, plans to use the money to expand into the U.S., and the company has also announced its first U.S. office in San Diego.

Regen Energy makes a wireless node that when coupled with its software can reduce the energy consumption of commercial building systems like air conditioners and lighting. Its swarm logic software is based on the idea that each individual node makes a decision based on the actions of the group. HVAC systems and lights in buildings each get a node installed, which can control the appliances in response to demand response signals from utilities or control systems from business managers in an efficient and uniform way.

The startup is also interested in using the swarm logic software to help utilities intelligently manage electric cars. If there is an influx of electric cars plugging into the grid in certain regions, utilities could be looking for ways to control their rate of charge as a group.

Regen Energy has been eying a move to connect with California utilities for a while, and Regen says today that it is also focused on the Northeast U.S. Over two years ago CEO and founder Mark Kerbel told me that the startup was in testing-related talks with several California utilities. Back in 2005 Kerbel developed the algorithm to manage the wireless nodes based on swarm logic.

Heating and cooling in buildings and lighting are easier markets for the company than EVs, given the nascent stage of the electric vehicle market, and Regen Energy already has demand-response utility clients in Toronto like Toronto Hydro. The company also launched an open-source version of its demand-response software based on OpenADR (the open-source standard for demand-response signals) this summer.

Regen Energy raised the funds from NGEN Partners and BDC Venture Capital. Greentech investors increasingly seem to be interested in investing in green startups that are developing capital-efficient ways to use IT and software for energy efficiency.