Smart grid startup Silver Spring Networks said Tuesday that it raised $75 million in a new round of funding led by Kleiner Perkins Caufield & Byers.
The announcement is the latest in a surge of venture backing for companies offering smart grid technology, despite a painful credit crunch and an overall decline in venture funding across all sectors. The Cleantech Group said in a recent statement that companies in this sector raised a record $202 million in the third quarter of 2008 compared with less than $30 million in the previous 10 quarters.
The big takers in the last quarter were some of Silver Spring Networks’ fiercest competitors: $120 million for Arlington, Virginia-based Gridpoint, $23 million for Pittsburg, Pennsylvania’s, BPL Global, and $18.5 million for Eka Systems, of Germantown, Maryland.
These companies and their backers see their products as ushering in a new era of power distribution using IP networking technology. End users of power, like homes and businesses, will be in constant, two-way communication with electric utilities, making the grid more robust and efficient.
This so-called smart grid would make it easier to employ time-of-use rates and programs, like demand response, which help avoid blackouts. And like with the Internet, the open standards for this new grid would allow third-party vendors to compete over next-generation applications.
Supporters also believe the upgrade is necessary to accommodate the future needs of electric vehicles that will have to be recharged overnight.
Like other Kleiner companies, Silver Spring remains relatively guarded with its information. It previously raised at least $57.4 million in three rounds from Kleiner and other investors such as Foundation Capital, JVB Properties, and Northgate Capital, but the company would not confirm or deny this amount.
The 150-employee Silver Spring is working with major utilities including Florida Power & Light Company, Pacific Gas and Electric Company, and Oklahoman Gas & Electric.
As part of the new funding round, Kleiner Perkins partners John Doerr and Al Gore will join the Silver Spring Networks advisory board
Founded in 2002, Redwood City, California-based Silver Spring Networks is a 2008 Red Herring North America winner.