D.C. smart grid startup SparkMeter has raised $12 million in a Series A financing round, the company said Tuesday.
Boston’s Clean Energy Ventures and Breakthrough Energy Ventures, Bill Gates’ $1 billion fund, led the raise, which also included Amsterdam-based Goodwell Investments; Lagos, Nigeria-based Alitheia Capital; and Paris-based Total Energy Ventures. Prior to the latest funding, the company’s existing investor roster entailed Lateral Capital, the Schmidt Family Foundation, Incite Capital, Powerhouse Fund, Shell Foundation, Factor[e] and The E8 Fund.
The new capital, which comes on top of $4 million raised previously, positions the company to launch a new service that helps digitize and improve operations for electric utilities. The service, called SparkMeter Digital Solutions, uses data analytics and technology to help providers in underserved communities strengthen their financial and environmental sustainability and increase grid capacity. The 7-year-old company focuses on emerging markets in Africa, Asia and South America — where it says a collective 2.1 billion people lack reliable access to electricity.
Schnitzer declined to disclose revenue, but the company says it’s sold more than 100,000 smart meters in more than two dozen countries. In addition to its metering equipment and software, the company’s grid management offering also tailors things like flexible billing, automated payments, customer communications and remote monitoring and control to utilities primarily in developing nations.
“Our smart grid solution was built specifically for the evolving challenges faced by utilities across the world, including challenges around connectivity, bandwidth and system reliability,” said Dan Schnitzer, co-founder and CEO of SparkMeter. “Our focus on this segment helps to bridge the gap between more advanced metering technology and the requirements of utilities in emerging markets working to scale.”
The company — now with 25 employees across the U.S., Kenya and Nigeria — takes its fresh funding forward with an eye toward expanding into larger distribution utilities, Schnitzer said. That move would give the business access to a larger customer base, “thus granting reliable energy access to more people throughout SparkMeter’s target markets,” Schnitzer said.
“This transition also includes a step away from being exclusively a provider that focuses on metering, billing and payments, into a much broader offering of consultative managed services and digital solutions,” he said. The idea, he added, “is helping utilities convert a wealth of system data from smart meters into tangible impacts on financial margins, system reliability and quality of energy access through digital transformation.”
The idea stemmed from a nonprofit that Schnitzer founded in 2009. Called EarthSpark International, which still stands today and shares space with SparkMeter at 1616 H St. NW, that organization received grants and funding to build microgrids in Haiti. After building a privately operated microgrid that now serves 2,000 people in a small town called Les Anglais, EarthSpark spun off the Haiti-based Enèji Pwòp SA and D.C.-based SparkMeter in 2013, the latter with three other co-founders — Chief Operating Officer Arthur Jacquiau-Chamski, Principal Engineer Tristan Escalada and Nai Phasay, vice president of hardware engineering — to further develop microgrid hardware and software.
While it’s a growing market — minigrids will require an estimated $128 billion in additional investments, according to a recent report by BloombergNEF, Mini-Grids Partnership and Sustainable Energy For All — smaller startups are having to contend with global companies hoping to tap into that demand as well, including the likes of EDF of France, Enel Group of Italy, Iberdrola of Spain and Shell of the Netherlands.
