EnerNOC, a startup that provides a service designed to maximize the efficiency of energy use on the electrical grid, raised $2.75 million in additional financing from its venture capitalists, according to regulatory documents.
The startup has raised $16.3 million combined in its Series A and Series B financing rounds. The new money comes as part of a Series B that it started raising in January 2005. Investors include Foundation Capital, Draper Fisher Jurvetson, Braemar Energy Ventures and DFJ New England.
EnerNOC allows companies to sell their energy usage capabilities as demand-reducers. A manufacturing company, for example, could shut off heavy machinery it runs and get a reduction credit when the grid is already overloaded. Power companies and grid operators then save money by not having to rely on more-expensive means of producing power during peak demand times. Some of this savings is passed back to the manufacturing company.
Power conservation through improvements in the grid or with services such as Enernoc’s is the low-hanging fruit of the cleantech movement.
VCs are also attracted to energy management because there are plenty of potential buyers. In fact, the sector has already recorded an exit, albeit a small one by VC standards. Silicon Energy, a venture-backed startup that collected and analyzed data on energy usage—like Prenova and Fat Spaniel—was acquired for $71 million in cash in 2003 by energy metering company ITron (Nasdaq: ITRI). Silicon Energy had raised $44 million during the dot-com boom from firms such as Red Rock Ventures, Nth Power and Energy Ventures Group.