With blackouts rolling across California and the world’s aging power grids handling ever more demand for electricity, the utility industry is starting to rely heavily on monitoring devices to help them track the overall health and performance of their power distribution systems.
Among the first companies to offer just such a device for utility providers worldwide, Serveron Corp. last week garnered $16.5 million worth of fresh venture capital from some big-name power industry investors.
Nth Power Technologies of San Francisco led the Series B deal, investing alongside Ventures West, Perseus LLC, Cascadia Pacific Management and Oregon Life Sciences LLC and ECT Merchant Investments Corp., an affiliate of Enron North America.
Although the round was slightly oversubscribed, Serveron’s management team spent an entire year in the fund-raising trenches due to an overall belt-tightening in the VC community, said Bob Patterson, a company spokesman.
Nonetheless, Serveron’s investors seemed bullish on the company, which caters to utility providers looking to improve the overall quality and functionality of their power grids. Serveron’s flagship offering is an Internet-enabled, real-time monitoring device designed to alert utility providers of problems within the grid, improving overall reliability and cutting down on power outages to consumers’ homes.
“The energy problems we face now stem from two things,” said Nancy Floyd, a co-founder and managing director with Nth Power. “In California, we have a supply and demand imbalance, there’s more demand than supply. In California, New York and other areas, we have bottlenecks that have to do with the transmission and distribution system. We’re talking about a grid that carries power that is 50 years old and is based on 100-year-old science that is in tremendous need of upgrades.”
Serveron focuses on that system, and provides real-time monitoring directly at the power substations, which reduce the voltage of power so it can be transferred into homes. If there is a problem at that critical juncture, it results in outages and other power-related problems that cost utilities millions of dollars to remedy, Floyd explained. Serveron’s product helps reduce those problems and, as a result, the overall cost of delivering power to consumers.
What is more, Serveron is coming on the scene just as utilities are beginning to sense the inherent need for system upgrades, a move which Floyd sees as a boon for the company.
“Four years ago [when Serveron was founded], the folks responsible for transmission and distribution systems weren’t really focused on improvements and upgrades to the systems,” she said. “There was no sense of urgency, and now there is that sense, and the utilities are prepared to make that investment.”
She added that even California’s cash-strapped utilities had expressed an interest in Serveron’s products as they attempt to improve the reliability of their power grids. The company’s growing customer roster includes TXU (formerly known as Texas Utilities) and the New York Power Authority.
Currently operating out of a facility based in Bend, Ore., Serveron plans to use its latest capital infusion to establish its corporate headquarters in the Beaverton-Hillsboro area of Oregon within the next few weeks. Additionally, the company plans to expand its staff to 100 from 20 employees within the next 12 to 15 months.
Contact Robyn Kurdek at Robyn.Kurdek@tfn.com