Building management is one of the hottest markets in efficiency—and Serious already has 60 customers lined up. SEC forms reveal a $56 million round.
UPDATE: Serious Materials has quietly invaded the building management market.
The company — primarily known for green building products like eco-friendly drywall and insulating windows — has developed a software-as-a-service for monitoring and lowering energy consumption in commercial buildings. The nub of the software comes from an undisclosed acquisition. (Update: we wrote the story Friday and today learned the name of the company is Valence Energy.) Serious already has 60 customers and some of them have multiple buildings, said CEO Kevin Surace.
The offering consist of two products: Serious Energy Manager and Serious Insight. On average, the tools can curb energy consumption by 5 percent to 15 percent. One customer has curbed energy consumption by 18 percent in two months, he said. The software monitors everything — lights, air conditioners, heaters, etc. — but only directly controls a few appliances at the current juncture. Most of the savings come from pinpointing inefficiencies and fixing them. Over time, automation will be increased, and you could see how these tools could be plugged into demand response systems.
Like the building management tools from Scientific Conservation, EnerNoc and BuildingIQ, Serious’ software is compatible with the existing building management systems. Specifically, it plugs into systems marketed by Cisco and Echelon.
What are Serious’ advantages? The company has been one of the most successful in Silicon Valley in raising money, and had by 2009 pulled in $120 million from investors. Many potential customers, therefore, don’t regard Serious as a startup. An SEC search shows that in June the company filed a form with the agency that says it is in the midst of raising $56 million more with the help of Advanced Equities. So far, it has raised $19.8 million of that total.
“You walk into a meeting with a large building owner and the first thing they tell you is that they don’t want to work with a startup.”
We will have more when the official announcement comes on Monday.
Building management, particularly commercial building management, has been one of the strongest sectors in green technology for the last year or so. Having deals with 60 customers clearly makes Serious a prominent player.
Nonetheless, the shift will likely raise some eyebrows in Silicon Valley. Anytime you raise over $100 million, shift or add to the basic strategy and seek more money, the questions are inevitable. Serious came to prominence with EcoRock, a version of drywall that takes very little energy to make. Back in 2008, Serious was talking about building a commercial factory for EcoRock.
That still hasn’t happened, thanks to the economic collapse that occurred back then.
“The new building space is a disaster. This is not the time to build a $50 million factory,” he said. (More on the history in this story.)
The U.S. and other nations have also failed to pass cap and trade laws. EcoRock does not insulate or curb power consumption in buildings. It curbs the energy consumed by manufacturers. Without carbon taxation, the economic argument for EcoRock becomes more difficult.
The company’s window business, however, is thriving, he said. Serious, for instance, won the contract to install its insulating windows in the Empire State Building. “It is a great time to be in windows,” he said.
Software actually marks a return to home base for Surace and company founder Marc Porat. Both came out of General Magic, a 1990s company that tried to popularize the smart phone before its time. General Magic may have gone down in flames, but it certainly has an interesting alumni club. Pierre Omidyar, the eBay founder, came out of the company. So did Marco DeMiroz, the former Trinity Ventures partner who is now the CEO at Ractivity. Foundation Capital’s Warren Weiss worked at Next, a Steve Jobs company that got folded into Apple, and Foundation invested in Serious and Calstar products, another company founded by Porat. And building management has been a hole in Foundation’s otherwise solid smart grid portfolio. (EnerNoc, a Foundation company, just recently moved into buildings.)
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