Silver Spring Networks fills coffers, eyes IPO
Silver Spring Networks CEO Scott Lang raises more money to "shore up its balance sheet" as it accelerates the roll-out of a smart-grid trial with Pacific Gas & Electric.
NEW YORK--Smart-grid upstart Silver Spring Networks closed a round of funding on March 1, which the company hopes will be its last before going public, according to Chief Executive Scott Lang.
Silver Spring Networks raised an additional 20 percent to theit secured last year, or another $15 million, Lang said during a presentation at the Jefferies Clean Technology Conference on Tuesday here.
After his talk, Lang said the company intends to go public through an initial public offering, although he did not say when.
"I hope (this round of financing) is the last one. We did it to shore up the balance sheet," Lang said during his presentation. "Break-even should be pretty soon based on (sales) volume."
Silver Spring is one of the most established smart-grid companies in the burgeoning field. Founded in 2002, the company has a few large contracts with U.S. utilities, notably Pacific Gas & Electric, Florida Power and Light, and Pepco. It is negotiating deals with other utilities that could connect between 10 million and 12 million homes, Lang said.
The company makes software and chips to create a network that brokers communications between utilities and customers. For example, its products can be embedded in a smart meter so that it can send usage information to utilties in regular intervals and utilities can send electricity rate information to customers in real time.
From a technology point of view, Silicon Valley-based Silver Spring Networks is well known for its decision to use the Internet Protocol standard as the basis for its products.
"I believe that ultimately the trend is toward IP. It creates an open playing field," Lang said. "If the industry doesn't standardize on this, what are we going to standardize on?"
Speedy progress in California
Last July, Pacific Gas & Electric as its supplier for a large-scale smart-grid project worth about $200 million, according to Lang.
He predicted that the roll-out of smart-grid gear to 5 million people will take two and a half years, rather than the five years as originally projected.
"The ramp-up is unbelievable. We are deploying over 100,000 homes a month and that will probably double next quarter," he said.
The massive government stimulus plan set aside billions of dollars for modernizing the grid, which includes smart-grid projects.
Lang said that Silver Spring Networks won't benefit directly from government incentives, but it will speed up existing projects. Its Florida Power & Light project is designed to bring smart-grid networking to 4.5 million people over the next four years, which could be shortened from the stimulus money, he said.