VC funding in the Smart Grid sector decreased significantly in Q1 2011 with $76 million raised in 13 deals. In comparison, VC funding in Q4 of 2010 was $188 million in 18 deals. “After a 2010 banner year for Smart Grid, it remains to be seen if the first quarter of 2011 was an anomaly or a trend,” commented Raj Prabhu, Managing Partner at Mercom Capital Group. The first quarter of last year (2010) also started slow with only $89 million raised by VCs, then picked up significantly in later quarters.

The top five transactions accounted for almost 82 percent of total transactions, led by GridPoint with $24 million, Control4 with $15 million, Viridity Energy with $14 million, Powerit Solutions with $5 million and UTILICASE with $5 million.

Twenty-one different VCs participated in the funding rounds. The USA accounted for most, with eight out of 13 total deals.

Merger and acquisition (M&A) activity in the Smart Grid sector amounted to $300 million in nine deals in Q1 of 2011. The most significant M&A transaction was Schneider Electric’s acquisition of Summit Energy for $268 million.

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