VentureBeat

Part of the growing trend for nearly every electronic device to be able to communicate with others, smart grid and advanced metering startup Trilliant has taken $40 million in its first official venture funding.

Trilliant, like competitors Ambient, Silver Spring Networks, SmartSynch and others, makes wireless communication devices for utility meters. When enough are present in an area, they can form a mesh network capable of communicating moment-to-moment use information back to utilities, and to the homes and businesses they’re installed within. (Some can also communicate via hardwired connections.)

The company is one of the oldest to try to tackle the problem. I covered it in more depth in June. The problem with looking at the field is that, at first glance, all the contenders seem to be pretty much identical; broadly speaking, each is approaching the same problem, that of trying to get more information about usage to consumers and utilities, in more or less the same way.

One of the new investors in Trilliant, MissionPoint Capital’s Mark Lewis, says that the key difference is in the quality of the technology being deployed. While the concept of a mesh network is simple — add together a bunch of low-power nodes to create a linked network that can pass information end-to-end — they’re not always easy to scale up, in practice.

Add in ideas that haven’t yet hit the market, like combining electrical metering info with the same from water and gas, and giving consumers the ability to remotely control devices and usage patterns, and it becomes even more difficult to make truly comprehensive chips (which are installed in existing meters by bigger manufacturers). Atop it all, the equipment has to be durable and long-lived, lasting for decades.

At the moment it’s difficult to tell who will come out on top, but Lewis says the goal is just to capture a significant segment of the market, as well as expand overseas. In North America, utilities are continuing to test equipment by multiple manufacturers, with few having settled on any one solution yet.

The $40 million investment in Trilliant was led by MissionPoint and Zouk Ventures, a European investment firm. Trilliant had previously taken strategic and internal funding. Only Silver Spring has taken more in one shot, with $59.3 million total split between an extended third round raised this year and last.

We’ve reported on plenty of companies lately in the booming smart grid space, which helps track and optimize the electricity flowing from utilities to consumers. Here’s one more to add to the roster: Trilliant, a grey-bearded startup based in Redwood City, Calif.

Unlike most of its peers, Trilliant has plenty of history — about 22 years worth. That head start has helped give the 450-employee company time to build a significant lead. Today, it’s announcing 750,000 deployments, more than most of its competitors (SmartSynch, for one, recently boasted 125,000 deployments to me).

Trilliant is also ahead of the game in the number of devices it actually builds. Although saying “smart grid” can refer to a number of technologies, from superconductors to software, the bulk of startups seem to be working in Trilliant’s space, making intelligent metering devices that utilities install at customer sites, in order to better plan and coordinate electricity generation.

The meters themselves are made by big companies like General Electric and Itron. For the startups, there are components like communication chips, which are placed inside meters. The chips then help track energy consumption and give utilities a running report of usage, transmitted across a mesh network made up of all the meters. From that starting point, additional services can be added on.

The idea is to eventually synchronize customers and utilities to save both money. Because rates for electricity vary according to the season and time of day, customers that know when they’re being charged high rates can scale back their usage. In turn, lower usage can help the utilities avoid building expensive new generators or running old, inefficient ones.

Ideas for communicating this information to businesses and households vary, and most startups are still in the development stage. Among the devices Trilliant already has on hand are a light meter, placed where it can be easily seen by consumers, that shows whether rates for power are low or high; a thermostat connection that can automatically adjust heating or cooling according to prices; and integration for gas and water meters. With the devices already created, Trilliant has its eye on software next

What does it all mean, to consumers? Not much, for right now. The business case right now supports new meter installation, says Trilliant founder and CEO Bill Vogel, putting utilities in control. There’s a less clear case for trying to enlist consumers, who are used to just getting a monthly bill, whether it’s someone in a studio apartment paying $50 a month or a big business racking up hundreds of thousands of dollars yearly.

However, Vogel says there’s a shift happening in politics, driven by consumers concerned about global warming and other environmental issues. Consumer concern will eventually translate to political pressure on utilities to install devices like thermostat controls. Vogel says most utilities are ready and willing, but can’t justify the expense of installing unproven devices without a political push. “Like any good protector of assets, they’d like the public and the policy drivers to move first,” he says.

When that happens, several smart grid companies will likely take flight, generating big returns for their investors. Hence the flurry of fundings lately: $10.7 million for Ambient, $12.5 million for EMeter, $15 million for GridPoint, $17.4 million for Silver Spring Networks, and $20 million for SmartSynch. (Trilliant, for its part, has eschewed venture backing for the help of an unnamed strategic investor.)

Some movement has already been seen. Trilliant’s clients include Louisville Gas & Electric, and Hydro One, which an Ontario, Canada utility that has been especially aggressive at experimenting with new technology. And recently, both Duke Energy and Oncor announced big pushes to build smart grids in their territories. But, with the total market estimated at $45 billion, there’s a long way yet to go.