VentureBeat

Two days ago it was Optimal Technologies with $25 million toward software for electrical grids; today, it’s SmartSynch with $20 million for wirelessly communicating meters. I haven’t gone back and done an official count, but with well over half a dozen large fundings in the past few months, the efficiency-focused smart grid space looks to have emerged as the hot cleantech venture space du jour.

“Smart grid” is a catch-all term for a number of technologies that aim at measuring and controlling the process of sending electricity from generation plants to homes and businesses. The former area is SmartSynch’s specialty. The company’s meters are capable of hooking up to networks via any of several wireless standards like WiFi, CDMA or ZigBee to divulge the data they collect.

Fundings may be flooding in right now, but SmartSynch is no newbie. Founded in 2000, the company has taken $80 million to date. It has also deployed about 125,000 meters, and grew 125 percent last year. Meters have turned out to be a particularly bright area to innovate in, because they’re advantageous to several constituencies.

The advantage comes in giving more information to both customers and utilities. Instead of seeing electricity usage as one big block on a bill received once a month, customers can see usage on an almost moment-to-moment basis. Following the old adage “knowledge is power”, that information gives both parties the ability to plan out usage based on when electricity is most available, saving utilities power and both sides money.

SmartSynch’s chief technology officer, Henry Jones, says his firm’s communication technology, which is installed in meters made by Elster, General Electric and Itron, has brought in about $15 billion in additional revenues for utilities so far. That’s good news for the company, because it’s the utilities that buy and install the meters. Their customers include some rather large ones, including Socal Edison, Florida Power & Light, and Canada’s Hydro One.

Other firms, including Silver Spring Networks, have fairly similar technology and strategies. However, Jones claims that’s not a problem: Each firm has its own approach to communicating data, he says, and each approach is useful for different applications, leaving a wide market chunk for each competitor.

But that’s not much use to any new startups who might want to muscle in on the action. After all, several of these firms have years of lead time. So what are the next big opportunities? Jones thinks the next step is getting meters to report not just back to the utility, but also directly into the home or business they’re installed in; he says SmartSynch is preparing to release several meters that do just that.

Hooking into the gas and water meters is also a good opportunity, along with integrating the data from all three major utility streams. On a more granular level, there’s space for companies that measure and control electricity usage by specific devices, like air conditioners and lighting. And of course, there’s opportunity to be had not just in communication and control, but in helping to decipher all the information that’s being generated.

For the present moment, the wave of smart grid startups shows no sign of slackening. Several more announcements that I’m aware of are on their way in coming weeks, and a few in front usually means a pack behind.

The $25 million SmartSynch received was the Jackson, Miss., company’s fourth funding. Credit Suisse, a new investor, led the round, along with another newcomer, Southern Farm Bureau Life Insurance (perhaps they’ll tack “venture partners” onto that name at some point). A heap of previous investors also came along for the ride: Batelle Ventures, Beacon Group, Endeavor Capital Management, GulfSouth Capital, Battelle’s affiliate Innovation Valley Partners, Kinetic Ventures, OPG Ventures and Siemens Venture Capital.

APX, a Silicon Valley company that certifies carbon and emissions offset certificates, and which is well-placed to support carbon-trading markets when they emerge, has gotten backing from Goldman Sachs in a $14 million investment, VentureBeat has learned.

Carbon trading is a growing business that could someday come to resemble the world’s largest financial markets.

Today’s emissions markets are generally small and fragmented. In regional U.S. energy markets, utilities are already required to buy electricity from alternative energy sources like geothermal, solar or wind. To prove their use of alternative energy, they’re required to file a certificate tracking their acquisition of the energy units. So this is the beginning of a “transfer” regime that could grow into more.

Meantime, carbon offsetting markets that corporations buy credits from are currently voluntary, but in anticipation of future government regulation, they often require similar certifying schemes. However, the source of offsets can vary widely, from alternative energy generation to tree planting projects.

APX acts as part of the intermediary chain between buyer and seller, doing the work of tracking serial numbers on these certificates and the accounts they go into. It’s not glamorous, but having an efficient, scalable back-end will be one of the requirements for building a multi-billion dollar market, as emissions trading may well become.

Such details aren’t always automatically addressed as part of creating a new system. In fact, when California was looking at creating a regional registry in 2006, APX was the only qualified bidder, according to Dr. Reiner Musier, the company’s chief marketing officer.

As today’s small, scattered emissions trading markets grow, they may come to resemble the complex business and regulatory ecosystems of the futures and equities markets, which include various behind-the-scenes businesses similar to APX. Another indicator that some very serious businesses are becoming involved is one of the new investors in the company’s latest funding: Goldman Sachs, a heavyweight in the New York financial markets.

The funding we’re reporting was previously announced by APX as an undisclosed round. It appears to have been about $20 million, although the company may have only raised about $14 million to date (it declined to comment on the amount). Besides Goldman Sachs, previous investors Bechtel Enterprises Holdings, Kinetic Ventures, ONSET Ventures, Technology Partners and Woodside Fund also took part.

APX, which is based in Santa Clara, Calif., currently handles tracking for five regional markets in the United States, as well as the Gold Standard, an international carbon trading standard. It makes a small set fee off each certificate that’s traded, and thus its success is relative to the volume of the markets. In the interest of helping these markets develop, the firm also advises newly forming markets on how to set themselves up.