Venture Funding for BEMS Jumped to Nearly $1 Billion in 2014

February 4, 2015 By Karen Henry

Lux venture funding energy manageVenture funding for energy-efficient building technologies jumped to $944 million in 2014, with total funding during 2012 to 2014 higher than any three-year period over the last 15 years, according to a new report from Lux Research.

From 2012 to 2014, venture capitalists poured a record $2.64 billion into this segment, despite a decline in cleantech funding. In 2014, investors closed 111 deals related to energy systems in buildings—a 208 percent increase since 2008.

Lux evaluated the funding ecosystem for innovation in energy-efficient building technologies and made the following findings:

  • With $501 million, North America dominated investment in building energy technology with a 74 percent share of the total funding. Israel continued to be a node of high activity with $37 million in cumulative funding.
  • Building energy management systems (BEMS) and lighting tech developers, at 31 percent and 19 percent, respectively, have nearly maintained their share of funding from 2012 levels. On-site generation technologies experienced the largest change, increasing their share of funding from 21 percent in 2012 to 31 percent by 2014.
  • Building energy efficiency remains one of the few cleantech segments with a strong and diverse set of exit events for venture backed companies. For example, Opower’s IPO came in at $115 million, and Control4’s IPO came in at $500 million. Google acquired Nest for $3.2 billion, and Samsung acquired SmartThings for $200 million.
  • Early-stage companies are still largely neglected, and entrepreneurs are tapping new funding sources such as crowdfunding. LIFX, for example, ran a successful Kickstarter campaign for its networked LED bulb before securing $12 million from Sequoia Capital.

The report, “Funding Early-stage Innovation for Building Energy Systems,” is part of the Lux Research Efficient Building Systems Intelligence service.

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