Brainbox AI has announced the acquisition of ABB’s multisite retail business and a US$20 million fundraising round led by the Government of Québec as a lead investor for US$10 million, alongside ABB, a returning lead investor and global partner.
This Research Note highlights the background to this announcement and the strategic rationale of both companies, based on Memoori’s analysis of the emerging strategic priorities of ABB’s Smart Buildings Division and our Smart Building Startups Landscape 2023 report.
ABB’s multi-site retail (MSR) energy management system integrator business, currently operating as ABB Cylon Retail Solutions, has an installed base of over 12,000 retail locations. It was taken over by ABB as part of the acquisition of Cylon Controls, a second-tier Irish building automation and energy management systems manufacturer in March 2020.
In February 2018, Cylon Energy closed a strategic acquisition to acquire the Teletrol multisite energy management business, a U.S.-based manufacturer of software and hardware that helps retail organizations reduce their energy consumption and lower
carbon emissions. At that time, Teletrol’s solutions controlled and managed HVAC, lighting, and other energy-using equipment in over 10,000 retail and commercial facilities across North America. The newly acquired entity was combined with the American Auto-Matrix National Accounts business and was known as Cylon Retail Solutions, continuing to be based out of Manchester, New Hampshire.
This exit indicates that ABB has reviewed the strategic fit of the MSR business and found that it no longer belongs in the core portfolio of their Smart Buildings Division. The Division made a similar decision about its Emergency Lighting business in February this year.
Mike Mustapha, President of the Smart Buildings Division at ABB Electrification concluded “By transferring the MSR business to BrainBox AI, customers can leverage artificial intelligence to achieve better energy efficiency and decarbonization. This fully aligns with our mission to pursue building decarbonization jointly with our strategic partners.”
With the objective of accelerating the decarbonization journey for retailers, BrainBox AI intends to integrate ABB’s MSR business with their AI optimization technology; the combined offering will help retailers reduce their greenhouse gas (GHG) emissions and utility costs without replacing their existing environmental management system (EMS).
BrainBox AI was founded in 2017 with the goal of redefining building automation through artificial intelligence. Headquartered in Montreal, Canada, BrainBox AI supports real estate clients in sectors including office buildings, airports, hotels, multi-residential, long-term care facilities, grocery stores and commercial retail. According to the company, their technology has been deployed in more than 100,000,000 square feet of commercial building space, in 70 cities worldwide.
With this acquisition, Brainbox AI is now solidifying its position in the retail market.
ABB has cultivated a strategic partnership with Brainbox AI over the last three years:
- In October 2021, ABB Technology Ventures was the lead investor in their $24 million Series A funding round. The strategic partnership allowed ABB’s Smart Buildings division to combine its existing portfolio of digital solutions, particularly the ABB Ability Building Ecosystem, with BrainBox AI’s autonomous AI technology.
- A global distribution agreement between BrainBox AI and ABB was announced in January 2022, to bring the AI-driven solution to ABB’s existing customer base.
With the support of ABB’s global partnership, Brainbox AI has acquired a significant installed base in the multisite retail sector, enabling the startup to gain further traction in the AI-powered HVAC optimization market.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.