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This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

This article provides a snapshot of some of the notable investments in the smart buildings space in the third quarter of 2019. As part of our ongoing deal tracking service, Memoori recorded 61 funding rounds amounting to around $2 billion in disclosed deal values. In comparison, 74 rounds were recorded in Q2-2019, amounting to $745 million in disclosed deals. Despite a drop in the number of funding rounds, there was a 177% increase in dollar values in Q3, which can be attributed to significant investments by US private equity firms, Chinese conglomerates and several IPOs.

IoT Investments Focus on Diverse Approaches to Energy Efficiency Optimization & Decarbonization

Two diverse approaches to energy efficiency optimization and decarbonization, through leveraging IoT in buildings, gained significant backing this quarter.

A US and India based startup, 75F attracted some prestigious investors in September, with Bill Gates, Jeff Bezos, Jack Ma, Richard Branson and Michael Bloomberg participating in a Series A round of $18 million co-led by Breakthrough Energy Ventures and the Oil and Gas Climate Initiative.

Deepinder Singh, CEO of 75F, was interviewed in December 2016 by Memoori for the first edition of our Startups and Their Impact on Smart Buildings Report and was selected as one of the 15 Startups to Watch in 2017. We are pleased that our early assessment of 75F has now been endorsed by an incredible group of investors. This is the largest investment to date in the energy-efficiency technology category in the Asia-Pacific region. It is also the first building-focused investment for the Oil and Gas Climate Initiative, who hope their investment will help reduce emissions from buildings, which account for 40% of total energy consumption.

75F offers a vertically-integrated smart building solution that includes wireless sensors, equipment controllers and cloud-based software, delivering predictive, proactive building automation right out-of-the-box. The simple-to-install smart building automation technology leverages machine learning to make facilities more comfortable while cutting energy use by 30% to 50%.

Minibems, a Scottish startup, offers an Internet of Things (IoT) and smart heating solution designed to decarbonise the UK heat network market.This approach delivers a heat network management service, leveraging real-time online monitoring and controls to provide energy efficiency gains, remote diagnosis and repairs, as well as metering and billing services.

The company has been active in the social housing market in Scotland, where it is tackling fuel poverty, by helping lower-income families stay warm at a lower cost. Minibems raised its latest investment round from Amsterdam-based SET Ventures and early-stage investor, Ascension Ventures in September 2019.

More funding for Chinese AI Unicorn Terminus Technologies

Terminus Technologies offers a range of smart building technologies, leveraging AI and IoT, providing local government and enterprises with solutions for urban management, building energy management, fire protection systems and public security.

In August 2019, the company closed a Series C round of $283 million, bringing total funding to over $528 million. The deal was led by existing majority investor, the Chinese state-owned conglomerate, China Everbright Group, with participation by E-commerce giant JD.com, voice recognition technology player iFlytek, and real estate conglomerate, Wanda Group.

Residential and Commercial Energy Storage & Microgrids Attract Corporate Buyers

3 years after its creation, Lancey Energy Storage, the French inventor of an electric radiator that embeds a battery, announced an 8 million Euro fundraising campaign backed by ENGIE New Ventures and Yves Chabot, President of Stelpro, a Canadian leader in the manufacture and marketing of electric radiators.

The start-up has created an intelligent and connected electric radiator, incorporating a lithium-ion battery, to store energy when it is less expensive or carbon-free and to feed it back into the domestic network, to supply all the electrical appliances of the household and subsequently reduce the electricity bill. The company installed nearly 800 radiators in 2019 and hopes to use this fundraising opportunity to commercialise its radiator to the end consumer in 2020.

Two global energy firms, Shell and Sumitomo have invested an undisclosed amount in New York-based LO3 Energy, whose Exergy platform tracks energy with blockchain technology. The company which was the first to enable peer-to-peer energy sharing, has developed a transactive energy platform to overcome the challenge of integrating distributed energy resources (DERs) into supply networks. LO3 has already gained investment from Braemar Energy Ventures, Centrica, and Siemens.

In September 2019, SE Ventures, the newly established venture capital arm of Schneider Electric, backed the $10 million Series A round of Titan Advanced Energy Solutions, the developer of a a novel Li-ion battery management system for stationary energy storage.

Sunverge, a San Francisco, CA-based provider of a Distributed Energy Resource (DER)
control and aggregation platform, raised $11m in Series D funding in August 2019. The round was led by Ecosystem Integrity Fund with participation from Equinor Energy
Ventures and Evergy Ventures.

Private Equity Investments in Q3 2019

Motorola Solutions, a US provider of software for mission-critical communications solutions and owner of Avigilon video security and analytics software, received post-IPO equity of $1 billion in September 2019 from technology investor, Silver Lake in a strategic partnership first initiated in 2015.

In August 2019, private equity firm, Presideo invested $75 million to merge 15 independent smart-home design-build firms across the United States, creating Bravas, a nationwide integrator, operating as one national brand of electronic lifestyle technologies using lighting, shading, climate, entertainment, smart home and other technologies, to transform how custom homes and spaces are designed, organized and operated.

Memoori has published a recent report on M&A and Investments in Smart Buildings, H1-2019. Deals included in this analysis cover companies targeting both commercial and industrial buildings and smart homes. We focus on the Operate and Manage phase of the building life cycle encompassing IoT in buildings, energy management, physical and cyber security, proptech, facilities optimization, occupant comfort, workplace experience and more. The H2-2019 report will be published in January 2020.