Opower plans expansion with $50 million investment
Tuesday, November 30, 2010; 12:12 AM
Opower, an Arlington-based company that works with utilities to promote energy efficiency, has received a $50 million investment from venture capitalists that executives said will be used to hire staff and improve the company's software.
The sum marks the third round of funding for the privately held company and is one of the largest venture investments landed by any firm in the region this year. Silicon Valley investors Accel Partners and Kleiner Perkins Caufield & Byers led the investment, with participation from New Enterprise Associates.
Opower, which serves 45 utilities nationwide and reaches about 2 million homes, gathers data from utilities on the energy use of households and then compares it with the consumption patterns of neighbors in comparably sized homes. The results are shared with customers, along with recommendations for how to lower energy use.
The company also works with utilities to give homeowners a better picture of their energy use on an ongoing basis, sending e-mails or text messages when use spikes.
"We have followed Opower's development for over two years now and we believe their approach is quite unique," said Peter Wagner, a partner at Accel whose investment portfolio includes Facebook and Groupon. "We are quite experienced in the use of social media to help engage consumers. . . . We think that those same techniques can be applied with great success on behalf of utilities."
Opower chief executive and co-founder Dan Yates declined to disclose the company's revenue but said the business has tripled in the past year.
Yates said the investment, to be announced Tuesday, will be used to add 50 engineers and product developers to the staff of about 160.
"We raised this money not because we needed it," he said. "We were cash-flow break-even the past few quarters. We raised the money because we wanted to grow even more quickly."