Silver Spring Networks helps utility companies plug into the 21st century. Its Smart Energy Platform modernizes a utility's existing power grid infrastructure into the "smart" grid, i.e. one that is connected to a digital network and more energy efficient. The Smart Energy Platform is a secure, Internet-based network made up of hardware, such as access points, communications modules, bridges, and relays; its UtilOS-brand network operating system; and software. It also offers managed services to maintain and regulate the network. Silver Spring sells its platform to electric, gas, and water utilities -- FPL, PG&E, and SMUD account for more than 70% of sales. The company went public in 2013.
Silver Spring Networks initially filed a $150 million IPO in mid-2011. When it finally priced in March 2013, the company only managed to raise about $80 million. It doesn't have any specific plans to use the proceeds.
Silver Spring is counting on its smart grid technology being essential to meet current demand for electricity, to prevent blackouts and accommodate new sources of energy, such as electric vehicles. Its devices are compatible with meters made by more than 50 different manufacturers, including ABB, GE, Itron, Landis+Gyr, and Secure Meter, but many of these companies also offer their own smart grid technology. Silver Spring sells either its communications modules to meter manufacturers and its other hardware and software products directly to utilities, or third-party devices, such as meters integrated with its communications modules, directly to utility customers. It does not manufacture its own hardware, but relies on two contract manufacturers, mainly Jabil Circuit and Plexus.
The company's products are relatively new to the market, and 2010 was the first year it began generating significant revenues. In 2007 it launched a pilot program with FPL as its first customer, and the Florida utility agreed to use Silver Spring's networking platform and advanced metering service for more than 4 million of its customers. The next year it won its first customers outside the US, Australia's CitiPower and Powercor. In 2009 it made its first acquisition, Greenbox Technology, a software company whose Web portal evolved into CustomerIQ, a program that allows customers to view their own energy consumption. Also that year it increased its focus on managed services and software-as-a-service capabilities. That led to its first long-term managed services agreements the next year with PG&E and FPL. It also expanded internationally in 2010, entering both Brazil and Europe. In 2011 it was chosen, along with Cable & Wireless, to participate in the largest energy sustainability project in the UK. It will continue to eagerly pursue additional international markets such as Australia, South America, and Asia.
Silver Springs' product and customer expansion efforts continued to pay off, as 2011 revenues bounded nearly 240% to more than $237 million. Its bottom line was still in the red, but improved from nearly $150 million in losses for 2010 to a little more than $90 million for 2011. More than 70% of 2011 revenues came from business generated before 2011. An improved balance in both its customer base and its product and services mix continued, as the contribution to total sales from its top three customers was reduced from 90% to 70%, and services grew from 6% of sales in 2010 to 10% for 2011.
Silver Spring was founded in 2002 and received the majority of its start-up funding from fellow Silicon Valley-based venture capital firm Foundation Capital. The firm owns more than 40% of Silver Spring's stock.