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 OG&E account for almost 80% of service revenue. 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. It does not manufacture its own hardware, but relies on two contract manufacturers, mainly Jabil Circuit and Plexus.
Sales and Marketing
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 has connected almost 16 million networking platform devices and has 35 pilot projects in progress in Australia, Europe, New Zealand, South America, and the US.
As a newer company, Silver Spring is still getting its operations off the ground. It recorded its first substantial revenues in 2010 ($70 million), which grew to $237 million in 2011 and fell 17% to $197 million in 2012. Most of its revenue in 2012 came from contracts with utility customers signed the prior year; only 5% of sales came from new customers. (Sales cycles with utilities can be long and unpredictable, usually requiring a pilot program before landing the full contract.) In addition, the company has yet to record a profit.
International expansion is a priority for Silver Spring, and in 2012 the company landed two customers in Brazil, AES Eletropaulo and CPFL Energia. Also that year it began collaborating with Hitachi to develop a smart grid project in Japan.
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 a quarter of Silver Spring's stock.