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 BPL Global Ltd.'s roll-up strategy in the smart grid sector has provided a welcome exit for long-suffering investors in Serveron Corp., which was founded back in the early days of venture investment in cleantech, when hopes rode largely on expected increases in spending by utilities.The Hillsboro, Ore.-based startup raised $5 million last March from El Dorado Investment Co., Nth Power LLC, Cascadia Pacific Management, Oregon Life Sciences LLC, Perseus 2000 Expansion LLC, Siemens Venture Capital and Ventures West Management LLC to bring total investment since the company was recapitalized in 2001 to $30 million. Before that, the company was known as Micro Monitors Inc. It burned through an undisclosed amount of cash attempting to help utilities upgrade electrical grids with hardware monitors that tracked the performance of power transformers and relayed real-time information to the company's proprietary software products. The technology helped predict and prevent transformer failure. At the time the company was formed, pioneering cleantech venture firms such as Nth Power emphasized the idea that deregulation of utilities would spur innovation as they modernized operations to compete more successfully. But the precise opposite proved true, as utilities slashed spending to attract investors, and companies like Serveron withered. Nth Power founder and Serveron chairman Nancy Floyd said at the time of a $9 million round in 2004 that sales had fallen to $1.2 million in 2003 from $2.3 million the year before, and the company had cut its sales force to one person, essentially only processing orders that came through the door. Floyd acknowledged that the company was fortunate to land continued funding in the depressed utility spending climate, but investors had strong faith in Serveron's technology to address what everyone agreed was a mounting problem in aging utility infrastructure. At the time of BPL's $5 million cash infusion from Morgan Stanley Strategic Investments to close its third round in February, BPL announced that its new investor would aid it in an active prowl for acquisitions in the utility services sector. The Serveron deal is the first acquisition BPL has made in a year, after making four the previous year when it snapped up Columbus, Ohio-based software maker Mentorgen and international operators Euroconnect SA of France, Tyron Technologies of Brazil and a minority stake in Amperion SE in Greece. No terms of the deal were announced, but Serveron officials said the company is delighted, and at least some of the company's investors will sign on to join BPL investors Morgan, International Financial Advisors, PA Early Stage Partners, Innovation Works, Duquesne Holdings, Telkonet Inc., Al-Deera Holding Co., Tollgrade Communications Inc. and Chart Group LP. Perseus and Siemens will take board seats with BPL. As cleantech investing has heated up over the last couple of years, utility services deals, as a percentage of total investing, has declined in favor of solar, biofuels and wind energy, yet the area of monitors and infrastructure has attracted the bulk of interest in the subsector. - Clifford Carlsen See Jan. 8 press release from BPL Global See March 22 press release from Serveron See Feb. 15 story from TheDeal.com See March 31, 2004, story from The Deal.com
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