The last big wave of venture investment in clean-tech startups has long since crashed and rolled back. But if you’re making software instead of something produced by a factory, private investors are still willing to open up the checkbook.
That’s certainly the case for First-Fuel Software, a developer of data analysis software for electric utilities. The company, based in Lexington, said Wednesday it raised another $23 million in venture capital, in part to help bankroll an expansion in Europe.
FirstFuel’s software analyzes the energy use of individual buildings, to locate waste in the system. Power providers can use that information to push efficiency fixes for their biggest electricity users — better lighting or an air-conditioning upgrade, for example.
This is a big deal in the two dozen states, including Massachusetts, that have passed environmental rules requiring utilities to hit targets for efficiency. Those rules spurred utilities to delve into the huge amounts of data they collect, an asset that historically had been essentially unused, FirstFuel chief executive Swap Shah said.
“Think of the electricity meter just like a point-of-sale system for a retailer,” he said. “So far, most utilities have done nothing with that data other than send the bill.”
FirstFuel is among a group of emerging energy-efficiency companies that use analytics software to digest large amounts of data and find savings. Competitors include Boston-based Retroficiency, EnerNoc Inc., and Seattle-based EnergySavvy.
Those kind of efficiency policies are also paving the way for international expansion. The European Union is putting more teeth into its own plans for improving energy efficiency, and that’s prompted more interest in software providers.
One of Europe’s largest energy providers, E.On, is an investor in FirstFuel and has used its software.
FirstFuel now has about 100 employees and 25 customers, including utilities and such government agencies as the General Services Administration and Defense Department. The company doesn’t disclose its revenues, but Shah said FirstFuel does expect revenue to double or even triple this year.
The latest investment should last FirstFuel the next two years or so, “to a point where we contemplate either an IPO or a large institutional round of funding,” Shah said.
That kind of growth is part of a “next wave” of clean-tech startup investing, as Boston-based investor Rob Day of Black Coral Capital recently wrote, targeting businesses that are either closer to fast-growing consumer markets or able to expand quickly.