Green IT: Boston’s Mini-Cluster of Companies Using Hardware, Software, and Web Information Technology to Lower Consumer Energy Usage

The Boston area gets plenty of attention for the software, Web, hardware, and mobile firms it serves as home to. It also has a crop of companies working on renewable energy and efficient battery technology. But it turns out those IT and energy areas aren’t mutually exclusive, as there’s a growing cluster of companies who overlap both these big fields, and they seem to be the shining stars of the cleantech sector, both regionally and nationally, experts say.

Indeed, there’s a bright future for companies that can use information technology to gather data on energy and help businesses and consumers be efficient with their energy usage, says Jon Karlen, a general partner at Boston-based Flybridge Capital Partners and board member of the New England Clean Energy Council.

“Ways to use information, content, and services, [and] media properties that consumers can go to live a more sustainable life—those would all be great things to develop in the U.S.,” Karlen says. As one example, he points to Digital Lumens, a Boston-based firm (and Flybridge portfolio company) that’s marrying networking technology with LED lighting systems to help big industrial-scale facilities cut down on unnecessary energy costs. (Check this out for more information on the company.)

Boston has actually got quite the population of startups developing IT to help companies and consumers get greener. Read below for a list of those we have identified so far, and some milestones those companies have achieved in the last year:

—Boston-based Ember, a maker of wireless networking technologies for helping consumers and utilities manage home energy consumption, saw its first profitable quarter in the first three months of 2010.

—Newton, MA-based Powerhouse Dynamics, a maker of software for showing homeowners which appliances are guzzling the most energy, raised roughly $1.4 million in 2010.

GroundedPower of Gloucester, MA, which uses energy monitoring software and online community-based goal setting to get homeowners to lower energy consumption, took in about $1.3 million across two different financings last year.

—Boston-based Web startup Practically Green is using gaming elements, social networks, and expert content to help consumers determine how “green” their lifestyles are and take steps to make greener choices. The newly launched startup (CEO Susan Hunt Stevens is an Xconomy board member) raised $750,000 in its first round last year.

—Burlington, MA-based Viridity Software attracted an $8 million Series B round to put toward its technology for helping customers improve energy efficiency in data centers.

—Boston’s Next Step Living is focused on targeting leaks and sources of energy inefficiencies in homes and helping customers retrofit homes to reduce energy waste. It pulled in a $2.6 million Series B round last summer.

—Big conglomerate General Electric took on a greener profile, announcing it was putting $200 million into its Ecomagination Challenge, to spur new ideas in energy efficient building, smart grid technology, and renewables. Cambridge-based mobile app firm Appswell is benefitting from this one, by powering the app for the contest. It took user-submitted ideas for cleantech apps and turned the top-voted ones into reality.

Many experts say that venture capital dollars won’t be pouring into traditional cleantech companies at the pace we’ve previously seen, due to slim returns and uncertainty about sustainable ways to encourage consumers to adopt technologies like wind and solar power. But there is going to be money flowing to those Web- software-focused companies, which typically can operate with smaller seed-stage financing while they scale.

“I think we’ve been confused for a few years in the U.S,” says Karlen. “And I think now policy and venture capital dollars are refocused on the right things.”

We’ll have to keep our eyes out on the deals that flow into this sub-sector of green IT. In the meantime, feel free to notify us in the comments below if we’ve missed any energy efficiency startups in the Boston area.

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2 responses to “Green IT: Boston’s Mini-Cluster of Companies Using Hardware, Software, and Web Information Technology to Lower Consumer Energy Usage”

  1. BobM says:

    GroudedPower was acquired by Tendril, located in Colorado.

  2. Perillon Software is an innovative, leading provider of Sustainability Performance Management (SPM) solutions for Energy and Environmental optimization. Headquartered in Littleton, Massachusetts, Perillon helps enterprises reduce wasteful resource consumption (e.g. energy) and mitigate strategic risk (e.g. environmental impact).