Giving Your Building a Brain: Enlighted Brings Energy Efficiency And More

Can lighting sensor and Internet-of-Things company Enlighted do for commercial building efficiency what SolarCity did for the adoption of distributed solar energy?  That’s what the CEO of the Silicon Valley-based company thinks. And a growing number of investors and industry observers — to say nothing of the firm’s big-name corporate clients — seem to agree that Enlighted may be onto something big.

The company installs advanced lighting control sensors and analytics platforms, cutting lighting costs for large corporate customers by up to 70%, CEO Joe Costello tells CleanTechIQ. The company’s client list includes Google, Tesla, LinkedIn, Hewlett-Packard, Tesla, AT&T, Oracle, Deutsche Bank and Uber.  Many of Enlighted’s largest clients are deploying the technology at facilities around the world, Costello says.

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In late February, the company secured $25 million in Series D venture funding to accelerate technology development and to expand its international distribution to France, Germany and the United Kingdom. Enlighted has raised over $80 million in venture capital funding since its founding in 2009.

Participants in the latest funding round include existing investors Kleiner Perkins Caufield and Byers, RockPort Capital Partners, and Draper Fisher Jurvetson, as well as new investor Tao Capital Partners.

Enlighted was also named in January to the prestigious 2015 Global Cleantech 100 list by a panel of venture and corporate investors assembled by the Cleantech Group. Cleantech Group also named Enlighted its “North American Company of the Year.”

Energy-Savings-as-a-Service Financing Model

Although the company doesn’t plan to raise another round of venture funding in the near future, it will continue to raise project finance capital to back its new no-money-down financing program, says Costello.

Enlighted launched this “energy savings-as-a-service” financing model, which it calls Global Energy Optimization (GEO), in 2014. It allows clients to get a sensor network, allowing them to optimize commercial space and receive energy savings, without any upfront cost. Enlighted and the client share in the energy cost savings, which are usually around 25% to 30%, Costello says.

To help finance GEO, and specifically to cover the cost of deploying the technology, Enlighted has partnered with Square 1 Bank, a division of Pacific Western Bank, which is providing $20 million in funding.

The financing model enables clients overcome the “capital hurdle” that many businesses face when adopting new clean technologies, says Costello. He likens GEO to what SolarCity did for the adoption of distributed solar energy.

“When we go to these large companies, we are talking the scale of tens of millions of dollars. We say to them, ‘Just like SolarCity, we will do the design, architecture, installation and financing.  You don’t have to put up a cent or take out any debt. It will be paid for out of the energy savings that we generate.”

That approach is helping to drive adoption. “It’s not just been piloted or a prototype. This thing is going into mass deployment,” Costello says. “We are right about the point of having installed 100 million square feet. And at that point, it’s starting to get real. It’s starting to get big time and significant.”

Enlighted is currently looking to expand its roster of financing partners to support new projects and the customer segments it works with across the globe, Costello tells CleanTechIQ.  He’s also seeing growing interest for financing its energy efficiency projects from traditional banks as well as from specialty finance companies.

The company started building an international team at the start of 2015; this team now spends about 75% of its energy on Europe. Asia — China in particular — is its next target.

“China is a huge opportunity,” Costello says. “It’s high on our list this year to do something significant there.” Enlighted has already done some work in China, he adds, as it has installed sensors in Chinese facilities of some large U.S. clients.

The Target: Super Large Deployments

Regardless of geography, Enlighted tends to go after “super large deployments,” Costello says, targeting companies that have at least 5 million square feet that can deploy their sensors and controls in their facilities globally.

He recounts a recent conversation with a the CFO of a “gigantic” pharmaceutical company with 50 million square feet worldwide. The company did small pilot tests with Enlighted systems in the past, and is excited to take it global across the entire company. The company has sustainability goals, Costello says, but the real driver behind its interest in Enlighted is the financial benefits of deploying the technology globally.

Enlighted’s first — and still largest — GEO client is AT&T, which deployed the company’s sensors in over 400 buildings, totaling 30 million square feet.

The company now has seven GEO customers, and Costello believes the company will sign up three to four more companies that have large global real estate portfolios in the next few months.

However, not all of its customers use its financing model — such as Google, Enlighted’s second largest client overall. It chose not to use GEO financing, because it simply didn’t need financing to adopt the technology. Google also doesn’t do retrofits, says Costello. “If they change something, they change their entire building. They don’t just do lighting upgrades, they don’t do it piecemeal — they change it to make it a complete Google environment.”

When Enlighted takes on a new project, it puts sensor modules in every single lighting fixture in the building. Those sensors “watch over the space and gather data about what’s going on in the space,” Costello says. They detect detailed information on occupancy, ambient light, temperature, and energy consumption. That data, delivered via a web-based user interface, helps the company’s software determine how best to light the space at all times and optimizes building system performance.

In just about every sensor install, Enlighted also replaces the fluorescents with LED lights, Costello says. Generally the cost of labor is the biggest cost of the project, so it makes sense to install the sensors and change the lights to LEDs at the same time, he says.

The entire cost to both install the sensors and upgrade the lights to LEDs tends to be a little less than $2 per square foot on average. The typical deployment is for 10 million to 20 million square feet; AT&T, the largest deployment at about 30 million square feet, cost about $60 million.

But thanks to the GEO program, “AT&T has never spent one cent,” Costello says. “We got all of that financed for them and they are saving about $10 million per year.”

Overcoming Corporate Adoption Barriers   

Even though it saves clients money, Enlighted still encounters objections with customers that don’t want to lay out capital for energy efficiency retrofits — especially before introducing the GEO system in 2014. Being able to offer that no-money-down financing model has eliminated some of those issues but, even then, that’s sometimes still not enough to get large clients to adopt, he says.

At the executive level, in the top 2,000 global companies, energy doesn’t hit their list of top 5 list strategic priorities.  “So you can’t even get on their radar screen with just simply an energy discussion,” Costello says.

“If you want to make a global impact on those companies, you’ve got to get to that C level executive, someone who has the purview of all of their real estate,” he goes on. “And, with those people, energy is not a big enough issue for them. To get their attention, you have to have some other value you are creating beyond energy efficiency. ”

Therefore, Enlighted now focuses its pitch on other business applications, beyond energy savings. Those other applications include Space, a space-planning tool, and Aire, an HVAC management tool. Both use the data collected by the Enlighted sensors to dramatically improve the efficiency of commercial buildings.

For the huge pharmaceutical client, it was the “space utilization” application for work space optimization that really drove the installation of the sensors, Costello says, “because these sensors, watch exactly what is going on in your facility, in real time, all the time. And that kind of information just does not exist today for facilities.”

The pharmaceutical company felt its facilities were being very inefficiently managed. “They wanted to get a better picture of how their asset base and resources are being utilized, where they can consolidate facilities, where they can optimize facilities, because it’s a hugely expensive part of their asset base and resources. They want to make sure that it’s highly optimized,” Costello says. “This is the first time they can get accurate data on a real-time basis globally, and see exactly what is going on.  And the lighting and energy savings it generates pays for the installation of the sensors they use for workplace optimization.”

In another example, Costello spoke with the CEO of a Midwestern hospital chain, who cited a study that U.S. nurses spend, on average, one hour each day simply looking for equipment. That, Costello notes, is a “waste of human energy and time and money.” The CEO felt he could reduce that time considerably with Enlighted sensors, Costello says, and the hospital chain is now deploying the sensors for asset tracking in every location.

Clients like the hospital chain and the pharmaceutical company point the way to the future for Enlighted, Costello says. “This is no longer about just providing lighting controls,” he says. Installing the sensors and software, he says, “is like giving your building a brain.”

Other companies tackling energy efficiency in buildings, gaining traction, and attracting capital for growth include:

  • Boston, Mass.-based Digital Lumens raised $23 million in Series C venture funding in 2014, bringing the total amount raised to $65 million since its founding in 2008. The company produces energy-efficient software-driven LED lighting systems for commercial and industrial markets, which include fully integrated controls and reporting capabilities. Investors include Aster Capital, Goldman Sachs, Flybridge Capital Partners, Black Coral Capital, and Stata Venture Partners.  Reflecting strong growth and its industry leadership position, it was honored by LEDs Magazine with the “Illumineer of the Year” Sapphire Award on March 14 for bringing smart lighting to more than 300 million square feet customers in 45 countries.


  • Lexington, Mass.- based FirstFuel Software, is a software company that offers the energy industry a deep data platform that provides detailed analysis regarding how energy is used in buildings. FirstFuel, which describes itself as a software-as-service (SaaS) company (its platform applies analytics to meter and business data, enabling energy providers to deliver individual insights to all their business customers), currently has more than 20 customers. It raised $23 million in Series C venture funding in 2015, bringing its total funding to $45 million since its founding in 2010.


  • Redwood City, CA-based Autogrid Systems, a provider of software and cloud-based services for utilities, grid operators and end users, employs big data analytics to generate real-time predictions. It raised $12.75 million in a Series C venture round in 2014 and has raised $21 million in venture funding to date from investors including E.ON, Foundation Capital, Stanford University, and Voyager Capital.


  • Foster City, CA-based BuildingIQ, a developer of energy management software platform that forecasts energy demand and optimizes HVAC systems, raised $23.38 million in total venture capital funding from Aster Capital, SFS VC (Siemens), and Paladin Capital since its founding in 2009.  The company went public (ASX:BIQ) on Dec 18, 2015.





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