IDC ENERGY INSIGHTS: The Nugget in Ice Energy's Funding Announcement

New twist in investments from strategic and private equity investors

By Rick Nicholson, IDC Analyst

Ice Energy announced today that it has closed $24 million in Series C financing.  What is particularly interesting is that the funding round included a $4.5 million private equity investment from the new TIAA-CREF Green Building Technology fund in partnership with Good Energies.  TIAA-CREF is the 4th largest real estate investment manager and its Global Social and Community Investing Department plans to invest as much as $50 million in energy efficiency companies and green building technologies alongside Good Energies’ venture capital investments. These investments will seek to improve the energy efficiency of commercial buildings.

This is an interesting development, especially given other recent funding announcements such as Trilliant raising $106 million in July, which included strategic investors ABB and GE.  It seems to me that strategic and private equity investors are more frequently making parallel investments to venture capital investments instead of investing in the VC funds themselves.  This strategy raises the profiles of the investors and, I would assume, furthers their goals with stakeholders.  In the case of GE and ABB it furthers their goals of being perceived as more competitive in smart grid markets.  For TIAA-CREF it positions the organization to be seen as a more sustainable or "green" manager of its real estate portfolio.

I believe this is a trend that will continue into the future.  However, it begs the question "who's next?"  Will we see other leading real estate investment managers like Prudential, UBS, ING and Principal jump into the game?  And what about the leading competitors to ABB and GE?  Will IBM, Siemens, Oracle and Telvent start to make parallel equity investments in clean energy and smart grid start ups or will they stick with acquisition-only strategies?