Earlier investors include Exelon and E.ON. They or another electric company might assure more independence for the IoT technology provider than a lighting company could.
As troubled smart lighting specialist Organic Response seeks a buyer to pull it out of financial administration, one or both of two large energy utilities could emerge as the rescuer.
Essen, Germany-based E.ON, and Chicago-based Exelon Corp. both invested in five-and-a-half-year-old Melbourne, Australia-based Organic in earlier financing rounds, with Exelon channeling funds through its Constellation Technology Ventures venture capital group.
Organic Response pioneered an Internet of Things (IoT) technology that helps turn LED lighting into a smart system that detects room occupancy and conditions. Its chips, sensors, and software can lead to greater energy efficiencies through more effective lighting control, and can potentially yield tremendous value by giving facilities managers insights into how to improve the use of physical space and property.
But as LEDs Magazine reported on Friday, the company quietly filed for financial protection in February, having apparently failed to land investments it had been counting on by the end of last year.
Organic Response's IoT technology might stay more independent if a non-lighting company acquires it. Above, the New York City offices of financial firm Dixon Advisory, lit by a combination of GE lighting and Organic Response sensors and controls.
The list of potential buyers includes lighting companies, which are currently engaged in a frenzied round of consolidation, as LEDs noted last week. But such an acquisition might discourage other lighting companies from using the technology, which could become viewed as proprietary. Several lighting vendors such as Fagerhult, Feilo Sylvania, and GE's Current group already deploy Organic Response technology.
Word is now circulating that an acquisition by an energy utility might help ensure greater independence, or perceived independence. At least one of the two utilities is also believed to be using the Organic Response technology on its own commercial office premises.
It's not clear why a utility would spend to pluck Organic Response out of administration while not having stepped up during the most recent fundraising round. But an administration buy-out might come at a lower cost, and might include less of the company than a pre-administration investment would have.
Energy utilities have been known to work closely with smart lighting firms. For example, the UK’s largest utility, British Gas, provides smart bulbs from Aurora Lighting as part of the Hive smart home initiative.
LEDs has sent inquiries to E.ON, Exelon, and Constellation but has yet to hear back. We will keep you posted on developments.
MARK HALPERis a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).
*Updated Mar. 20, 2017 1:33pm for clarification.