Silver Spring Networks shares up sharply in first day of trading
Mar 13, 2013 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) --
REDWOOD CITY -- Silver Spring Networks, one of the leading companies in the highly competitive "smart grid" space, celebrated its long-awaited IPO Wednesday.
CEO Scott Lang rang the opening bell of the New York Stock Exchange, and shares of the company were up sharply in the first hours of trading.
The company, largely backed by Foundation Capital, announced late Tuesday that it was making 4.75 million shares available -- 1 million more than originally planned -- due to high demand from investors and an oversubscribed IPO. It priced the IPO at $17 a share, which means it raised $81 million.
"This was a really wonderful milestone," said Lang in an interview from New York. "Our investors see the size of this market."
Lang said that there was a lot of "high quality" demand from investors, and the decision was made to make an additional 1 million shares available to satisfy "some of" that demand.
At 7:30 a.m. PST, shares of SSNI were trading at more than $21, up more than 23 percent.
The Redwood City-based company first filed for an IPO in July 2011, and as the months passed many questioned whether the company would be able to pull it off. The company had originally hoped to raise $150 million; in its Feb. 26 prospectus, the company said it would offer just 3.7 million shares and raise $63 million.
Silver Spring Networks was founded in Milwaukee, Wisconsin, in 2002 and provides the hardware, software and services that
allow the smart grid to function. It has inked deals with several leading utilities, including PG&E and Baltimore Gas & Electric. The smart grid market is booming internationally in Brazil, Germany, China, South Korea and elsewhere.
The Department of Energy and the nation's leading utilities are eager to make the electric grid more reliable, secure and efficient, from the power plant and transmission lines to homes and offices. Silicon Valley's telecommunications and software expertise have been key to these efforts. Other smart grid startups in the Valley have been acquired, including San Mateo-based eMeter, which was purchased by Siemens in 2011.
But the deployment of smart meters in the United States has slowed as federal stimulus dollars have dried up.
A small but vocal group of consumers in Northern California, Maine and elsewhere have voiced concerns about privacy and perceived health effects of smart meters, and in some jurisdictions have demanded the right to "opt-out" of having smartmeter devices installed at their homes.
In its early days, Silver Spring Networks tried to raise money from investors in the Midwest with no luck. That changed when its executives had a meeting with Foundation Capitol in Menlo Park, which was keen to invest in companies that were improving energy efficiency from the demand side.
Silver Spring Networks moved to Silicon Valley, and Foundation's Raj Vaswani became the company's chief technology officer. The company is also backed by Kleiner Perkins Caufield & Byers, Northgate Capital Partners, and Google (GOOG) Ventures.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
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