• Mergers and Acquisitions
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M&A Activity in the Energy Space Heats Up with Tendril's Acquisition of FirstFuel

Brett Feldman
Jul 05, 2019

Business

The hot pace of mergers, acquisitions, and strategic partnerships in the distributed energy resource space continues with the recent acquisition of FirstFuel by Tendril. Tendril in particular has been on a buying spree since it received a majority investment from Rubicon Technology Partners, acquiring EEme in January and EnergySavvy in May. Other recent moves include Landis+Gyr partnering with Sense, and Schneider Electric investing in AutoGrid. Financial details of the FirstFuel/Tendril deal are not publicly available.

The combination of FirstFuel and Tendril brings together leading providers of utility customer engagement software for the commercial and residential sectors, respectively. Jeff Woodward, Director of Solutions Marketing at Tendril, explained that both sets of customers are important to utilities, and providing end-to-end solutions is important, “FirstFuel is a clear market leader with amazing analytics that solve a lot of problems for utilities.” In terms of what each company brings to the other, Woodward said FirstFuel’s ability to determine business type based on load profiles can bring value to Tendril’s analytical capabilities. In turn, Tendril’s expertise in energy efficiency program design, measurement, and verification can help FirstFuel develop demand side management programs through its customer engagement platform.

From the FirstFuel perspective, Vice President Indy Ratnathicam agreed that the combination of residential and commercial platforms is powerful. He explained that “the delta in common data feeds and user interfaces between the two companies is low hanging fruit” for integration and synergies. Ratnathicam feels Tendril has good chops in behavioral science, which FirstFuel has started to get into, while FirstFuel can offer analytics and meter data expertise infrastructure and transfer it into Tendril’s system, giving Tendril more data to use and analyze.

Honoring Oracle Contracts

One part of the deal that must be addressed is the fact that FirstFuel has been partnering with Oracle (which acquired Opower) to offer similar combined residential and commercial programs to utilities, and there are several such active contracts in place. Tendril and FirstFuel both said that those contracts will be honored, and customers will continue to receive joint service. Scott Neuman, vice president for Opower at Oracle, concurred that there is universal commitment to continue providing those programs. He stated that Oracle is “proud of its extensible energy management platform for utilities,” which gives it the ability to potentially partner with others in the commercial sector going forward.

The Devil Is in the Details

While combining seemingly complementary services has a clear benefit in the market, the devil is in the details of the technology and corporate integrations of any merger/acquisition. Many promising combinations can go wayward due to incompatible systems or company cultures. Tendril and FirstFuel are both small, so it’s not like a large corporate whale swallowing a startup minnow. And the technical integrations do not appear to be too deep at too fast a pace, so expectations do not seem out of whack. 

The summer is just heating up, so I wouldn’t be surprised to see more such activity.