so the companies working with Tendril could claim dollars from federal stimulus programs intended to boost cleantech startups.
That’s when Tendril reached a turning point. The company needed to clarify its strategy and cut costs at a time when its runway was ending and investors across the industry had lost their appetite. Tendril also was overdue to overhaul its software.
“We faced a funding crisis during a time when we were spread too thin with too many customers [and] at a point where we needed to re-architect our platform for further growth,” Tuck said. “Any one of those things can kill a company.”
Fortunately for Tendril, it saw the trouble developing in time to take action. The job cuts enabled Tendril to start turning a profit, which gave it the ability to refocus its energy on improving its software. The emphasis now is on developing software utilities can use to sell services to customers as they move away from a “one-size-fits-all” approach. Tendril’s predictive tools also help utilities identify potential customers and conduct outreach and marketing campaigns.
Tuck said that Tendril now is posting 50 percent year-to-year revenue growth and has been operating in the black for the past 18 months. The company declined to give the amounts of revenue or profit. But the rebound helped lead to a new growth equity investment from one of the leading renewable energy companies in the world that marks a new direction for Tendril.
Tendril’s primary customers have been utility companies, and it has about 15 clients. They include Duke Energy (NYSE: [[ticker:DUK]]), the largest electric utility in the country, and Seattle City Light, Tuck said.
But part of Tendril’s long-term plan is to add new customers such as solar energy providers. SunPower, which is based in San Jose, CA, is the second largest U.S. manufacturer of photovoltaic panels and the 10th biggest in the world. The company makes panels for residential, commercial, and utility-scale projects. SunPower has been able to capitalize on growing demand for solar power as panels become cheaper and more efficient. The company reported revenue of $2.5 billion in 2013 and made a $33.5 million profit.
SunPower will use Tendril’s software to better understand existing and potential solar customers so it can offer them personalized choices, president and CEO Tom Werner said in a media release. That means using the software for finding prospects and running marketing campaigns, among other things, Tuck said.
If the software lives up to Tendril’s claims, it could provide SunPower a lot of useful information. Tendril says it can accurately predict the energy consumption of any of the 130 million homes in the U.S. The software relies on physics modeling, weather forecasts, and demographic and consumer data from third-party sources, and it can create an estimate without knowing the customer’s past consumption habits.
Utilities, and now SunPower, could use the software to find customers who would be interested in enrolling in efficiency programs or adding solar panels to their homes. The software also creates reports and an online dashboard where consumers can track their consumption patterns and find ways to cut costs.
With some tough years behind it, Tendril can start thinking about the future. International expansion is one option, as is adding features to manage electric vehicle charging, Tuck said. He also thinks the new funding round makes Tendril a viable “pre-IPO” candidate.
If Tendril does go public, it would join the ranks of Opower (NYSE: [[ticker:OPWR]]), an Arlington, VA-based company that also makes software for utilities. Opower had a $116 million IPO last April, and like Tendril it creates paper energy efficiency reports utilities can mail to customers. They’re near competitors in that regard, but Tuck says Tendril is more focused on creating software utilities can use to sell services to customers, while Opower focuses on encouraging consumers to reduce energy consumption.
But that’s all a few years down the road, Tuck said. For now, Tendril is focused on 2015 and the new deals with utilities it will be announcing soon. That means Tendril once again heads into a new year with optimism.
“We needed to focus over the past couple of years,” Tuck said. “Now we enter 2015 with a great combination of happy customers, a technology platform that we can be proud of, and a slug of growth capital that gives us the ability to invest in some new expansion.”
