Terralux has raised $11 million in growth investment to build its retrofit LED business.
In 2014, Terralux sold its portable lighting business to Lightstar Corporation to focus on commercial solid-state lighting. The company has raised $40 million to date.
The round was led by EnerTech Capital, along with existing investors Generation Investment Management, Crawley Ventures, Emerald Technology Ventures, GC&H Investments and Terralux co-founder Anthony Catalano.
“Terralux has built elegant solutions that allow building owners to begin retrofitting the enormous base of existing buildings with energy-efficient LED technology,” Bill Kingsley, managing director of EnerTech Capital, said in a statement. “The pace, quality and the market acceptance of their new product releases caught our attention.”
The new product that EnerTech specifically touted is Terralux’s LEDSENSE, which is a cloud-based network that brings together sensors, communications and controls. Beyond adjusting the lighting, the sensors also allow an HVAC system to tweak the temperature, or the occupancy information can be used by businesses to fine-tune office layouts.
Terralux has already doubled its revenue from the commercial retrofit market and expects growth in that category to be 250 percent in 2015. Retrofits currently make up about half of the company’s business, and Terralux predicts that retrofits and LEDSENSE will make up about three-quarters of the business in the next year. The company is currently targeting hotels, universities, retail and multifamily residences.
“LED retrofit with a cloud-based lighting system is the most economical way to connect a building’s infrastructure to the internet of things,” Steve Hane, Terralux’s CEO, said in a statement.
The Colorado-based startup is just one of many competitors targeting the growing lighting controls business. Big-name lighting vendors like Cree and Philips offer wireless LED controls platforms, as do various other startups, such as Digital Lumens, Enlighted, Redwood Systems (bought by CommScope), WattStopper and Adura.
The retrofit market is not as rich a landscape as new construction is for lighting controls networks, however. Research firm Memoori found that only 10 percent of the global market for lighting controls is in retrofits.
In the retrofit market, it's energy savings that are driving the switch to LEDs. “These retrofits can be performed quietly at night, without anyone even knowing it happened -- but the utility bill and lighting maintenance budgets get a big benefit,” Jon Guerster, CEO of Groom Energy Solutions, noted in a blog post about last year’s Lightfair.
For example, one of Terralux’s clients, Dartmouth College, wanted LEDs in its Baker-Berry Library. However, the ceiling was perforated metal in some places and solid sheet rock in others, so any new fixtures would have to identically match the current openings in the ceiling. Ideally, they needed 8-inch LED can light fixtures, which weren’t avaiulable on the market. Instead, they turned to Terralux for retrofit kits.
“We simply screwed the Terralux units in, twisted together a few wires, and the installation was complete; each fixture only took a few minutes,” Sam Zucker, electrical engineering designer at Dartmouth College, said in a case study. The retrofitted lights use two-thirds less energy.
Like Dartmouth, many universities have energy-efficiency goals that can help justify the cost of LEDs upfront, but there are also increasing rebates available to retrofit lights.
In the U.S., falling LED prices have made utilities rethink rebates for commercial and industrial LED lighting applications. Instead of being part of custom rebate programs, utilities are increasingly offering prescriptive rebates for LEDs. There is expected to be between $7 billion and $12 billion available in U.S. utility rebates by 2020.