EcoFactor makes thermostats smarter with new $3.5M

EcoFactor, a provider of software that automates two-way thermostats for energy efficiency, has just banked another $3.5 million, bringing its recent round’s total to $5.9 million. For a company that just launched in November, it’s doing pretty well — raising more than targeted and continuing its partnership with major Texan utility Oncor.

There’s a shift taking place in the cleantech sector toward capital efficient investments. EcoFactor is a perfect example as a software offering — an investment in the single digit millions goes a long way toward substantial and immediate returns.

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The same can’t be said of most other funding opportunities in the green space. Solar, wind and transportation companies require sums in the hundreds of millions, often need government supplements, and don’t start generating cash flow for years, if ever. Cleantech investing may be on the rebound, but much of it will probably go toward companies like EcoFactor over Solyndra or Fisker Automotive.

The EcoFactor software allows thermostats to adjust themselves automatically to maintain users’ comfort while also saving energy. When it’s first installed, users adjust the temperature like they would on any other thermostat. The software internalizes this data, combining it with external weather conditions, square footage, peak energy pricing, and timing to adjust the temperature by tiny increments throughout the day. The idea is for residents to never fuss with their thermostats again — and to save both energy and as much as 30 percent off their electric bills without changing a thing.

In addition to being representative of the trend toward capital efficiency, EcoFactor highlights one of the major principles guiding in the energy efficiency industry today. All of these systems and devices dedicated to managing home and business energy consumption are most successful when they don’t require anything of their users. No one wants to have to manually enter data, or continually check in with a dashboard to monitor their energy use. They want to go green without going out of their way. EcoFactor, along with several other players in the space like Tendril and Control4, have run with this concept — and all three have landed plum venture deals.

EcoFactor launched last year in concert with a partnership with Oncor. The utility, operating in the wild deregulated energy market in Texas, is hoping to distribute the technology throughout its coverage area to give it a leg up over competitors — if it tests well in pilot mode. Now, the Redwood City, Calif. software company is scouting for deals with wireless providers like Verizon or Comcast to start offering more holistic home energy management solutions.

EcoFactor raised the initial $2.4 million in December from Claremont Creek Ventures and RockPort Capital Partners, in addition to angel investors. Its original goal for the round was $4.5 million. Surpassing that mark by $1.5 million is a very promising sign for the company and the technology.

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