Rubicon Technology Partners Gives VC Investors An Out With Buy Of Tendril

Fourteen years after software company Tendril entered the market, Rubicon Technology Partners is giving its venture capital backers an out, taking a majority stake in the home energy management software company.

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In December Rubicon Technology Partners, the Stamford, Conn.-based private equity firm specializing in enterprise software, made a majority investment in Tendril. Morgan Stanley Alternative Investments and ZOMA Capital also invested, taking minority stakes in the software company. With the funding, Tendril will accelerate is growth via new technology, sales expansion, and acquisitions.

Tendril, which serves the utility industry has raised more than $100 million in investments during the past decade, with its home energy management platform used by many in the industry. Its software helps utility companies engage with customers, getting them to purchase more energy-related products such as smart thermostats and smart speakers. The company’s platform has advanced analytics on more than 123 million homes and is used to execute behavioral energy efficiency (BEE), customer engagement, and demand management programs by some the largest utilities in the world.

"With a mission-driven culture, world-class technology, and passionate customers, Tendril is ready to become the clear leader in the HEM market,” said Steve Carpenter, Partner, Rubicon in prepared remarks when announcing the deal on December 4. “The company’s track record of winning new customers and supporting some of the largest utility programs in the country provides an excellent foundation for growth, and this investment will allow Tendril to continue to distance itself from competitors.”

Thanks to smartphones, voice-activated digital assistants, cloud computing and internet-connected devices there is a huge demand for software to manage all of it. That hasn’t been lost on private equity firms that have been voracious investors in software-as-a-service companies during the past few years. Rubicon Technology Partners, although not a veteran in the PE world, is making a name for itself since launching the lower-middle market private equity firm in 2012. The PE firm focuses its investment dollars on SaaS companies serving the enterprise market with revenue of $20 million to $100 million. Equity investments are typically in the $25 million to $150 million range, with Rubicon engaging in a variety of transaction types including buyouts, recapitalizations of private companies, shareholder liquidity events and carve-outs. The PE firm is concentrated on growth, providing strategies to expand, including making bolt-on acquisitions and growing the number of products the platform provides.

In addition to Tendril, some of its portfolio companies include 4tell, which is a SaaS company whose capital asset performance software optimizes the performance of real estate portfolios and capital asset infrastructure and Astute, which makes artificial intelligence software for engaging consumers.