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General Catalyst buys majority stake in CLEAResult, Texas energy efficiency firm

Posted by Scott Kirsner  February 14, 2011 07:42 AM

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If you haven't yet explored ways to make your home, office, or school less power-hungry, a Texas company called CLEAResult aims to change that.

Cambridge-based General Catalyst Partners recently made its biggest energy industry investment thus far, acquiring a majority stake in CLEAResult, a 300-person company headquartered in Austin that works with utilities to design and implement energy efficiency campaigns.

CLEAResult is already active in 15 states, but CEO Glenn Garland says that the new funding will enable the firm to become a national player. By the end of March, the company hopes to have a small Boston office open and staffed.

Last year, CLEAResult was ranked by Inc. Magazine as the 144th fastest-growing private company in the U.S. Garland says 2010 revenues surpassed $40 million.

"Utilities are 98 percent of our business," Garland says. "We act as an extension of their staff. Most utilities are working under either a regulatory or statutory goal to achieve a certain energy efficiency target, like a reduction in total kilowatt hours used in their market."

CLEAResult helps utilities communicate with their customers. Sometimes, CLEAResult employees go out to homes and businesses to conduct energy efficiency audits, and in other instances, they may direct a utility customer to other contractors in their market. Audits are on-site inspections that typically point to a number of ways a building's energy efficiency can be improved, like better seals around exterior doors, or better insulation in the attic.

"We find that cost isn't usually one of the barriers to someone doing something about energy efficiency," Garland says. "It's that they don't have the knowledge or expertise to make judgments like which contractor to hire, or what level of efficiency they should try to attain."

In some markets, like Nevada, CLEAResult also helps utility customers install certain small-scale renewable generating technologies, like solar panels, wind turbines, or hydropower.

"We've been looking to make an investment in this space for three years now," says Hemant Taneja of General Catalyst. "We want to enable them to go from 15 states to 50 states."

Prior to the General Catalyst investment, Garland says the company had been "completely bootstrapped. We did it the old-fashioned way — with credit cards."

Taneja wouldn't be specific about the amount General Catalyst had paid for its stake in CLEAResult, aside from saying that it is the firm's biggest energy-related investment to date.

Former Massachusetts energy secretary Ian Bowles expects that CLEAResult's entry to the New England marketplace — often considered relatively far along with its energy efficiency initiatives — could help spur competition. "We need more market participants offering innovative, well-designed, cost effective solutions in order to get more energy and bill savings and drive competition," he wrote in an e-mail.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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