Billionaire Thomas Siebel has raised $70 million for his data analytics startup C3 IoT as investor enthusiasm for the so-called Internet of Things begins to wane.
TPG Capital's growth arm led the financing with a $60 million contribution. Sutter Hill Ventures, InterWest Partners and Siebel also participated in the round. Siebel and TPG declined to disclose the company's valuation.
Siebel founded the company in 2009 under the name C3 Energy. The Redwood City, California, startup initially targeted energy companies before expanding to other industries and eventually rebranding itself earlier this year. C3 IoT helps businesses collect and analyze data from internet-connected sensors, including thermostats and electrical transformers, and other sources.
Customers include energy companies Enel SpA and Engie SA, as well as Cisco Systems Inc. C3 IoT won a $25 million contract this year to track energy use by the U.S. State Department at more than 22,000 facilities around the world. The company competes with General Electric Co., MapR, Microsoft Corp.-backed startup Pivotal and Siemens AG.
In recent years, startup investors couldn't get enough of the Internet of Things. The promise is that as hardware gets connected—everything from fire alarms and oil wells to watches and toaster ovens—companies will need to understand all the information these devices produce and then manipulate them from afar. Funding for these companies reached $3.2 billion in 2015, more than double what it was in 2012, according to research firm CB Insights. However, the hype may be dissipating. Financing is expected to decrease this year to $3 billion, the researcher said.
"We are not in the sensor business; we are not in the hardware business; but we are in the business of aggregating all these data sources," said Siebel, C3 IoT's chief executive officer. "These algorithms are self-learning so that every time they see a new piece of data, they get more accurate."
Siebel, 63, was an executive at Oracle Corp. in the 1980s before founding Siebel Systems. He sold that company, which made customer relationship management software, in 2006 to Oracle for $5.8 billion. A few years later, Siebel and a tour guide were attacked by an elephant. His net worth is at least $1.4 billion, according to the Bloomberg Billionaires Index.
TPG has been investing aggressively in private companies. Its technology holdings include Uber Technologies Inc., Airbnb Inc., Tanium Inc. and Domo Inc. Nehal Raj, a partner at TPG who led the investment in C3 IoT, said he had been courting the company's management team for several months. C3 IoT has estimated annual revenue of $50 million and about a 40 percent share of the global smart meter market, according to Harbor Research.
—With Tom Metcalf