Opower’s future and its confidential IPO

The Wall Street Journal reports that Opower has quietly and confidentially filed to go public. The JOBS Act allows companies with revenue under a billion the previous fiscal year to file without disclosing financial information.
Opower has raised at least $67 million and hasn’t need cash for a few  years now. The company has been a real success story in terms of reaching financial stability in a short amount of time while adding utility customers for its energy efficiency services targeted at the residential market. Utilities find the idea of paying Opower to reduce their energy usage to be a cheaper alternative than building expensive peaking power plants.
Should the IPO happen, Opower will quickly learn that Wall Street only cares about future growth. Or as one hedge fund manager put it succinctly to me a few years ago when he told me to forget the hype, the analysts expectations and just remember all anyone on the street ever wants is three consecutive quarters of profit growth.
To show continued strong growth it’s going to need to sell more products and services to utilities. Its looking at behavioral demand response as one possibility. Right now utilities don’t really consider residential customers in demand response programs, but Opower’s reach and analytics technologies are making it possible to quickly reach customers (texts, email) and get them to adjust their energy usage.
Opower’s IPO would mark a positive step for cleantech, as it comes after public market successes at SolarCity and Tesla, as well as Google’s recent acquisition announcement of Nest for $3.2 billion. I sometimes wonder how different cleantech VC would be today if Fisker and Solyndra had never existed. Together the companies burned around $2 billion in VC and devastated upstream investing. Here’s to Opower showing that you can still make money in cleantech.