Energy Efficient Lighting Startup, Redwood Systems, Aglow With $15 Million Funding

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Redwood Systems, a Fremont, Calif. company that makes and installs network-based light emitting diode (LED) lighting control systems for commercial buildings attained a $15 million series b round of funding, the company announced today. Index Ventures led the investment, and was joined by the company’s earlier backers Battery Ventures and U.S. Venture Partners. Neil Rimer, co-founder and partner of Index Ventures, will join Redwood’s board of directors.

Chief executive and co-founder of Redwood Systems, Dave Leonard, said he would invest the new-found capital in the near term on “Scaling to build and produce the [lighting systems], sell them, create demand and support customers mostly, and on research and development.”

With 42 full-time employees currently, Redwood Systems works with technology partners around Silicon Valley to produce its energy efficient lighting systems, and with electrical contractors to install them. According to its website, Redwood Systems provide 50-80% reduction in electricity consumption versus flourescent lighting in an equivalent space.

Prior to co-founding Redwood Systems, CEO Leonard was the vice president and general manager of Cisco System’s Desktop Switching Business Unit. Asked if he had an exit strategy in mind for his lighting systems startup, including an eventual acquisition by Cisco, Leonard said “Discussions about the company’s potential acquisition, or whether to go public will be in line with the market for LED and lighting controls when it hits its pace, probably in 2012 or later.”

The company is currently focused on selling to building owners in markets where electricity costs a lot, relative to national average rates, including Boston, Washington D.C. and New York City, and throughout the West coast. “The difference in cost of electricity between Oklahoma and NYC is a factor of 4,” Leonard observed. He also said that Redwood Systems work especially well for building owners who are replacing flourescent lighting with LED lighting.

Redwood Systems’ technology works somewhat like ethernet works for an office full of computers, connecting LED lights that are equipped with micro-sensors to a central power source and command center. The sensors in each light control the power, dimming and brightness of the lights. The lights can be set to dim automatically as sunlight streams into a room, or to brighten when somebody walks into a room. Individuals can adjust LED light bulbs over their work space through a web browser and site that functions like a password protected remote control.

In 2009, lighting accounted for 14% of U.S. electricity use, according to reports by the Department of Energy. LED lights can be two to four times more efficient than incandescent lights and compact fluorescents. Unlike flourescents, which are the most commonly installed in office buildings in the U.S. today, LED light bulbs contain no mercury.

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