Isra-Mart srl : Hara hails £15m funding round

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Businesses buying energy management software will increasingly demand one-stop-shop services to measure all four pillars of their environmental impact: energy, water, waste and carbon emissions.

That is the view of Nick Martin, EMEA managing director of software firm Hara, which yesterday announced it had secured $25m of investment in its largest funding round to date.

The funding round was backed by a host of high-profile investors, including Energy Technology Ventures – a joint venture of General Electric, NRG Energy and ConocoPhillips – ITOCHU Technology Ventures, Kleiner Perkins Caufield & Byers, and new backers Focus Ventures and Navitas Capital.

The investment marks the third round of funding for the energy management software specialist and takes its total investment to $45m.

Hara said it will now use the money to drive its global expansion plans, and accelerate the design of new products to meet growing demand from America's largest companies and government agencies.

The investment comes just a few months after Hara partnered with IT giant Hewlett Packard (HP) in a deal that will combine HP's new Energy and Sustainability Management (ESM) application and services suite with Hara's Environmental and Energy Management software.

Speaking to reporters in London last week, Martin predicted the fast-growing energy services market will consolidate over the next two to five years, with only software suites that offer a wide range of environmental and energy measurements surviving.

"If we look at the market today, there are 101 different software companies, thousands of consulting companies – many of which are very small," he said. "A lot of them have been focusing on the niche areas, such as water, waste, carbon or energy."

"Those that have lived on the back of Carbon Reduction Commitment reporting have probably had their day," he added, referring to the UK government's decision to retain any revenue raised in the reporting scheme, rather than recycle the money to the best-achieving companies. Many businesses claim the change has undermined the effectiveness of the scheme.

"Those that are focusing on the real savings that can be realised will be the ones that deliver the most value and succeed," he said.

Responding to questions from BusinessGreen on potential pitfalls for sustainability managers attempting to purchase environmental and energy management software, Martin said they should ensure they will see a return on investment.

"They need to make sure it is a robust offering with a strong business case," he advised. "I can't say that enough, because this is not just about aspiration. You've got to deliver value to the CFO and stakeholders, and value comes in the form of dollars.

"And don't just look at niche areas. You need to look at this holistically because the landscape is changing all the time, so somebody just focusing on one part of the equation might be missing the bigger opportunity."

His comments were echoed by Jay Allardyce, director of ESM growth initiatives at HP. Despite refusing to reveal details about any potential contracts for the new partnership, he said there was a significant pipeline of customers and added that the firms are now actively engaged with a number of major clients in Europe.

"What we're seeing with this market, as nascent as it is, is that there is a pit of educational awareness," he said. "People are rapidly moving to that enterprise view, so for us it's great position to help move companies in that direction as opposed to reacting after the market has moved."