News Article

CommScope acquires LED ethernet startup Redwood for $10M upfront, potential $50M down the road
Date: Aug 05, 2013
Author: Katie Fehrenbacher
Source: gigaOm ( click here to go to the source)

Featured firm in this article: Redwood Systems Inc of Fremont, CA

By Katie Fehrenbacher

Startup Redwood Systems, which makes networked LED management systems that run over ethernet cables, has been acquired for a modest sum, by broadband company CommScope.

Broadband infrastructure company CommScope has acquired Redwood Systems, a startup that makes LED management software, for $10 million in an upfront payment, plus an additional $50 million combination if Redwood Systems hits certain sales targets by the Summer of 2015. CommScope revealed the financial information in an S-1 filing late last week for its planned IPO, and news of the acquisition was first announced by Redwood Systems in early July (closed on July 3).

The exit isn't exactly a large one for Redwood's investors. The company raised close to $40 million from investors since it was launched five years ago — investors include Mitsui, Index Ventures, Battery Ventures, and U.S. Venture Partners.

Redwood Systems makes a control and sensor system for LEDs that runs over an optimized version of Ethernet cables. Redwood uses its optimized communications cables to send both a digital signal (zeros and ones of information) as well as power, and each LED fixture contains an embedded sensor that can monitor the environment of the room. The LEDs are then connected to the centralized Redwood computing engine.

Commercial building owners and data center operators have been using Redwood's LED system to cut the amount of lighting used throughout their buildings. In some cases the Redwood lighting system can cut lighting use by 70 percent over standard non-networked fluorescent lighting systems. Redwood has managed to bring in some high profile customers like SAP, Volkswagen, Johnson Controls and Facebook.

CommScope says it will use Redwood System's technology in its "intelligent building infrastructure solutions," and CommScope will be able to offer the LED management system of its own cabling.