GE buys Albeo to strengthen its position in the growing market for industrial LEDs.
KATHERINE TWEED: NOVEMBER 26, 2012
General Electric Lighting has signed an agreement to acquire the Boulder startup Albeo Technologies.
The purchase will help GE boost its ability to offer all-LED solutions to customers, especially in the area of industrial lighting. “This acquisition is a big boost for GE customers moving aggressively toward an all-LED building envelope in new construction and retrofits, including retail, commercial and industrial high-bay applications,” Maryrose Sylvester, president and CEO, GE Lighting, said in a statement.
Earlier this year, Albeo raised $8 million in a series C funding round. Albeo saw a 50-percent increase in revenue in 2011. Commercial and industrial sectors are moving more quickly toward LEDs than other sectors, with a significant increase in sales for many players in the market.
For cold storage and data centers, in particular, the payback is usually less than two years. Albeo works in one of the world’s ten largest data centers to provide an all-LED solution.
“Some of our biggest customers told us they wanted a GE-quality solution for high bay,” said Sylvester. “This acquisition accelerates our development of cutting-edge technologies that brings customers the energy-efficient solutions they need. That’s what customers get at the end of the day — a refined, highly modular and scalable platform that delivers the GE quality they’ve come to expect.”
For Albeo, the move to become part of GE allows it access to GE’s worldwide paths to market and huge research and development capabilities.
The announcement comes at the same time GE released a report on the “Industrial Internet,” which is essentially the networking of industrial machines, could add $10 trillion to $15 trillion to global GDP.
Lighting is a perfect example. In commercial buildings, lighting gobbles up 35 percent to 40 percent of electricity. With LEDs and controls, that figure can be vastly reduced. The savings are so great that, although cold storage and data centers have been early adopters, large office spaces and various other types of manufacturing and commercial operations are investigating LEDs.
A 2010 Enterprise LED Lighting report from Groom Energy and GTM Research also found that the market for LEDs in parking garages should start to mature going into 2012. “GE is making a statement that they need to broaden their product offering faster, and Albeo fits into a category where they didn’t have a competitive LED product [in the] high bay [category],” said Jon Guerster, CEO of Groom Energy Solutions and the report author. “This is an early industry, developing at a rapid pace, and consolidation is to be expected.”
Outside of commercial and industrial applications, the interest is still nascent. There will be some groundwork laid in 2012, but GTM Research and Groom Energy see the period of 2013 to 2015 as the breakout years for those markets.
Earlier this year, Jeff Bisberg, CEO of Albeo, told Greentech Media that the LED market was wide and there would be a lot of winners. For Albeo, the market just got a whole lot bigger.
While there will likely be more consolidation in the fixture market, Guerster said to keep an eye out for large incumbents, like GE, acquiring an LED chip company. “That would be a much bigger statement about how serious they are about the LED lighting market.”