- Delivering Alpha
- C3 IoT has raised $100 million from investors that include U2 singer Bono and movie mogul Jeff Skoll.
- C3 IoT was founded by billionaire Tom Siebel right before he was attacked by an elephant.
- As Siebel wheel-chaired himself to meetings, his company nearly died.
- He pivoted, restructured, and this round of funding is another triumph in the company’s come-back story.
If it’s true that it takes money to make money, then it’s no surprise that a startup called C3 IoT has investors drooling, even after its near catastrophic early days.
On Wednesday, C3 IoT announced it raised a $100 million round of funding from its existing investors including TPG Growth, Breyer Capital, Sutter Hill and its founder and CEO Tom Siebel.
That brings the total raised to nearly $243 million. C3 IoT didn’t say what the company’s current valuation is but at its last round, 10 months ago, it was worth $1.41 billion.
C3 IoT is a major second act for Siebel who’s last company, the self-titled Siebel Systems, made him a billionaire and cemented his name forever in the annals of enterprise software. Siebel was an early employee and top salesman at Oracle who parted ways with that company when its founder CEO Larry Ellison didn’t like Siebel’s idea for a new type of software. Siebel wanted to create software to help companies manage their interactions with customers.
So he founded his own company and invented a software market now known as customer relationship management, or CRM. When he grew it into a multi-billion dollar business, Ellison came back checkbook in hand, and bought the company in 2006 for $5.8 billion.
Not the only Oracle executive to see an opportunity
Interestingly, Marc Benioff, the billionaire founder of Salesforce, was inspired by Siebel’s success to create a CRM company while he, too, was an executive at Oracle. His idea was to build it as cloud software. In Benioff’s case, he left Oracle with Ellison’s blessing and $2 million of Ellison’s money as an angel investment. Not long after, Oracle launched its own CRM software and Benioff famously kicked Ellison off his board. When Oracle bought Siebel in 2006, the competitive antagonism heated up between the two frenemies and these days Ellison and Benioff are at complete loggerheads.
Meanwhile, Siebel took his earnings from the sale and became a philanthropist and investor. His investment company, First Virtual Group, funds everything from agriculture to real estate to tech.
But it was a charity effort around sustainable energy that helped birth the idea that would eventually become C3 IoT.
Siebel was thinking a lot about energy with his philanthropic effort Siebel Energy Institute when he decided to build software to help electric grids manage energy flows to homes. In 2009, he contacted several wealthy friends and raised $20 millions over a single weekend to found C3, kicking in $6 million of his own money, reports Forbes Alex Konrad. He hired former Siebel systems executive Patricia House as his CEO.
Beware of elephants
Nine months later, he was trampled by an elephant while on Safari in Africa, which badly injured him.
During a nearly two-year recovery, he attended meetings in a wheelchair, the Mercury News reported. By the time he was fully recovered, oil prices were in tatters from the global economic meltdown and energy companies were not buying software. C3 was nearly bankrupt, Siebel told Forbes.
But Siebel saw a way out: all the data that was captured from sensors in wind turbines and along the grid. He restructured the company, laid off 110 of 150 employees including many people he’d known his whole career. With the remaining team, mostly engineers, C3 spent two years re-writing its software to focus on collecting and analyzing data from sensors and industrial machines, just as companies were starting to invest in the Internet of Things (IoT).
He relaunched C3 as C3 IoT in 2016 and today, with Siebel as CEO and House as a board member, it counts organizations like the US Department of Defense, 3M, Pella, as well as energy companies as customers.
Part of the new $100 million investment was from The Rise Fund, a socially responsible fund managed by TPG’s Bill McGlashan and founded by U2 frontman Bono and movie mogul Jeff Skoll who produced “An Inconvenient Truth.”
Siebel plans to use the cash to expand into new industries and new countries.
Business Insider also named C3 IoT among the 51 startups to bet your career on in 2018.