According to clean energy communications and consulting firm Mercom Capital Group, venture capital funding for firms operating in the smart grid technology space went down to $405 million last year compared to the $434 million raised the year before, India Infoline News Service reported. However, there were 63 deals recorded in 2013 as opposed to only 40 deals done in 2012.

The Office of Electricity Delivery & Energy Reliability of the US defines a smart grid as a technology class that brings "utility electricity delivery systems into the 21st century, using computer-based remote control and animation."

The data was taken from Mercom Capital Group's 2013 report on funding and mergers and acquisitions activity for the smart grid sector. Total corporate financing, however, was higher at $579 million last year compared to the previous year when only $506 million was raised. There were 94 venture capital investors recorded last year with 12 of them actively joining in multiple transactions.

A total of $148 million recorded in 31 deals was recorded in the fourth quarter of last year. Nearly half of the transactions done last year were undertaken in the fourth quarter, the report said.

Mercom Capital Group Chief Executive Officer and Co-Founder Raj Prabhu was quoted in the report as saying, "Deal activity picked up towards the end of the year, and after a long pause, IPOs have made a comeback. After half a billion dollars of VC investments into home energy companies, the market is finally coalescing around connected home packages as convenience is seen as a better sell with consumers. A single vendor offering a bundle with cable, security, phone and other services and no upfront costs, has removed the barrier for these technologies to find their way into homes."

The report said home energy solutions provider and smart thermostat manufacturer Nest Labs was the top venture capital- funded company last year. Google Ventures and Venrock provided $80 million to Nest Labs and Google later acquired the firm in a deal valued at $3.2 billion, the report said.