Clean Urban Energy (CUE), a Chicago-based provider of energy storage and smart grid performance optimization technology, has secured $7 million in Series A financing, co-led by Battery Ventures and Rho Ventures.

With this funding, Jason Matlof from Battery Ventures  and Joshua Ruch from Rho Ventures will assume seats on CUE’s board of directors.

The funding will be utilized for rapid product development and a multi-city expansion within the United States. The company will embark on a road show fueling strategic development in four new major U.S. cities, including: New York, Los Angeles, San Francisco, and Houston.

CUE is a perfect example of smarter utility technologies, which are quickly becoming a significant new category of investment in cleantech, where energy efficiency meets mainstream IT, says Jason Matlof, Battery Ventures partner, in a statement.

CUE’s solution combines proven building physics, a robust hosted software analytics platform, and a SaaS (News - Alert) business model to deliver dramatic energy spending savings to commercial office buildings, Matlof added.

The SaaS platform is an automated, scalable, energy-optimization system that exploits the thermal mass of commercial office buildings to make buildings more energy efficient. By turning the “building into a battery,” CUE technology helps large commercial office buildings reduce building HVAC energy use and expenses by 15 – 30 percent, improve electric generation efficiency and environmental performance.

By aggregating and optimizing the thermal storage properties of multiple buildings, CUE unlocks valuable transmission and distribution capacity for utilities and grid operators in the most constrained environment: the urban city, the company said.

“This funding is an important and critical milestone for our business, and will enable us to accelerate product engineering and customer acquisition during this next phase of rapid growth,” said Rich Earley, CUE CEO, in a statement.

“The market knowledge and relationships that our new investors bring to the table will help us rapidly penetrate the property management and owner community to become a leading technology provider in the market,” Earley added.

“CUE represents a major milestone in the convergence of the cleantech and IT industries,” said Joshua Ruch, Rho Ventures managing partner. “With a compelling SaaS-based solution, CUE is delivering a new standard of electricity savings that uses a building’s thermal mass and delivers significant megawatt storage capacity to grid operators.”

Battery Ventures is a multi-stage investment firm focused on technology and innovation worldwide. Back in April, the firm announced that Google has acquired Cambridge, Mass.-based portfolio company ITA (News - Alert) Software.