Friday, September 7, 2007
Thursday, September 6, 2007
- Expansion Capital Partners is announcing today (will provide a link when we have one) that they have closed their Clean Technology Fund II at more than $100mm. To all my former colleagues at Expansion Capital, many congrats!!
- CPV developer SolFocus announced $52mm in new funding this week, and they may not be done pulling together what could be a $70mm round when completed. According to PE Week Wire, $27.4mm of the new financing is targeted at launching a new Spanish subsidiary, and $24.6mm is Series B financing into the parent company. Insider NEA led the round again, with participation by Moser Baer India, Metasystem Group, NGEN Partners, Yellowstone Capital, David Gelbaum, and other investors. SolFocus also recently acquired a Spanish tracker company, Inspira.
- Also according to PEWW, secretive solar startup Sierra Nevada Solar has raised $4.5mm in financing. AlarmClock reports that the financing was provided by EarthBright, a San Francisco-based cleantech investment group funded and led by Jonathan Bonanno, chairman of the Cleantech Investment Committee of the Keiretsu Forum, as well as angel investor Ryan Scott.
- Plextronics, which is developing organic PV cells, OLEDs and RFID technology, has raised $20.6mm in Series B financing -- Matt Marshall has details. Strategic investor Solvay Group led the round, which included participation by Firelake Capital, Birchmere Ventures, Draper Triangle Ventures, and Newlin Investment Company. The round brings the total investment raised by the company to $37mm over the last five years.
- Jonathan Shieber in today's Clean Technology Investor has an interesting column about the birth of Fisker Automotive Inc., a new plug-in hybrid vehicle startup with plans to introduce a four-door car in 2009. Shieber reports that the company, which has been founded by car designer Henrik Fisker and Quantum Fuel Systems CEO Alan Niedzwiecke (they met during the course of a used car transaction), is looking for outside capital -- and they estimate they'll need $100mm over several rounds to make a go of it. Interesting benchmark for EV and related startups... Of course, the obvious question is: What was an auto designer doing buying a used Land Rover, shouldn't he be driving around in some fancy prototype?
- Also according to Shieber (this time in VWire), BC-based General Fusion has raised $1.2mm in seed financing to pursue the commercialization of the company's small fusion reactor technology. We briefly mentioned fusion in passing last week, alluding to the fact that General Fusion isn't alone in pursuing the commercialization of "hot" fusion approaches. If one of the entrepreneurial teams driving toward this goal could achieve "net positive" energy from any of these approaches, it would potentially be a big game-changer... There is more info in this interesting article about Canadian clean tech ("the sexiest area of the North American venture-capital world"), including hints that the company may be looking to raise additional capital.
- UK-based Solarcentury has raised a GBP13.5mm round of financing, co-led by zouk ventures and Good Energies. Vantania Holdings Ltd and Foursome Investments, along with existing investors VantagePoint Venture Partners and Scottish and Southern Energy, also participated.
- PEWW also broke the news that fuel cell backup power system ClearEdge Power has raised $6.47mm of an anticipated $19.47mm Series C. Applied Ventures is mentioned as an investor.
- Climate Change Capital, a private equity firm based in the UK, has closed on a $200mm Climate Change Capital Private Equity Fund, which will invest in expansion-stage startups all the way up to buyouts.
- CTI also reported this week that Terrabon, a cellulosic ethanol technology developer, has raised $1.25mm in seed financing, bringing their total investment from "individual investors" up to $4.5mm.
- PEWW reported last week that PV startup Solexant (with technology to "harvest energy from the entire solar spectrum") has raised a $4.3mm Series A, with backing from Trident Capital, Firelake Capital, and X/Seed Capital.
Tuesday, September 4, 2007
Because today we're very proud to announce that Cleantech Investing and Greentech Media are joining forces. I'll also personally be joining Greentech Media's Advisory Board.
We're very excited about the move. Greentech Media is launching a phenomenal one-stop-shopping news site for all things clean and green, and it's a great opportunity to team up with Scott and Rick and Eric and Jennifer and all the other folks at GTM.
C-I started out two and a half years ago on somewhat of a whim, as an attempt to capture some of the day to day developments in the fast-emerging cleantech venture investment sector, pretty much just for friends and family. Since then, the sector has exploded, and news now comes out so often and so rapidly that one busy investor working in his spare time can't possibly capture it all anymore. It never helped, either, that yours truly is not much of a web design expert... So when the opportunity came up to collaborate with a world-class online media team like GTM's, it just made a lot of sense. The experience of the GTM team, and the resources we'll be able to collectively focus on what's happening in the sector, will be invaluable for making sure C-I continues to be a useful resource.
But I'm also pleased to note that I'll continue to be the primary author of this site going forward, albeit with a lot more help/collaboration. It's been surprising (nay, shocking) to me for some time now just how many people have been reading the quickly jotted-down notes and thoughts of a modest venture investor every few days. Subscribers to the RSS feed, for instance, have pretty much been doubling every six months since the beginning of last year. It's been a lot of fun, and it'll be even more fun to be doing it as part of such a strong team. Look for even better content and a much better setup from this partnership, in other words...
During the post-launch period, we'll eventually bring all the past content and ongoing posts over to the new home on the GTM site on a permanent basis. In doing so, we'll work to make sure that however you may have been coming to C-I in the past, whether via RSS reader or daily email or directly via cleantechvc.com, it'll be a seamless transition for you. And now it'll also be easy for you to go from C-I right over to the main GTM site to learn more about anything related to cleantech you may be looking for.
As always, if you have any comments or questions (or especially business plans...), don't hesitate to contact me at firstname.lastname@example.org. Thanks for reading!
[PS: For you reporters out there, don't bother to ask... "terms of the transaction were not disclosed."]
Thursday, August 30, 2007
There are around 200,000 gas stations across the United States, but only 750 biodiesel refueling stations and 1,200 E85 refueling stations. And most of these locations aren't convenient or accessible to most drivers. As automakers bring clean diesel autos and flex fuel vehicles to market, and as venture-backed biofuels producers ramp up their volumes, the ability of most Americans to easily find locations to fuel their cars with biofuels remains a huge bottleneck in the market's development.
Propel's BDS Unit directly addresses these challenges, with a low-risk, no-upfront capital system for independent gas station owners, green-minded retailers and others who want to offer biofuel choices to their customers.
Tuesday, August 28, 2007
- Well-known energy tech venture firm EnerTech Capital has raised a $75mm first close toward a $250mm targeted third fund, according to VentureWire today. LPs include CalPERS, Dow Ventures, Kuwait Petroleum, and Masdar. Another LP, Acorn Factor, a publicly-traded investment group, expects to be occasionally co-investing with EnerTech on their expansion-stage energy deals.
- Jonathan Shieber reported in Friday's CTI that Secure Energy Inc. has raised $5.5mm of a targeted $8mm round of financing. Secure Energy is converting a Caterpillar manufacturing site in Decatur, IL into a coal gasification plant.
- PE Week Wire reported on Monday that tire / oil / etc. recycler Reklaim has raised $7mm of a $10mm Series B, led by Goldman Sachs.
- VWire reported on Friday that UK-based Thermilate, which sells a paint additive with insulative benefits, has raised a $1.5mm round of financing, with participation by Enterprise Ventures on behalf of the Coalfields Enterprise Fund.
- In the continued pursuit of a strong New England cleantech cluster, Xconomy is reporting that the New England Energy Innovation Collaborative (NEEIC) and the newly-formed Clean Energy Council will be joining forces. [note: my firm @Ventures is a member of NEEIC, and I'm on the advisory board for the CEC] Speaking of the NE cleantech cluster, here's a nice profile of GreatPoint.
- Cleantech investors in the news: Ray Rothrock lays out Venrock's investment strategy in "new electrons".
Clean Energy Entrepreneurship Two-For-One on September 11!
Foley Hoag (www.foleyhoag.com) has graciously offered to host and sponsor at their
If you are attending the MITEF ESIG Event, please register at the MITEF website (http://www.mitforumcambridge.org/EnergySIG/energysept07.html)
If you plan to attend ONLY the REBN-East Networking Event, please RSVP to Rob at email@example.com.
And, as always, please forward this invitation to any of your renewable energy research and business colleagues that you think might be interested!
REBN-East, the MITEF Energy Special Interest Group, and the
4:30 – 6:30: MITEF Energy SIG Tech-In Program #1: US Army
6:30 on: REBN-East Happy Hour
Do you want to start a clean energy company, but don’t know where the market opportunity lies? Do you have an interesting clean energy technology but are looking for new markets where it might be used? Do you want to enter your exciting new technology in the 2008 Ignite Clean Energy Competition but don’t know what product to target first? The Energy Special Interest Group at the MIT Enterprise Forum of Cambridge is pleased to present its fourth year of programming, which will be focused on Market Pull.
For our first event of the year on September 11, 2007, several Team Leaders from the US Army Labs at
(1) Lightweight energy sources for individual warfighters;
(2) Energy sources for unit organizations/collective protection including high efficiency lighting and field photovoltaics;
(3) Combat Feeding Equipment and System Energy Sources; and
(4) Propulsion and power sources for individual Warfighter robotic applications (SUAV)
· Dr. Lynne Samuelson, Chief Scientist, Office of the Director
· Mr. Don Pickard – DoD Combat Feeding Directorate, "Combat Feeding Equipment and System Energy Sources."
· Mr. Steve Tucker, Shelter Technology, Engineering & Fabrication Directorate, and Barry DeCristofano, Lead for the E-textiles program, "Flexible Photovoltaics," (power shades, battery chargers, etc.)
· Mr. Kailash Shukla, Technology, Systems & Program Integration Directorate, "Soldier Power Needs."
Our presenters will also discuss how to work with these labs to develop the technology they want and need.
This event is a joint program with the
The MITEF Energy SIG events are made possible by the Massachusetts Technology Collaborative (MTC).
Thursday, August 23, 2007
At the conference organizers' suggestion, we're launching a "Cleantech Photo Caption Contest"!
Below are three pictures that might inspire you -- you can pick any of the three that you like. Simply pick one of the three, come up with a funny caption (15 words or less), and email it to me by the end of the day, Thursday August 30th. Make sure you indicate which picture you're captioning! And you can submit as many entries as you want.
Two winning captions will be selected by yours truly and the SRI team. Judging will be totally subjective (this is a VC site, after all), but generally speaking points will be awarded for humor, topicality, and brevity, in that order. Make sure your entry is something that you wouldn't mind having your name attached to in public...
Photo #1: Solar-powered robot
Photo #2: Fuel
Photo #3: Al and Sir Richard
Each winner will receive a free ticket to the 4th Annual Energy Tech Investor Conference (value of $1,595 each), which is taking place October 3-4 in San Jose. It should be a good networking opportunity. Dan Reicher (Google.org's new Director of Climate Change & Energy Initiatives) will be keynoting, and the lineup includes many other cleantech industry luminaries (see the agenda -- more details can be found at the conference website).
So make us laugh!
And for everyone else who doesn't win, the organizers have kindly extended a discount to Cleantech Investing readers. CLICK HERE to register using this discount, and enter the code ENERGYTECH300 when you do.
Tuesday, August 21, 2007
First of all, taxpaying readers will be pleased to know that the DoE is not spending any money on free lunches, drinks or coffee for venture capitalists; or on brightly colored wall paint or floor tiles in the indomitably beige corridors; or even on wall decorations of any kind (except for repeated instances of posters featuring perhaps the weirdest Hollywood cross-promotion ever: a rat from a recent Disney movie holding up a compact fluorescent bulb and wearing a big grin, urging people to replace their incandescents, the relationship between rats and CFLs remaining somewhat unexplained...). What budgets are made available to the Department are going only into productive research, clearly!
Secondly, what is also clear so far is that recent efforts in the EERE group to drive commercialization are having some immediately positive effects, as evidenced by the strong presentations by researchers. The first day was very informative, with a lot of great market and cost data in key research areas like solar and biofuels. And the technologies presented as available for commercialization, while necessarily just a flavor of the overall volume of research being undertaken, show a thoughtful recognition of the realities both of the market and of technology needs on the ground. It was a very strong performance and hopefully a good jump-start in turning some of these needed technologies into new entrepreneurial efforts toward broad market adoption.
Amidst all the ongoing debate about governmental policies and broader positions on energy and environmental issues, this event by the EERE group has done a lot to bring together clean energy technologists and potential financial backers, and will hopefully become a regular event.
Making news today is the public announcement that The Cleantech Group (parents of the Cleantech Venture Network) has acquired Inside Greentech. The merged groups will launch a new cleantech media effort, Cleantech.com, with Inside Greentech's Dallas Kachan heading up the group.
Congratulations to both groups, it's a great match and (as I'm quoted suggesting in Inside Greentech's announcing article) a great indication that cleantech is continuing to capture investor and business leader interest. Enough to support multiple media efforts covering the sector, at least. Neal Dikeman had a very good post today recapping much of the recent ramp-up in green tech media activity.
More to follow as this fast-emerging space continues to evolve.
Final note on the day: Even two years after Katrina, the revitalization efforts continue. This effort to marry rebuilding efforts and green building technologies is worth noting...
Monday, August 20, 2007
- Not sure who posted it first, PE Hub or VWire, but the news came out at the end of last week that Venture Vehicles has raised a $6mm Series A led by NGEN and including DVC Technologies NV. The company's first concept vehicle, with a design licensed from Carver Engineering (a subsidiary of DVC), is a tilting three-wheeler that they say will be able to go zero to 60 in 6 seconds, hit a top speed of 100mph, get mileage of 100mpg, and cost less than $20k.
- Today Dan Primack at PE Hub scooped that Phoenix Motorcars is close to raising a $15mm Series A including funding by Kleiner Perkins, Virgin Fuels and AES Corp. Pre-money valuation is said to be "anywhere from $10 million to $20 million".
- Jonathan Shieber at VWire broke the news Friday that Craton Equity Partners, a first-time fund in southern California, has raised over $120mm of a targeted $250mm fund.
- Energy efficiency continues to be hot: Efficient lighting equipment manufacturer Orion Energy Systems has filed for an $100mm IPO. [Self-promotion alert: Orion has been backed by Expansion Capital Partners and others]
- Two more scoops by VWire: 1. "Green drywall" developer Serious Materials has around half of a $40-50mm round of financing soft-circled, according to the CEO, although they are still "trying to lock down the lead". The company is tracking toward revenues well north of $20mm in 2007, and took in a $5.5mm first round of financing in 2006. 2. News came out on Monday that algae-to-biofuels developer Inventure Chemical raised an undisclosed amount of Series A financing -- VWire reported that the size of the round was $2mm and that Cedar Grove Investments, Brighton Jones Wealth Management and angel investors provided the funding.
Wednesday, August 15, 2007
- Tech Confidential is reporting that CIGS startup HelioVolt has raised a $
7877mm Series B. According to the site, a first close has been completed and a second close is expected later this month. Investors in this round are said by HelioVolt's PR folks to include "A DC investment firm", "A Middle Eastern clean tech fund managing $100B worth of investments", and "a multi-billion dollar company in Spain". Readers can fill in the blanks (or just wait until tomorrow's PR if you can't guess already). NEA had led the company's previous $8mm Series A... Tech Confidential speculates that HelioVolt is now positioned to be the first of the many CIGS players to actually get product to market, but they're just speculating. [8/15 note: Corrected the size of the round as requested by the company's representatives] Meanwhile, Kevin Bullis writes in the Technology Review that silicon ain't dead quite yet.
- Metrolight, which has developed advanced ballasts for more efficient use of high-intensity discharge (HID) lights for high-bay (ie: warehouses), outdoor and other lighting applications, has raised a $9mm round of financing co-led by Virgin Fuels, and including Gemini Israel Funds, Israel Cleantech Ventures, and Alshuler Shaham Ltd. The company is based in Israel, but will be using the funds for more market push into the U.S. and Europe.
- Velocity Venture Capital, a Sacramento-area venture firm with $10mm under management, has made their largest ever investment in fuel cell developer Jadoo. The total amount of the round and any other funders weren't disclosed -- as far as Velocity's portion, they invest $100k to $1mm per company. Jadoo had previously raised an $11mm Series B in 2005, including investments by MDV, Venrock, and strategic investor Sinclair Broadcasting Group.
- Touting a newly-discovered ethanol-producing bug called the Q Microbe, SunEthanol has raised a Series A (VWire describes it as "under $5 million") from strategic investor VeraSun and financial investors Battery Ventures, Long River Ventures and AST Capital. The bug in question has the ability to both break down cellulose and produce ethanol, in one step. And, notably, it's the result of research carved out of the University of Massachusetts (UMass and Jattra Ventures also appear to have stakes in the company). Read more on cellulosic ethanol here.
- According to today's Venture Wire, Verdant Power is looking to raise a $20-30mm Series B round of financing. We mentioned them yesterday, when their challenges and progress were profiled in the NYT...
- According to PE Week Wire, Cambridge's Rive Technology has topped off their Series A with $3.15mm from Advanced Technology Ventures. The company had previously raised $5.22mm in the round back in June of last year, with financing from Charles River Ventures and seed funders. The company's advanced catalyst technology is used in petrochem refining.
- Congrats to Flagship Ventures' David Berry for being named Technology Review's Top Young Innovator for 2007!
Tuesday, August 14, 2007
- PE Week Wire reported on Monday that AltaRock Energy, a stealth-mode enhanced geothermal systems (EGS) developer out of the Seattle area, raised a Series A from Khosla, Kleiner and existing seed investor Aaron Mandell of GreatPoint. VentureWire today added in that an investment group affiliated with Dundee Securities provided funding as well, and VWire discussed several other geothermal-related startups that have received capital infusions lately, including Western GeoPower and Vulcan Power. Experts agree there are a lot of untapped geothermal resources out there. But geothermal startups are currently most often project-specific efforts using existing tech instead of new tech development groups, so it's always a bit tricky to see how VCs best get involved in the sector. With a clear market opportunity and hundreds of existing patents and applications covering geothermal technologies, perhaps that will change over time, but slow adoption rates and high capital intensity will continue to provide a bit of a damper as well... Here are some recent presentations on EGS out of MIT (including one by AltaRock founder Susan Petty).
Other news and notes: An intriguing market-based policy proposal to promote faster adoption of new energy techs (hat tip to Eric "Enrico" Engstrom for the heads up on this one)... More follow-up on the Massachusetts cleantech cluster... Joel has an interesting column on the information aspects of the clean water challenge -- and meanwhile the bottled water debate heats up... More developments in biodiesel... An interesting interview with Paul Cook, founder of Raychem... Finally, this cleantech innovation stuff isn't as easy as it might look -- and once again we are reminded that VCs will play only a very small role in the funding of new innovations and market solutions.
Saturday, August 11, 2007
- Matthew Richards of the local TiE clean energy special interest group has organized what sounds like a very fun networking day-cruise to tour Hull Wind 1, a large local wind turbine site. From Matthew:
Sign up now for a tour of the Hull Wind turbine, featuring a catered lunch on a YACHT as we sail to Hull!
The cost for this event is $60, and the only additional cost is $1 to park at Quincy Terminal. We leave at 12pm, and dock back in Quincy Terminal at 3:15pm. Do not miss this opportunity!
DATE: Tuesday, August 28, 2007, from 12pm – 3:15pm
TO REGISTER: go to http://boston.tie.org
- We’re very pleased to announce that Foley Hoag (www.foleyhoag.com) has graciously offered to host and sponsor the next Renewable Energy Business Network event at their Emerging Enterprise Center in Waltham. The event will be the same informal format as our previous get-togethers, each of which had over 80 attendees, so bring your business cards and your elevator pitches, all are welcome…
REBN-East Happy Hour:
September 11, 2007, 6:30pm.
Hosted and sponsored by Foley Hoag.
Location: Emerging Enterprise Center at Foley Hoag, 1000 Winter Street, Waltham MA
- Daylighting system developer Solatube raised an undisclosed amount of "mezzanine funding" from Praesidian Capital. Dow Jones' Clean Technology Investor pegged the round as a $6mm debt financing.
- According to PE Week Wire, Silicon Genesis Corp, a developer of engineered substrate process technology for the semiconductor, display, optoelectronics, and notably for kerf-free silicon wafers for solar markets, has raised a $23mm round of financing. From PEWW: "Backers include H&A Asia Pacific, Lake Street Capital, Riverside Management Group, Firsthand Technology Ventures, Convexa Capital Ventures and Spencer Energy AS. Silicon Genesis has raised over $117 million in total VC funding, but this represents its first round since a 2001 infusion of $35 million at a post-money valuation of approximately $166 million."
- Cleantech investors in the news: Here's a nice profile of the role being played by Chevron Technology Ventures.
AltEnergyStocks had a very good overview of the opportunities available in large-scale electricity storage... The WBCSD had a nice take on the opportunities and challenges of cellulosic ethanol... And a recent report suggests thin-film solar will be a $7.2B industry by 2015... Here's a good example of the kind of applications for distributed sensor networks that would have been useful to have put in place years ago ("If bridges are a priority", then let's take spending away from other critical infrastructure and energy tech development needs in order to monitor them? Umm, maybe it really shouldn't be either/or...)... Do business travelers care about being green?... "You will never drive a hydrogen car"... But if you drive a biodiesel car, the byproducts may have some useful applications as well... Nathanael Greene points us to the Daily Show's hilarious send-up of the Cape Wind controversy... So I guess the next logical step would be paying people to walk around (hat tip to Matt Lecar of Trinity Ventures for this one)... Finally, deus ex nucleara?
The "Clean Energy Census Report 2007" illustrates the importance of the clean energy industry to the local economy, with over 14,000 workers already employed by the industry, and with industry-wide growth rates far exceeding those of other top local economic sectors. They track 116 local clean energy companies that have been founded since 2001, and as a sign of the entrepreneurial nature of the industry, they found that over half of the 556 local clean energy companies tracked have less than 5 employees.
There's also some evidence of what some local cleantech investors have anecdotally pointed to as a surprising relative lack of investment opportunities in the area, given all of the world-class energy- and water-tech research that is being done locally. To be clear, it's not that the region lacks for cleantech entrepreneurial activity -- in addition to the MTC data above, the Cleantech Venture Network's Q1 2007 figures show that 14 out of 64 (22%) North American cleantech deals tracked that quarter were in the Northeast, for over $120mm in funding (17% of the total). But the sense is that, given all the local expertise and research, there should be even MORE activity. Even though the MTC tracked 116 clean energy companies formed since 2001, that's still less than 20 companies a year.
The MTC data points to a few potential chokepoints:
- The report suggests that local cleantech companies' focus on local revenues is a potential hindrance. Indeed, out of about $165mm in tracked clean energy company revenue (itself a relatively low figure), $69mm of that was derived from Massachusetts customers. Less than $7mm was in exported products overseas. Exports are an indication of regional competitiveness, and export assistance is often an important policy driver for regional economic growth.
- Furthermore, many of the companies tracked by the report are very small -- 105 out of 173 companies that shared their revenues had less than $1mm. This is both encouraging and challenging. It's encouraging that there are so many early-stage startups, but as with the point about local revenue above, it points to the "chicken and egg" problem that a local clean energy ecosystem needs to somehow get jump-started. Because clean energy companies will sell to other clean energy companies, and partner with other clean energy companies. As happened with IT and software and biotech and other sectors, you need some of these companies to grow to a big enough scale that they can support the development of their vendors and partners.
- The report didn't break out type of company other than to bucket them across the categories of Renewable Energy (generation techs like solar, etc.), Energy Efficiency, Consulting and Support (legal services, etc.), and University Research. What isn't clear is what portion of these entities are actually developing technologies and products, which are installers and other service companies, and which are project developers. That's a difficult categorization challenge, but it's important from a venture capital perspective, since technology and product development tend to lend themselves to that capital category much more easily than services and project development. It would be very interesting to try to compare relative levels of tech/product development enterprises for Massachusetts versus California.
- For whatever reason, only a small portion of clean energy startups in the region are receiving venture capital financing. Venture capital is always only a small portion of the overall financing sources for startups in any case. But it's notable that less than 10% of the companies that shared their source of financing in the MTC report described it as "venture capital". It's hard to tell if this is a symptom or a cause...
- Perhaps most tellingly, federal support for Massachusetts clean energy companies appears to be very low. Only 14% of startups listed "grants" as their primary source of startup financing, and it's unclear how much if any of these grants were from federal sources. And only $3mm in revenue (out of the $165mm) was identified as coming from Washington DC or the Federal Government. Given all the world-class research being done here, these seem to be awfully low figures.
- While the Massachusetts state government has been actively working to fix the perception that the state hasn't been supportive of the local clean energy industry, it still should be noted that a plurality of respondents both in this report and in the 2004 "Creating the California Cleantech Cluster" report indicated that California is the most supportive/ attractive region for clean energy businesses, with Mass only a distant second.
This last point is the lament of local clean energy pundit Bill Aulet, who wrote a thoughtful column recently for Xconomy.com suggesting that a big problem for the local clean energy economy is the focus on developing very future-looking renewable energy technologies without big markets today (he describes it as "majoring in minors"), instead of developing incremental improvements on today's energy technologies. The column has prompted a lot of thoughtful comments on the Xconomy.com site that are also worth reading. (Also: hat tip to Wade Roush of Xconomy, and to Bill, for pointing to the MTC report and bringing this topic to my attention)
Any question about whether we need one or the other type of technology development misses the point -- we need BOTH. And more of it. Bill's replies to the commenters indicates he agrees.
For myself, as a recent transplant to Massachusetts from San Francisco, the major difference appears to be in the pool of ready entrepreneurs. Namely, that in Massachusetts there don't seem to be as many entrepreneurs out of IT and other sectors that are re-purposing themselves to make cleantech their next big thing. That kind of dynamic has been critical to the recent upswing of cleantech startup activity in California, because it has driven a very rapid infusion of proven startup managerial talent into the industry.
There aren't any surveys or other hard data to make this point, but there's one telling piece of anecdotal evidence: The California Renewable Energy Business Network (REBN) events of last year were full of IT entrepreneurs who came to the events to try to network and learn and position themselves to jump into a new effort in the space. The REBN-East events we have held this year in the Boston area have had even more interest and higher attendance -- but the crowd has been mostly businesspeople already involved in cleantech, and a whole lot of venture investors.
So in other words, the biggest takeaway from the MTC report and from other anecdotal evidence is clear: If you are a pragmatic New England entrepreneur or proven business grower with an interest in cleantech, now's your best chance to get into the sector. The local governments are looking for excuses to support local efforts. Much of that local world-class research is available for technology transfers into startups, with university professionals eager to help find productive homes for the innovations, targeting both future-looking and near-term markets. The regional industry is poised for a rapid growth period. And we check-writers are eager, ready and willing...
8/13 update: I've already had a few Massachusetts-area entrepreneurs ping me to try to get some ideas as to how to get started... Here are a few links that should be useful (other submissions are welcomed as well, just shoot me an email and I'll try to keep this page fresh):
- The Renewable Energy Business Network (REBN) has been pulling together informal networking events for renewable energy researchers, businesspeople, and those who want to make the connection between the two... Join the listserv at the group website to learn about future events, and from the website you can also join the LinkedIn group for making direct connections with possible business partners.
- The New England Energy Innovation Collaborative (NEEIC) is a major cluster-creation effort that -- in addition to a lot of other great things -- has been particularly working to drive entrepreneurial activities out of local research efforts.
- The Boston regional TiE chapter has formed a CleanTech & Energy special interest group, and regularly provides networking and content events for members.
- The Massachusetts Technology Transfer Center's Technology Portal is a good place to start looking.
- Harvard's tech transfer search site.
- MIT's tech transfer search site.
Saturday, August 4, 2007
- Group IV Semiconductor, which is developing quantum dot-based LEDs for efficient lighting, raised a Series B (note: link opens pdf) led by Garage Technology Ventures Canada, and including Applied Ventures and existing investors Khosla Ventures and BDC Venture Capital. The amount of the round was undisclosed, but VWire reports that the round was bigger than the C$9.1mm Series A the company raised in 2006.
- BridgeLux, another developer of LED technology, raised a $23mm Series C, according to VentureWire. Chrysalix led the round, and they were joined by VantagePoint, and existing investors DCM, El Dorado Ventures, and Harris & Harris Group.
- Clear Water Compliance Services, which sells systems for cleaning storm water runoff, announced a $25mm controlling investment by Plainfield Asset Management -- $5mm in equity and the rest in debt.
- Also according to VentureWire, Advanced Technology Ventures has closed on at least $272mm for their eighth fund. VWire didn't describe if that was a final closing amount.
Tuesday, July 31, 2007
The fascinating thing about this question is how much of a moving target it really is. Even just a few months ago, for example, we might have included service offerings like solar financing plays as something VCs likely wouldn't invest in, because of the lack of defensible intellectual property and low barriers to entry (very generally speaking, of course). Now it's one of the hottest investment areas, as the rapidly-growing solar market has led to expectations that the market can support multiple "winners". Low-tech plays in biofuels and other hot sectors have been getting plenty of capital, too, even if not always from VCs (although, sometimes...).
So what's out of bounds? The very fact that this question is being seriously asked reflects a rapid expansion of investor appetite that is at the heart of the recent concerns about a cleantech venture capital "bubble", as we've discussed before. And, as we've described on this question, while there doesn't appear to be any "bubble" across the entire sector, certain subsectors and market niches can certainly feel frothy. Among other factors is the simple truth that not all "hot" investment areas will end up providing the returns some investors are currently expecting, so philanthropists can't consider a societal problem solved just because VCs are putting early money into potential solutions...
So Carla, my two cents' worth as of this moment in time would be: Put your money into the demand side of the market.
In other words, VCs and other institutional investors (project finance, public markets, etc.), not to mention government and academic research efforts, seem to be very happy to put money into the supply side, funding a rapidly growing list of cleantech technologies and services. I hesitate to nominate any particular technology or service sectors as being out of bounds for VCs, because that answer will continue to change as market conditions (and investor optimism) change. But without the anticipated growth in demand for these products and services, a lot of these investments will inevitably fall flat.
Water tech is a great example: There are some great technology development efforts underway that would clean up the water we drink and the wastewater we create, but the most likely buyers aren't buying. And there are a lot of energy efficiency options out there for homeowners and commercial/industrial building owners that make stunning financial sense, and yet still haven't been widely adopted like you'd expect. There are major segments of most clean/green technology markets that VCs and others still aren't putting their money into, but most of those un-addressed value chain segments tend to be downstream.
The most important thing philanthropists could do, in other words, would be to prime the engine of clean technology market adoption. Instead of catalyzing technology development, catalyze market development. Fund adoption of clean drinking water and solar and other distributed energy techs in emerging economies. Educate U.S. water and electric utilities (and their regulators) about the various new choices available, and how they can provide compelling economics and better quality at the same time. Be an angel investor for a local energy efficiency consultancy or green home product distributor. And help consumers understand their green and clean choices, empowering them to actually adopt the solutions that are in their best interest, but that they either don't know about or don't realize the economics around.
And thanks to Carla for asking a great question -- there are probably a lot of great ways philanthropists and investors can work together "profitably", by both sides' definition of the word...
Readers are encouraged to add their own comments and suggestions for Carla as well.
A couple of recently announced deals to note:
- Cnano Technology, which is developing low-cost carbon nanotubes for a variety of applications (including some related to cleantech), announced a $6mm round of financing. The funding was co-led by CMEA Ventures and Pangaea Ventures, and also included WI Harper.
- HaloSource, a developer of antimicrobial coatings and drinking water treatment products, has raised a $15mm round of financing (VWire identified it as a Series C) from the Masdar Clean Tech Fund. The company's products are aimed at the developing economies.
- Sierra Solar Power, a thin film PV startup, has raised a $6.86mm Series A led by GSR Ventures, according to PE Week Wire. They also appear to be in active recruitment mode.
- Seems we missed the announcement of Craton's two-tranched $5mm Series A into "green concrete" startup GigaCrete. The funding was completed a while ago, but we didn't want to post it until it was publicly mentioned. Apparently, we whiffed on it when it was...
Other news and notes: In case you missed it last week, Neal Dikeman had a very interesting scoop about IBM and their solar plans... Coal power already becoming obsolete?... Joel on the current state of "green business"... Ladies and gentlemen, your 2007 California Clean Tech Open finalists... Finally, Jack Bauer, eco-hero?
Wednesday, July 25, 2007
- The big deal so far this week is Solaria's $50mm Series C, led by Q-Cells and including existing investors Sigma Partners, NGEN and Moser Baer. In the deal, Solaria also gains access to 1.35 gigawatts worth of Q-Cells' PV cells to be used in Solaria panels over the next ten years. The slowness of high-profile CIGS and other thin film PV startups to get into the market has meant that the competition for silicon wafers and silicon-based cells is about as hot as it can get right now.
- Cambridge, MA's LiquidPiston announced a $1.25mm seed round from Adams Capital Management and Northwater Capital. The company is developing an advanced "high efficiency hybrid cycle" engine. We've talked before about the challenges of investing in advanced engine technologies.
- Cleantech investors in the news: Good Energies is expanding their U.S. operations, opening up new offices in NYC and Washington, DC, according to VentureWire. With $5B in assets under management globally, Good Energies has been ramping up their cleantech investing efforts significantly lately -- the VWire column mentioned portfolio companies Ice Energy, SAGE Electrochromics, Konarka, Renewable Energy Corp and the aforementioned Q-Cells (since Good Energies holds about 50% of Q-Cells, read the above notice about the Solaria investment accordingly...)... Also, here's a very good article on the important role of angel investors, using a cleantech example.
Friday, July 20, 2007
Many of the leading local VC firms are taking an interest and getting involved through great efforts like NEEIC, and beyond the VC/ entrepreneur end of the market there's been an increase in regional efforts to build a stronger overall "clean energy community". And of course, there's the world-class research being done at the various local universities and other research centers...
Last night's REBN-East event was another good example -- a new high for attendance, and perhaps most impressive was the number of venture investors that were able to come out. Thanks again to Flagship Ventures for kindly sponsoring the event (Dan Primack also mentioned the event on PE Week Wire today -- read his take, and his interesting commentary on the current state of the cleantech sector here). [7/21 update: Wade Roush at Xconomy also had a nice write-up worth checking out here]
Cleantech and related deals:
- Eka Systems, a wireless mesh AMR developer, raised a round of financing (PEWW reports it as a $12.5mm Series C), led by Angeleno Group and RockPort, with participation from existing non-institutional investors. We've discussed the cleantech applications of AMR here before.
- As also reported in PEWW, GreenDimes, which works to reduce postal junk mail, has raised a $20.5mm Series A led by Tudor Investment Corporation. The company claims to have stopped over a million pounds of junk mail to date.
- They fit into the overall "energy resources are becoming scarce" investment thesis, but are they cleantech? Readers are invited to draw their own judgments on that question (comments are always welcomed), but here are two deals that are certainly worth noting regardless of how they're classified: DynaPump earlier this week raised a $12mm Series C led by Element and including NGP Energy Technology Partners and existing investor CTTV Investments (Chevron's tech venture arm)... And thanks to Ben Kuo for bringing to my attention that Kleiner Perkins has apparently invested in GloriOil... Both DynaPump and GloriOil have technologies for enhancing oil recovery from existing oil wells.
Other news and notes: Battery and fuel cell market growth is driving an increase in demand for core materials... A hot topic of conversation is the intriguing controversy over Planktos... What's in the box?... Finally, theoretical economics rarely intersects with venture capital, but for those of us who unfortunately trained in the subject here's a fun clip to watch over the weekend:
Thursday, July 19, 2007
- Think Global AS, the Norwegian electric vehicle manufacturer, raised a $60mm Series B round of financing. New investors Element, RockPort, Hazel Capital and CG Holding all participated alongside existing investors Canica, Capricorn Investment Group, Wintergreen Advisors, and individual investors. Venture funding of electric vehicles is really heating up -- how long until this guy has VCs knocking on his door? Maybe this guy will buy a Think with his insurance settlement.
- Bio-butanol developer Gevo emerged from stealth mode to announce a financing by new investor Virgin Fuels and existing investor Khosla Ventures. Jonathan Shieber at VWire reported today that the round was an "under $10mm" Series B [7/19 edit: corrected the quote]. The financing is intended to help the company "whip it good" into a pilot plant stage. If toxicity and cost issues can be addressed, biobutanol has a lot of potential as a gasoline replacement with better energy density, transportability and other benefits versus ethanol.
- Meanwhile, the backlash against corn-based ethanol is starting to ramp up. Many industry participants apparently expect that cellulosic ethanol will be able to save the day. But alternative sources of sugars are also being increasingly turned to. Because of all of the policy implications in the U.S., it will be interesting for cleantech investors to watch how this debate continues to evolve. Meanwhile, biodiesel continues to get little attention, but is looking poised for an uptake.
Wednesday, July 18, 2007
First of all, the National Petroleum Council released a study (pdf of execsum here) which projected continued energy demand growth which will require the use of every available energy resource, dirty and clean -- very interestingly, they made a strong endorsement of energy efficiency as an energy source.
Secondly, this news that Goldman Sachs is projecting $95 per barrel oil by the end of the year, unless OPEC and other suppliers significantly boost output. Now, oil is just one energy source with limited direct impacts on many clean energy technology markets.
But thirdly, word came out that electricity consumption in Europe is continuing to expand at the same pace as GDP, despite significant efforts to promote efficiency improvements. And in the U.S., Citibank is advising their investor clients to abandon coal industry investments -- for a number of reasons including expectations of continued pressure to reduce carbon emissions.
It's a good time to already have a head start "up the learning curve". But caution, as always, is still warranted.
Cleantech VC deals so far this week:
- Boston-area waste-to-energy startup Ze-Gen announced a $4.5mm Series A led by Flagship Ventures and including participation by VantagePoint Venture Partners.
- SAGE Electrochromics, which has developed windows with the capability to quickly darken (to block light and heat, for significant energy savings) or clear up (for visibility) announced a $16mm Series B, led by Good Energies. Applied Ventures and Bekaert also participated in the round. The deal includes provisions for an additional $13mm in financing.
- VentureWire reported that ImageTree, which is developing technology for forest inventory and management, has taken in $2mm in debt financing from BlueCrest Capital. The company's technology has applications in sustainable forestry and potentially for land-based carbon sequestration project monitoring.
- UK-based Metalysis, which has proprietary technology for the production of specialty metals (for a number of applications including some in cleantech areas), raised a GBP 13mm round of financing from Environmental Technologies Fund, 3i, QinetiQ, Seven Spires, Chord Capital and Cambridge Capital Group.
Friday, July 13, 2007
- Energy efficiency is the new "IT" sector (apologies for a very bad pun): Computer/server efficiency software provider Verdiem has raised a $8.33mm round of financing led by Kleiner Perkins, and including participation by The Westley Group, Phoenix Partners, Falcon Partners, Catamount Ventures, Angeleno Group, and Trevor Traina (angel). The company's software allows computer system administrators to remotely override PC users when they re-set their efficiency settings (turning off "sleep" mode, for example).
- Thin-film (CIGS) solar developer SoloPower raised a $30mm Series B, led by Convexa Capital, and including participation by Scatec AS and Spencer Energy AS. Existing investors Crosslink Capital, Firsthand Capital Management and Musea Capital also took part in the financing. VentureWire noted that the team had had a term sheet with a "very reputable" (note: VWire's quote marks) U.S. VC before going with this mostly Norwegian group of backers.
- Another thin-film solar startup (this time using amorphous Si), MWOE Solar, announced a $7mm Series A led by Emerald Technology Ventures, and including participation by NGP Energy Technology Partners.
- Linking themselves with the energy efficiency angles of RFID and sensors, Germany-based Nanotron announced an EUR 10mm round of financing led by zouk ventures, and including existing investors Polytechnos, Danfoss, and IBB Beteiligungsgesellschaft - VC Fonds Berlin.
- Another sensor company, SpectraSensors, which manufactures tunable diode laser-based sensors for gas analysis, announced a $14mm Series C. Nomura's New Energy and Clean Technology Ventures group led the round, which also included CTTV Investments (Chevron's venture capital arm) along with existing investors American River Ventures, Blueprint Ventures, and Nth Power. The firm has been making strong strides in the optical sensors space and is one of the best examples of telecommunications tech being re-purposed into advanced sensing technologies with cleantech applications. The deal is also one of the first public announcements for Nomura's new cleantech group, whose team includes cleantech venture veterans Russell Pullan and Whitney Rockley. So cheers all around...
- 6N Silicon, which is developing a method for less expensive production of solar grade silicon, made a public announcement of their C$6mm Series A. Ventures West and Yaletown Venture Partners led the round. The company also announced that they've taken in C$4mm from SDT Canada to help build out a demonstration line.
- Cerion Energy, which is developing a diesel fuel additive with efficiency and pollution reduction benefits, announced a $1.2mm Series A financing. Braemar Energy Ventures led the round, which also included Excell Partners.
- VentureWire reported that Korean brushless DC motor developer SNTech has taken in a $1.2mm or $1.5mm (some discrepancies in the article) seed round of financing from SAIL Venture Partners, which took a 25% ownership stake in the company. The company had $2.5mm in revenue in 2006 and offers cheaper and more efficient motors versus incumbent designs. VWire also revealed this past week that SAIL is in the process of raising their first institutional LP-backed fund, and that the firm has several European such backers committed to what is targeted to be a $100mm total fund raise.
July 19th, at Flat Top Johnny's in Kendall Square, 6:30pm.
Monday, July 9, 2007
For readers who haven't picked up a copy yet, Ron Pernick and Clint Wilder's recent book The Clean Tech Revolution is a very good primer on the sector. Even regular readers of this website might find it a very useful read -- and especially might find it a great gift for that special someone (your boss, your father in law, etc.) who doesn't quite get this whole cleantech "thing" yet...So we thought it would be good to subject Ron and Clint (who also are a principal and contributing editor at Clean Edge, respectively) to be the next victims, er, participants in the overwhemingly popular ongoing series, "Five Questions". And they were kind enough to share their thoughts...
Q. When did you make the decision to write this book? Was there a particular triggering point in the market when you realized your potential audience had gone mainstream?
A. Back in late 2002, when Clean Edge was helping define the clean-tech industry, we felt that the sector was ripe for a book aimed at a broad business audience. We worked on our first book outline and the idea percolated – then went on the back burner as Clean Edge’s business expanded and took all of our attention -- but it never really went away. In late 2004, we decided to get serious about the effort, hired an agent, wrote a formal book proposal, and finalized a contract with Harper Collins in the summer of 2005.
What was the trigger?
There have been so many ‘tipping points’ in the mainstreaming of clean tech – the growth of clean-tech investing by seasoned VC firms, the sale of Toyota’s millionth hybrid car, California’s landmark greenhouse gas legislation, just to name a few. We’ve seen the momentum just build and build. To be honest, as we saw the clean tech revolution become Page One news and the topic of national magazine cover stories in recent months, we were a little worried that our book release date in June might ‘miss the window.’ Clearly those worries were unfounded, as clean tech, and global mainstream awareness of all things green is only gaining momentum.
As we point out in the book, the move towards clean technology -- in energy, water, transportation, and materials -- will take decades to accomplish -- so it really takes a long-term perspective. Indeed, one of the most common things we hear from friends and colleagues is, “The timing of your book couldn’t be better.” We believe that's because we really are just at the inflection point for clean technology.
Q. While the book is suited for a lot of potential audiences, who’s the prototypical reader you wrote the book for?
There are a number of prototypical readers. Current and potential investors in clean tech, ranging from individuals looking at single stocks or mutual funds, all the way up to pension fund investment managers and venture capitalists. People considering a career in clean tech, whether freshly-minted B-school grads or mid-life career changers. Public-sector officials looking for the next engine of economic growth for their city, state, or nation.
We wrote the book with a lot of different ‘entry points’ – Breakthrough Opportunities, Clean-Tech Consumer Tips, and especially our Ten to Watch lists of leading companies in each technology sector – so that everyone from clean-tech veterans to newbies will find something of value.
Q. Is there a cleantech investment bubble? Why, or why not?
A. Any high-growth investment sector, especially those involving cutting-edge technology, will have a host of losers among the winners. That’s how the capitalist system works. And of course, there will be irrational exuberance in some clean-tech sectors at various times.
But we are often asked ‘the bubble question’, and our simple answer is no; the broader clean tech sector will not be a bubble like the dot-com industry. Why? Because clean tech companies, for the most part, are providing technologies that the world truly needs – those that deliver energy, transportation, potable water, materials. We love John Doerr’s quote that really encapsulates this opportunity – the fact that we’re talking about businesses that are involved in atoms, not just bits.
We’re talking about the largest industries on earth – electricity, automobiles, water – opportunities in the trillions of dollars. And the clean tech revolution will need to serve the needs of both the developed world (to replace aging, crumbling, dirty infrastructure) and in the developing world (where 1 billion people lack access to electricity and 2 billion are without access to clean, potable water).
In the dot-com run-up, many companies put something out in the market and then tried to create the demand for it. No one needs to create a demand for energy use or clean water – or more reliable and efficient use of both – we really are talking about the new industrials when we look at clean tech...
Q. How much is the market growth you project in clean energy tech predicated on new favorable policies coming into effect? How much is this industry threatened by random acts of politics or inconsistent policies?
A. We like to point out that there is no energy industry on the planet that is subsidy or policy independent. Just look at the oil, coal, and nuclear industries. None of them would be where they are without government support. So to answer your question – policy that supports clean-tech growth and development is tantamount to its success.
But as we point out in The Clean Tech Revolution, the shift is already well underway. From Frankfurt to
Even in the
We’re generally optimistic that this shift in policy will continue – because we see it as an imperative for governments that wish to remain relevant. Those regions that don’t embrace clean energy and clean tech, and provide supportive policies and a shift away from the polluting, volatile energy industries of old, will lose out to those regions that do.
Q. What technology has the highest potential-to-visibility ratio right now? (In other words, what’s your favorite unknown technology that investors should be more aware of…)
A. You ask an interesting question. There are so many untapped areas – some with relatively high visibility and others that are currently being overlooked by the investment community and the broader market.
Without sounding coy, we’d like to recommend that people pick up a copy of our book. Within The Clean Tech Revolution we showcase “breakthrough opportunities” in each of the eight technology chapters. We highlight some of the areas that we think offer the best near- to mid-term opportunity for investors, entrepreneurs, and corporate executives. Everything from next-generation lithium ion batteries and renewable-energy powered desalination plants to closed-loop biorefineries and smart appliances. The answer to your last question is, quite literally, in the book.