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 firstname.lastname@example.org.
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.