Wednesday, December 27, 2006

Codon Devices and other news

Codon Devices, which has developed a platform for the rapid design and genetic sequences, announced a $20mm Series B led by Highland Partners, with existing investors Alloy Ventures, Flagship Ventures, Khosla Ventures and Kleiner Perkins Caufield & Byers also participating. As with last week's mention of ERA Biotech, one of the potential applications of this technology is in the development of enzymes and other inputs to biofuel production.

Other news and notes:
Here are a couple of good overviews of recent discussions around ethanol and clean coal... A local perspective on cleantech venture capital in New Hampshire... Energy Innovations' Andrew Beebe burns his grilled asparagus... Finally, cheers to Blueprint Ventures for a cute holiday video (note the subtle cleantech references).

[12/27 update] Also, check out this very interesting scoop by Joel Makower -- it's a very good example of how the commercial sector is starting to pick up demand for clean technologies even in the absence of major regulatory change...

Thursday, December 14, 2006

World Energy Labs and Novazone announce raises

  • (self-promotion alert) Extremely happy to mention this one... World Energy Labs, which has developed breakthrough analytics for batteries and a broad range of electronic equipment (including fuel cells and other non-storage applications), has announced a $5.4mm Series B led by Expansion Capital Partners. The company's electrochemical impedance spectroscopy-based technology and products promise dramatic improvements in the way energy storage and electrochem devices of all types and flavors are operated and monitored, as well as in quality control during manufacturing.
  • Novazone, which is developing ozone-based systems for the sanitization of drinking water and food/ agricultural products, announced a $7mm Series B led by Chrysalix with participation by existing investors Foundation Capital and Grauer Capital. The funds will be used for working capital and new product development. Novazone is particularly benefiting from the food contamination episodes that have been in the news recently.

Tuesday, December 12, 2006

Accelergy, EnviroTower, Solar EnerTech, Western GeoPower, and GO Ethanol

  • Accelergy, a catalytic materials discovery and commercialization firm, has closed a Series B of undisclosed size. [PE Week Wire reported today that the round size was $25mm] The round was led by Goldman Sachs, with new investors Sequoia Capital China and Lux Capital, plus existing investors Nth Power, Technology Partners, Mobius VC and Advent International all participated as well.
  • Solar EnerTech raised a $5.6mm private placement ($5.1mm of equity, $0.5mm of convertible debentures). The Shanghai-based solar PV manufacturer will use the funds to help complete their manufacturing facility. Knight Capital Markets participated in the transaction. Also of note, Solarfun, another Chinese solar manufacturer, filed for a $162mm IPO recently.
  • Geothermal project developer Western GeoPower announced the "negotiation" of a C$2.5mm private placement. The capital will go toward their San Francisco-area project at The Geysers Geothermal Field.
  • Paladin Capital Group has led a $145mm debt and equity financing of GO Ethanol, a developer of ethanol production facilities in Ohio ("Greater Ohio" = GO) and surrounding areas. SunTrust, Robinson, Humphrey led the debt portion of the financing.
  • London-based Environmental Technologies Fund announced that their first fund has raised $66mm for deployment into cleantech venture capital. The company claims to be the first European cleantech VC fund backed exclusively by institutional investors, and they are specifically targeting expansion-stage investments.
Other news and notes: Good news for nanotech investors -- a recent survey indicates that consumers are willing to tolerate some risks if it means real benefits... Cleantech investors drawn to the potential investment opportunities in broadband over powerline (BPL) should be aware of this ongoing debate... VCs have taken "a particular shine" to cleantech investments, apparently... Finally, there continues to be a lot of strong talk around various alternative fuels. First, there's this algae vs soybean biofuels "smackdown" (??). Then this argument that a hydrogen economy will never "make sense." Also, there's this interesting interview with Lee Lynd of Mascoma, promoting cellulosic ethanol. But in the end, these are all different ways at achieving the same thing -- moving vehicles around. And cost per mile will be the end determinant, no matter what arguments people make right now ahead of the results.

Wednesday, December 6, 2006

Quanlight, BioPetroClean, and PowerGenix

  • Quanlight, which is developing solid-state lighting solutions (specifically, yellow-amber-red LEDs), announced a $1mm Series A from Blackbird Ventures. As part of the investment, Neil Senturia of Blackbird is also coming on board as CEO.
  • Nickel-zinc battery developer PowerGenix announced a $17mm Series C led by the Angeleno Group. Return investors Advent International, Braemar Energy Ventures, Granite Ventures and Technology Partners also participated in the round. Energy storage is a technology area that has been getting a lot of attention by investors lately (here's another nifty example from Time).
  • Cleantech investor updates: MDV has brought on Josh Green as a partner on their energy and materials team. Green will be joining Erik Straser and Marianne Wu on the team.
Other news and notes: Lux Research reports that nanotech venture capital investments should reach $650mm in 2006, but that "exits remain elusive"... (Self-promotion alert) Finally, here's a nice column on general cleantech investing trends.

Friday, December 1, 2006

Q3 cleantech investment numbers

The Cleantech Venture Network this week released their Q3 tally of sectoral investments, and it was another banner quarter. Almost a billion dollars of investments were tracked by the group in North America, and including European figures it topped the $1B mark.

Interestingly, out of 47 deals tracked in North America, five deals (Cilion, Altra, Ion America, Renewable Energy Group, and Newmarket Co.) made up 60% of the total funds invested. It's a very good indication of what we've talked about before, in that there is a bit of blurring of project finance and traditional VC in the market figures, especially when it comes to biofuels. Cilion, Altra, REG and Newmarket raised their large financings in order to build out or acquire new production facilities... This has implications when thinking about the importance of cleantech within the overall VC industry. The press release points out that the dollars tracked in cleantech was 14% of overall VC investment in the quarter, but that the number of deals tracked was 5% of the overall total VC dealflow. Perhaps the latter figure is a good way to think about the positioning of the sector right now.

Note in the PR that the language is a bit confusing when it states that "Cleantech investment YTD is running 20% behind last year YTD," which apparently actually relates only to European investment totals, according to Craig Cuddeback at CTVN. As the below chart shows, it was actually another up quarter for the sector in North America.

One deal to note: A sensor company, Visyx, has been spawned by Symyx with most of the funding coming from CMEA. The sensors will be targeted initially at monitoring of fluids in transportation applications. Symyx received 37% of the new company in exchange for $400k in cash and the contribution of IP.

Other news and notes: Surveyed cleantech companies expect the AIM to be "more important" than the NASDAQ for the sector -- but does this really imply that AIM is becoming the exit path of choice? The press storyline regarding AIM vs NASDAQ is picking up on the SarbOx obstacles in the US, but the other factor is that such comparisons may not be apples to apples. In many cases, such go-public moves are less of an exit for venture investors than an alternative way to enable follow-on financings from public investors, but with too little float to allow real liquidity for major shareholders. That financing alternative is an important role, but it does mean that comparing NASDAQ to AIM or other exchanges -- without differentiating between the big cap and small cap exchanges they manage -- is a bit tricky. Here's an article on the subject from a while back. It would be interesting to do another similar survey, but also asking specifically about the role of each exchange for investors' exits and returns (and also it would be nice to ask a broader set of interviewees than those attending a single conference in London)...

Also: Israel has an "immediate need" for $210mm of cleantech VC and private equity funds... Neal concludes that cellulosic ethanol might be making progress, but "the jury is still out"... Why is energy storage getting such strong interest from investors? Among other reasons, $74B is an attractive target market size (note: sub. req'd)... Even Matt Marshall would have to admit that there's an impressive cleantech cluster in the Boston area... No, Joel, it probably can't -- but that's one reason it remains a very attractive investment area. So it's not a bad thing... Finally, more info on the recent Zipcar financing.

Tuesday, November 21, 2006

Happy Thanksgiving pt 2

Wanted to share the above chart, which was in the most recent quarterly Jefferies CleanTech Review. The color-coded areas are estimated to be more susceptible to significant drought by 2025, given current water supplies and uses. Really helps highlight why, even if energy tech gets all the press attention, water tech may be an even more pressing market need.

Happy Thanksgiving

Lots of folks who have reason to be thankful for recent checks written and received:
  • Solaicx has taken in $3mm from Applied Ventures. The silicon wafer manufacturer plans to use the funding to help build out a second manufacturing facility. In addition to generally addressing the current silicon shortage, Solaicx claims their process provides significant efficiency gains in silicon production as well.
  • Materials discovery firm Intematix has taken in a $16.5mm Series C led by Crosslink Capital and Samsung Ventures. New investor Presidio STX and existing investors DFJ, East Gate Capital, and Pacifica Fund also participated in the round. The company's materials development efforts are finding applications in solid state lighting, fuel cells, and other clean technologies.
  • Intechra, an e-waste management and recycling company, has taken in a $6.5mm round of financing led by SJF Ventures and including participation from Richland Ventures, Chrysalis Ventures, and Clayton Associates. The financing will be deployed toward a recent acquisition.
  • Austria's IDENTEC Solutions, a developer of long-range RFID technology, has taken in a 10mm euro round of financing led by SAM Private Equity, and also including participation by Sustainable Performance Group, RFID Invest, gcp gamma capital partners, and a private investor. SAM and the other investors are looking for cleantech applications of RFID including asset management approaches to minimize the emissions impacts of transportation.
  • Two other deals highlighted/ scooped by PEWW today: The Beam, an online directory for green building professionals, has raised $5.17mm in a Series A led by VantagePoint Venture Partners. And car-share provider ZipCar has raised a $25mm Series E led by Greylock with participation from existing investors Benchmark and Boston Community Ventures.
Some cleantech investing reading for over the holiday, in case the tryptophan doesn't take full effect: European cleantech investing fell significantly last quarter, at least in dollar/euro terms. Given how much impact a single large round could have on such small numbers, it would be interesting to see what happened in terms of number of deals done, too, otherwise these quarterly ups and downs are hard to parse through to get the big picture... Nuclear is "the greenest of the green"? Not to get embroiled in the debate, but it's important to note -- there is in fact a strong debate about this question... Here's a nice little column about all the cleantech ETFs that have been coming out recently... Short answer: No. The linked column gives a much nicer long answer (of particular note is the fact that oil does not substitute for most clean energy technologies, which are more directly related to electricity generation and use). However, some specific cleantech markets are much more directly impacted, potentially... Here's the most recent Fenwick & West VC terms survey... And finally, a new $150k sustainable energy technology prize -- get those bplans ready!

Wednesday, November 15, 2006

SunPower buys Powerlight

As we've talked about for some time now, the solar market is due for some serious consolidation.

While there have been some earlier small moves, today a big move came with the announcement that SunPower is going to be using their healthy market valuation to acquire Powerlight.

This follows on the SunEdison acquisition of Team Solar, and various other vertical integrations over the past year or so. It's very interesting to note Joel Makower's take in the Red Herring article linked above that this represents "Plan B" for Powerlight in their attempts to go public.

Joel has his own take here, and links this announcement to the upcoming Clean Tech Investor Summit. Neal Dikeman also has his take here.

For cleantech investors involved in solar, this may mark the beginning of a phase of exits via M&A versus IPO, a natural progression as the industry continues to mature. As the solar IPO wave potentially crests in 2007, investors evaluating new solar plays will need to adjust their expectations accordingly.

Monday, November 13, 2006

Firefly and Infinite Power; European cleantech VCs in a "choppy" market?

  • Firefly Energy, which has developed an alternative set of components for improved performance in lead acid batteries, announced a $10mm Series B led by Stark Capital, and including existing investors Caterpillar, KB Partners, the Illinois Finance Authority and the Tri-County Venture Capital Fund. The financing will go toward further product development and other efforts.

Sunday, November 12, 2006

Last week's Energy Venture Fair

Had the pleasure of attending the annual Energy Venture Fair this past week. It's an interesting pitch-fest where dozens of energy tech startup CEOs come to give 15 minute presentations to potential investors (or, more often than not, each other).

Because about five company presentations go at the same time, it's always fun to see which rooms are crowded and which are not. This year's big winners (based upon the number of investors sitting taking notes) appeared to be anything solar- or biofuels-related, which is really no surprise. But there were some interesting companies present, and a nice breadth of techs and markets represented. You can read about the companies that were selected as "Most Promising" here: Wilson TurboPower, Zolo Technologies, KiteShip, Ice Energy, and Hythane. Neal Dikeman also has a few thoughts on the event.

Very unfortunately, I missed Steve Jurvetson's plenary keynote, which several people I spoke to later said was very good, and only caught the tail end of Tim Healy's (CEO, EnerNOC) rallying-cry speech. But I was able to see most of the investor panel that spoke at lunch on day one, which included Stephane Dupont of the NVCA as moderator, and Philip Deutch of NGP Energy Technology Partners, Scott MacDonald of SAM Private Equity, Pete Higgins of Second Avenue Partners, and Erik Straser of MDV. Some notable statements from the panelists (and as always, having no claim to journalism, note that these are often paraphrased, so names are omitted to protect the innocent):

"In these markets, lifecycle adoption varies. There are opportunities for both grand slams and longer term plays."

"Spend the time to think through the issues and put yourself in your investors' shoes. Get them up to speed and make them comfortable as best you can."

"The absence of information is perceived by investors as bad news. Don't treat your board like they're the IRS, someone to keep at an arm's length relationship."

"We are seeing the top 20% of entrepreneurs in the Valley and elsewhere stopping what they've been doing and coming into these value chains [energy, etc.]. They know how to take risk out in a staged way, how to grow a business in a venture context. We like to see a balance -- know the domain, but it's best not to be so embedded in it that you don't know what aspects of the industry's history to listen to, and what not to."

"I've always found that a CEO who's upfront about challenges, and gives both the pluses and the minuses, is refreshing."

"Really, we invest in the technologist and not the CEO, because we invest fairly early. We need to make sure that there's alignment around the vision for the company, as well as the role for the technologist looking forward."

"In Europe, we're challenged to find entrepreneurial CEOs. There's not as much of a venture-backed, fast-growth culture."

"We look for very deep domain expertise in a founder -- that they're already in their customers' heads, and have knowledge of all of the subtleties that end up being very important when you're trying to get a P.O."

"We catch companies when the technology has moved from magic to science -- it's happened more than once, and it can be controlled. We will typically manage books for the company, and provide other support infrastructure, during the period when the VC is helping to figure out what to bring on board and when. And only when we've figured out the market, the customers, etc., is it time to provide the significant venture capital."

"Add infrastructure as slowly as you can. You can get by with a part-time controller for a while. Focus on what's most important in terms of getting that technology into the market."

"Everyone talks about IP, but few do it well. Maybe there are 15 people in the Valley who write good IP strategy. We try to identify the best strategists for a situation, then engage a litigator to gameplan what's likely to happen -- when you're eroding someone else's margins, they will react."

"At a certain level, IP is irrelevant. You need to execute, and that's how you create an advantage. IP is not a silver bullet."

"Right and wrong doesn't determine legal outcomes. So it's important to have the right team, not patents."
As for me, I would suggest winnowing down the presenting companies a bit so that the event could be truncated to one day. With a two-day event full of repeated presentations, investors naturally come to only one or the other but not both. And that's a big hindrance on the value of networking. Keeping the event to one day would improve the networking for investors, and that would probably bring even more of them out... But overall, a very interesting couple of days in Santa Clara.

Mascoma, Luz II, Norsun, NIL, and other news

  • Mascoma, which is developing cellulosic ethanol production technology, is expected to announce a $30mm round of financing on Monday, led by General Catalyst Partners, and including Khosla Ventures and Flagship Ventures (we've previously mentioned a smaller amount than the $9mm it's now known these two firms invested earlier this year), Kleiner Perkins and others. The funding is going to go toward a pilot-scale plant, and Samir Kaul mentions that he is expecting commercialization in 2008.
  • Not sure how we forgot to mention this one, but hopefully better late than never: John Woolard of VantagePoint Venture Partners has joined centralized solar plant startup Luz II (no website yet) as CEO, and the firm has raised an undisclosed amount of funding from VPVP. The firm apparently already has a 500 MW power purchase agreement in place with PG&E, and is aiming for <10 cents per kwh at scale.
  • Norsk Hydro has invested $23mm in Norsun, a Norwegian producer of monocrystalline silicon wafers. The company may also expand into other related businesses. Pre-money valuation was at least $23mm on the investment.
  • Two cleantech-related funds getting started up: In Europe, Capricorn Cleantech Fund of Belgium has done a first close of 26mm euros, and is looking for the fund to be 75-100mm euros when fully closed. Initial LPs include PMV, Electrabel, and MRBB. And in Texas, TXU is going to devote $200mm to a corporate venture group that will look to invest in alternative energy technologies. (Both of these were mentioned by PE Week Wire last week)
Other articles worth checking out from the past week: Is this really how Kleiner got into "greentech"?... Here's an interesting article on how China's environmental issues will drive cleantech venture capital... The Acumen Fund has an interesting venture-philanthropy model... Yet more interesting info on lithium ion battery techs... $100mm going into fuel cell projects via the DOE... In terms of tracking underlying energy market trends, this is a fascinating article... Finally, with all the interest in algae-derived biodiesel, these girls should be prepared for a deluge of VC business cards!

Monday, November 6, 2006

It's been quiet lately...

At least in terms of public pronouncements of cleantech deals. Is the industry taking a breather? Or, as several fellow investors have mentioned to me recently, are deals increasingly going stealth in the space, as competition heats up for deal access? Certainly seems like the latter scenario has some truth to it, given talk we've heard about various deals that aren't being publicly announced. But of course, journalistic scoops are the business of other sites, VentureWire and PE Week Wire, and not the purpose of this site...

So that having been said, here are some news items and tidbits from recent public announcements and articles:
  • Boston-Power Inc., a developer of advanced lithium ion batteries, has raised an $8mm Series A led by Venrock Associates and Gabriel Venture Partners. The company had previously raised angel/management seed financing. The company joins A123 and Li*On in the lithium battery space, among others.
  • The business of climate change: We didn't mention the recent Stern Review out of the UK, which attempted to put a dollar (pound?) figure on the overall future economic cost associated with climate change, but it was sobering news. Joel Makower puts it nicely into perspective. It also once again helps make the case for a strong economic value proposition for climate-friendly technologies and businesses -- not least of which, of course, would be technology-enabled energy efficiency, which we've discussed before, and which can provide winning economics even today, without any necessary market shifts. It furthermore helps make the case for the continued development of carbon emissions credit markets, as private market-based solution schemes proliferate and mature, even in the absence of regulatory change. We've talked before about how the development of such markets will be another big impetus for adoption of clean energy technologies (and thus a nice value accelerator for cleantech investors). Hence, it's very interesting to note that Morgan Stanley is planning to invest $3B in greenhouse gas (GHG) emissions credits and related businesses over the next five years. The GHG credit market is starting to come together...

Wednesday, November 1, 2006

AbTech raises $6.8mm Series A

AbTech Industries, which sells a "smart sponge" for water filtration and spill cleanup, has raised a $6.8mm round of financing from Bernard L Madoff Securities and other financial investors. As the linked article notes, the company has been around for a while, and had previously raised a total of $15mm in small-round angel financings. The article also notes that the company's goals for the use of the capital are to increase sales coverage nationwide, and to build up their sales pipeline to $5mm by year's end. (Thanks to Bernardo Llovera and VentureWire for the heads up on this one)


Also, looking forward to seeing everyone tomorrow (Thursday the 2nd) at the next REBN event, "Everything You Need To Know About California Cleantech Legislation," generously hosted by Nixon Peabody up in the city. For more details and to RSVP (space is getting pretty tight), contact Nick Allen.

Friday, October 27, 2006

Miasole raises $35mm

There are scant publicly-available details, but VentureWire broke the story today that CIGS player Miasole has raised a $35mm round of financing (self-promotion alert: I am a very minor personal shareholder). Matt Marshall has some of the details, and also notes that the company is not alone among thin-film solar startups seeking funding right now... Existing investors include Kleiner Perkins Caufield & Byers, VantagePoint Venture Partners, Firelake Strategic Technology Fund, Garage Technology Ventures and Nippon Kouatsu Electric Co.

Thursday, October 26, 2006

CTVN: Cleantech VC investments hit $933mm in Q3

Cleantech investments continue to show strength, with the Cleantech Venture Network's recently released estimates that $933mm was invested in the sector in the third quarter in North America.

Tellingly, more than half of the investment amount was into biofuels. This probably means that a small number of very big capacity-focused investments dominated the numbers. It will be interesting to see the number of deals that are represented when the data is available, and it would also be interesting to track median deal size and deals per quarter over time.

At this point the overall numbers are getting to be hard to compare quarter by quarter as the totals are increasingly dominated by just a handful of the total number of deals. For instance, the fact that energy investments made up $837mm of the $933mm total suggests that dealflow in other sectors such as water, materials, etc. may actually have declined from the previous quarter.

Regardless of the Q3 specifics, it's clear that 2006 remains a banner year for cleantech investing.

Other cleantech news:
  • Altira has reportedly closed on $94mm for their next fund, according to PE Week Wire. The energy technology investment group counts Stanford, the Andrew W. Mellon Foundation and Park Street Capital among their LPs.
Other news and notes: Intriguing, but why does this make me think of Ice-Nine?... Two new cleantech ETFs for public-market investors... Silicon shortage to end by 2008 (or not).

Thursday, October 19, 2006

87% IRRs on European cleantech venture investments?

  • A very interesting study released recently by New Energy Finance, and commissioned by the European Energy Venture Fair. Looking at 57 different investments in Europe since 1999, the study calculates that VCs have achieved an 87% annual rate of return on these investments -- collectively. It's important to emphasize that last point because, as is typical for venture investments, the results are an aggregation of a very wide range of results. Eight of the investments resulted in (very successful) IPOs or trade sales, 9 had follow-on rounds that averaged to moderate up rounds, six went under, and the remaining 34 are still being carried at cost (at least as far as the study's authors know). So really, not a huge sampling of actual exits, but still, very intriguing results. As a reminder, a study of cleantech VC exits and returns was completed last year by the Cleantech Venture Network (self promotion alert: Diana Propper of Expansion Capital Partners was one of the study's co-editors), which also found competitive returns in the sector (as first described in this lengthy post).
  • Sub-One Technology announced a $7mm Series B financing, led by ATV, and including existing investors Chevron Technology Ventures and ITI Energy. The company's anti-corrosive coatings help prevent failures in -- and replacement of -- energy pipelines and industrial infrastructure. The company simultaneously took in a final $1mm Series A tranche from ITI Energy as a result of earlier commitments as well.
  • The next Renewable Energy Business Network event has been announced: November 2, in San Francisco, Nixon Peabody is graciously hosting a networking event, including what should be a very interesting presentation by Kurt Johnson of the California PUC: "Everything You Need to Know About California Cleantech Legislation." Space is limited, so Bay Area renewable energy professionals who are interested in attending or getting more information should contact Nick Allen.

Wednesday, October 18, 2006

It's "Solar Week"

Thanks in part to Solar Power 2006 going on this week, cleantech investing news is dominated by that sector right now.

  • Practical Instruments raised an $8mm Series A, co-led by Nth Power and RockPort, and also including Trinity Ventures and Rincon Venture Partners. Matt Marshall has a nice overview of the company here. The company's founders originally came out of Energy Innovations, another high-profile solar concentrator startup.
  • It's interesting to note that Moser Baer has been actively jumping into solar. Witness the recent announcements of strategic relationships with both SolFocus and Solaria (again, solar concentrator plays). As new thin-film cell technologies are released over the next few months, international contract manufacturing "Modcos" (module manufacturers) may have an important role to play in bringing these products to market as well.
  • The "pain points" around financing of solar projects are getting pretty well mitigated these days, or soon will be, due to all of the various announcements like this one and the numerous solar project developer startups out there. Now, if someone could successfully address the pain points around installation costs...
  • Other solar notes: No, "Google solar system" is not an add-on to Google Earth... Here's a nice column describing how current silicon shortages (which have opened up a potential window of opportunity for thin films and other alternatives) may be short-lived... Even with all the recent entrepreneurial activity in solar, new tech breakthroughs continue to be announced, the industry isn't simply in an "innovation harvesting" phase... One might have expected SunPower to take some of their capital and hedge their bets by somehow getting into thin-films and other silicon-eliminating and -minimizing alternatives (via strategic investment, perhaps), but I guess not.
Other news and notes: Here's a very good column by Joel Makower illustrating why and how the private sector (led by insurers, in many cases) is having to take climate change matters into their own hands even in the absence of policy change. Some people continue to argue that cleantech is a policy-driven investment sector, but Joel's writings remind us that the underlying global climate and natural resource trends are what's really at the heart of the investment thesis... Cleantech around the world: A nice synopsis of the AustralAsian Cleantech Forum... Finally, Fuel Cell Technologies, a Canadian SOFC startup, has closed its doors.

Monday, October 16, 2006

Fat Spaniel and Sterecycle

  • UK-based recycler Sterecycle took in an 8mm pound financing from investors including Goldman Sachs to fund additional facilities. The company focuses on household waste.
Other news and notes: More on the interactions between cleantech venture capitalists and ongoing regulatory and legislative efforts in California... Here's an interesting article on the debates around new coal-fired power capacity and clean coal technologies.

Friday, October 13, 2006

Amyris, EnerWorks, and other news

Other news and notes: This sounds like it was a fun meeting... GE is delivering a prototype SOFC... Here's a good overview of solar PV in advance of next week's conference.

Tuesday, October 10, 2006

Catching up on the news

Many deals and announcements in cleantech investing over the past couple of days:
  • NASA has devoted $75mm to launching Red Planet Capital, which is a non-profit effort to provide venture capital for companies whose technologies are applicable for space travel. Solar PV, fuel cells, batteries, sensors, drinking water and wastewater treatment all come to mind as possibilities, as well as various advanced materials, so Red Planet is now entering the ranks of cleantech investors.
Other news and notes: Fun quote re: biofuels: "If we wanted to build a 100 million-gallon plant, we would have venture capitalists calling us up. I'm looking for someone investing a half a million bucks and to see how it goes"... There are now apparently 136 venture-backed, independently-operating nanotech startups around the world... News of an upcoming cleantech conference in Tel Aviv... As someone who's been beating the drum for innovative, technology-based energy efficiency opportunities for a while now, I am very glad to see this news.

Thursday, October 5, 2006

groSolar, DeepStream announce raises

  • groSolar, an installer and distributor of solar photovoltaic systems based in Vermont, announced a $2.25mm venture round led by SJF Ventures. Calvert Social Investment Fund and Allco Financial Group also participated in the round. The company is a subsidiary of GRO, formerly known as Global Resource Options. The financing is to go toward the company's national expansion plans.
  • In the sensors and M2M space, DeepStream Technologies of Wales (UK) announced a ~$15mm Series B led by 3i Group plc. The company's systems are used to integrate sensors and intelligence into energy, medical and electrical appliances and equipment -- for smart building and energy management applications, for example. Existing investor Doughty Hanson Technology Ventures also participated in the round.
  • Cleantech investors speaking out:
Vinod Khosla in BusinessWeek -- "We are looking more for the big breakthroughs... than the small ones in batteries."

John Doerr in Red Herring -- "'Clean tech,' as many past efforts at environmentally friendly industry have been called, hasn’t panned out from an investment standpoint, said Mr. Doerr, but 'greentech' will."

Kirk Washington at the "Investing in Clean Energy" conference -- "The elephant in the room is that a bubble gets blown up that could burst."

Peter Grubstein in SocalTech.com -- "There are more companies able to get their prototypes into customer's hands much faster, there is demand being supplied by renewable portfolio standards from states like California, and consumer awareness and corporate awareness for the first time."

Christine Bergeron, interviewed by Cleantech Blog -- "Investors believe that above average returns can now be made in this sector."

Other items to note: A good overview of silicon and CIGS PV technologies... More cautionary words about hydrogen-fueled transportation technology... Finally, Chevron and NREL are teaming up on cellulosic biofuels.

Wednesday, September 27, 2006

NGEN's $180mm, plus GridPoint, BPL Global, and the California Clean Tech Open

  • GridPoint, the provider of energy storage appliances for the home, announced $21mm in funding, mostly from Goldman Sachs. Also announced was a demand response co-marketing arrangement with Goldman's subsidiary Cogentrix. This could be an indication that Cogentrix is going to be more directly taking on existing demand response players such as Comverge, EnerNOC and ConsumerPowerline -- a fast growing market segment that has attracted a lot of cleantech VC interest.
  • BPL Global, a provider of broadband over powerline for "third pipe" and smart grid applications, announced a $25mm Series C. Interestingly, a Kuwait-led consortium provided the financing, including existing investor Al-Deera Holding, and new investors International Financial Advisors, Kuwait Holding Company, and International Finance Company. Other existing investors include DQE Communications, PA Early Stage, SZAR Partners and the company's founders.

Monday, September 25, 2006

The current state of play in energy tech and cleantech investing

Coming out of last week's Cleantech Venture Forum, it's pretty clear that cleantech (and relatedly energy tech, which is not a 100% overlap, as regular readers of this site will understand) is fast becoming a mainstream investment area for VCs, in part driven by LPs' interest.

In terms of energy technology investing, Rodrigo Prudencio of Nth Power was kind enough recently to share some of the data that his firm is tracking. As part of a recent presentation he gave at Rice University, Rodrigo showed how US energy technology VC investments are at $1.7B so far in 2006 -- compare this with $0.9B for all of 2005, or with the $500mm expected this year in VC investments in Web2.0.

That the energy technology sector (and cleantech in general) is a booming investment area is well understood, but what was really fascinating was Rodrigo's breakdown of the numbers by subsector, which showed that some subsectors are getting a lot more investor interest than others.

Within Distributed Energy Technology, for example (btw, this subsector was 28% of the total), investments in fuel cells and solar dominated the subsector, while other technology areas such as new engine technologies and hydrogen generation were small or nonexistent in the data. This means that solar tech has received more than 10% of all energy technology VC investments so far this year. Interestingly, while investments in fuel cell technology have been generally flat or dropping over the past year, battery-related investments have been growing very quickly. For those who argue that batteries and fuel cells are competing technologies, this is interesting data.

Even more interestingly, in the Fuels subsector, ethanol-related VC investments have received more than $400mm, or just about one quarter of all energy tech investments. Some (including yours truly) would argue that much of this hasn't really been venture capital investment, but has instead been project finance and/or mezz financing that happened to include VCs in the mix. But the more important comparison is with other fuels-related investment areas -- biodiesel, fuels-related biotech, and new drive train technologies have collectively received less than $100mm so far this year. Such investments clearly are not receiving the same level of attention in the rush to invest in ethanol-related opportunities.

Encouraging to those who have been proponents of technology-enabled energy efficiency technology is the fact that 21% of energy tech investments this year were directed to Energy Intelligence, and of that, the vast majority has been directed to IT & software, end-use management, and sensors. This is good validation that such scalable technologies are primed for rapid market adoption -- or at least that investors think so. Such investments have more than doubled over the past two years.

Thanks to Rodrigo for sharing this very interesting look. As Rodrigo points out, there's a lot of deals concentration in certain technologies, and "the opportunity is to find neglected but valuable subsectors." Amen, and especially true for those investors with a broader cleantech mandate as well.

And it's all strong validation of the increasing interest in these industries, and in the cleantech investment thesis in general. Further such indications can be found in this article in PE Week, which points out that a lot of former IT/etc. venture investors are now looking to expand their efforts in the sector. Oftentimes because LPs are asking for it to happen.


Other news items: (Self-promotion alert) I'm extremely pleased to note today's VentureWire People mention that Alex Sloan has joined Expansion Capital Partners as a Principal... [If only VentureWire would provide online links to their stories, it would be great to be able to point to their work more often...]

Also, for those in the Bay Area on October 4th, the next Renewable Energy Business Network (REBN) happy hour is going to be held at Gordon Biersch in Palo Alto starting at 6:30pm -- and in a terrific opportunity, if you're interested in an overview of PARC's cleantech efforts and an in-person review of SolFocus' business model and technology, PARC is generously hosting a tour for REBNers immediately preceeding the happy hour (so: 5 to 6:30pm). Those interested in attending the PARC event should RSVP to Nick Allen as space is limited (no RSVP necessary for the happy hour at Gordon Biersch afterward).

Sunday, September 24, 2006

Cleantech Venture Forum recap

My colleague at Expansion Capital, Kjartan Jansen, kindly offered to write down his thoughts from the recent Cleantech Venture Forum in NYC. Thanks, KJ!
I had the pleasure of spending the second half of last week at the 14th Cleantech Venture Forum in New York. The group continues to do a terrific job and there was notable excitement among the participants (disclosure: Expansion Capital Partners is an investor in the Cleantech Venture Network).

If I were to summarize the conference in a few sentences, they would be:
  • Cleantech as an investment thesis and asset allocation is now mainstream. Some institutions are still skeptical, but they're becoming rare.
  • More money is coming into the space, but the quality of dealflow being tracked still exceeds this nicely.
When I think hard about it, I could have said the same thing after the previous CTVF in San Francisco. But since the east coast events tend to focus more on the capital markets (i.e. Wall Street) and policy, vs. venture capital on the west coast, we heard from more folks outside the investment community this time. So the change felt more apparent.

Notable appearances included (in no particular order):
  • Andy Rueben (Vice President of Corporate Strategy and Sustainability, Wal-Mart)
  • Vinod Khosla (Khosla Ventures)
  • Andy Karsner (Assistant Secretary for Energy Efficiency and Renewable Energy)
  • Vijay Vaitheeswaran (the Economist)
  • Kevin Walsh (MD, Renewable Energy, GE Energy Financial Services)
  • Joseph Boren and Win Neuger, both from AIG (Joseph from AIG environmental and Win is the CIO of the parent company)
  • Several journalists from major publications and news sources were either covering the conference or on the panel (see agenda)

Most panels seemed well received by the participants, and while I did not have a chance to participate in many of them (as I, like most participants, was in and out of meetings -- networking is always a key benefit of these events), I did sit in on the Vinod, Andy, Vijay fireside chat as well as parts of the bio-fuels panel, to note two.

And conveniently, both sessions covered the same topic: Biofuels (ethanol).
Not too many new thoughts for regular readers of this blog came out of this, but here’s a quick summary of what was discussed in the sessions:

- Ethanol is currently replacing MTBE as a fuel additive; this alone will likely put demand above 7.5B gallons by 2012.

- There is some debate around the energy and environmental balance in ethanol produced using current technologies; there is really no debate around the energy or environmental balance of cellulosic ethanol. Hence interest in earlier stage cellulosic ethanol technologies.

- Still early days for cellulosic ethanol; the cost still needs to come down significantly.

The gamble appears to be whether or not ethanol is adopted more widely than as simply an additive (i.e. E85 – 85% ethanol, 15% gasoline). This is what Khosla believes should happen and is pushing very hard for. He argues for three things:

  • Mandate that 70% of all new cars be “flex-fuel” by 2014
  • Mandate that 10% of gas stations owned by major oil co’s offer E85 in the same time frame
  • Reduce current subsidy of ethanol to $0.25/gallon, but increase it to $0.75/gallon if oil drops to $25/barrel

He also noted that we should have a good indication of where policies regarding this are headed, since all candidates for the ’08 election have to go through the Iowa primaries. And Iowans care a lot about ethanol.

Andy Karsner was expectedly non-committal beyond what we already know through the recent energy bill.

But it should also be noted that if one takes current projections, some argue that there is already enough capacity in place and under construction to meet the projected demand. So not everyone is excited about jumping on new investment opportunities with Biofuels or Ethanol noted in the company name…

Noteworthy was also Andy Rueben’s presentation during the gala dinner, where he practically pleaded with the audience to share our knowledge about products that can help Wal-Mart save money (I.e. better/cheaper/more durable lighting; better/cheaper/more effective indoor control; smaller/more economical packaging etc). Considering the audience generally views Wal-Mart as a strong potential customer for their portfolio companies, my guess is someone will give him a ring…

I also found the quality of presenting companies to be significantly higher than in previous years, another sign of the maturing investment sector. And in keeping with the above commentary, the winner of the most promising presenter award was Targeted Growth – a Biofuels company.

Hope to see everyone at the next CTVF in San Francisco, at the end of February.

Thursday, September 21, 2006

"It's been a very interesting few days"

There has been a lot of cleantech investing news over the last couple of days:

The ongoing Cleantech Venture Forum (I couldn't be there, but my colleague Kjartan will kindly be "guest blogging" on it; for disclosure, my firm is a sponsor) has prompted a lot of attention and announcements in the industry. First off, the revised announcement by the Cleantech Venture Network that they are forecasting cleantech VC investment totals will be $10B from 2006-2009 in North America (compared with $6.4B from 2003-2006). This at the same time that major institutional investors are saying they've upped their allocations for such technologies, and Kleiner Perkins are saying they're upping their allocation to "greentech" to $200mm.

Along with these announcements, the Chief Investment Officer at AIG told the CTVF audience that investment decisions at the firm are being made with the strong likelihood of a carbon tax in mind. And there's also been Richard Branson's little $3B announcement today, following up on the earlier mention of $400m being devoted to Virgin Fuels.

Of course, with all of this activity comes the inevitable "is it a bubble yet?" question. We've discussed this before. Suffice to say that a) yes, cleantech is now a venture capital darling, and everyone is looking to play; b) this means that certain sectors are starting to feel "bought up", with some deals being done at eyebrow-raising valuations (often really pre-revenue mezz rounds, and not true venture deals); but c) other sectors remain surprisingly unexamined.

As a judge on several categories in the California Clean Tech Open (big winners to be announced on Tuesday, and as disclosure, my firm is a sponsor), I can attest to this. The "Renewables" category was flooded with applicants... the "Energy Efficiency" category also had a fair amount of activity, but much less... and the "Water Management" category was surprisingly light in terms of both applicants and VCs volunteering to be judges. Granted, clean water technology remains an investment sector that is less-developed than solar and biofuels, or even energy efficiency. But it remains a huge, fast-growing sector with lots of big unmet needs that many innovative startups are targeting with scalable technology solutions. So to point out that the investment climate for solar technologies is "not a sustainable model" (not to pick on Joel, but they used his quote) misses the bigger point that there remain big technology sectors under the "Cleantech" investment thesis umbrella that are relatively untapped.

One of the theses of Cleantech Investing is that the investor interest being focused on solar and biofuels right now will eventually dig deeper into the other intriguing areas of technology-enabled energy efficiency (which will really get interest once carbon credits become more fungible), energy storage, water treatment, water management, advanced manufacturing, materials efficiency, etc.

Plus, even in the solar sector, good investment opportunities remain to be found. The amount of technological discovery being done in the sector is impressive, and there are big pain points throughout the value chain (not just in the PV cells themselves). It's a very big, fast-growing market. But these are all topics for another day.

Other announcements and news:
  • Marrone Organic Innovations announced a seed round of $550k. The company is developing weed control solutions for organic agriculture applications; the CEO, Pam Marrone, had previously founded AgraQuest. Seed round financers were not disclosed.

Tuesday, September 19, 2006

Solaria's $22mm Series B

Solaria, which is developing concentrating solar panels that use 2-3x less silicon for the same amount of energy, announced a $22mm Series B. The round included NGEN Partners, Sigma, Q-Cells, and Moser Baer. Solaria is anticipating commercial products as early as 2007; their products, although concentrators, will have similar form function to existing PV modules.

Deeya Energy and Tuesday Tidbits

  • New battery technology developer Deeya Energy has announced a first round of VC funding (amount undisclosed) from Blue Run Ventures, DFJ and DFJ Element. The company claims their technology will provide cheaper batteries with better charge/discharge characteristics. Energy storage remains a critical enabler for a lot of other cleantech applications (think Tesla Motors), as well as a large potential market in its own right.

  • First Reserve Corporation has bought a 50% stake in Blue Source, LLC. While not strictly a venture transaction, it's important for cleantech investors to view this as further signs of development of a real market for Greenhouse Gas (GHG) emissions reductions credits. Many clean technologies have the potential to lead to the creation of GHG credits for either the clean technology manufacturer or their customers, but as of yet the value of this remains mostly uncaptured as the market for GHG credits continues to develop. If GHG credits become standardized and fungible (and First Reserve is far from the only financial player to be making a bet that this will happen), it has the potential to unlock significant new revenue streams for a lot of cleantech firms, and thus create additional value for their investors. So it's a market to watch very carefully.

Other news and notes: We purposefully do not talk much about politics on this site, but given how past State of the Union announcements have impacted cleantech investment markets, it's worth noting that now we've twice heard this rumor... Here's a good story on the growth of solar in the Bay Area... Finally, here's an interesting column on GM and the hydrogen highway.

Friday, September 15, 2006

SolarCity, cleantech investor moves, and other news...

  • SolarCity, which is developing all-in solar packages for the home (including the solar system, net metering with the grid, and remote monitoring), has raised $10mm in financing led by Elon Musk. Musk will also be taking the Chairman role with the company. It's interesting that net metering is the stated goal, rather than storage, which is another take that other companies such as GridPoint are pursuing. Any other funders besides Musk were undisclosed.
  • A Denver energy venture capital firm is looking to hire an experienced post-MBA energy technology Associate. Those interested should contact Lynne Ballegeer at Phoenix Group International.

Other news and notes: Lots of talk about Google.org's plans to invest in plug-in hybrids... Here are some very useful stats on various energy markets... And here's a good overview of ocean/wave power... VentureWire mentioned on Wednesday that venture valuations have been going up almost across the board. Notably, median valuations for "advanced materials, agriculture and energy" went up from $7.9mm in 2005 to $14.8mm for the first six months of this year... Heard from an attendee of the recent EEVF in Zurich that there was a lot of interest and a big turnout -- and that the big joke was "Did anyone here NOT invest in Ocean Power Delivery?" (There are now apparently 15 investors)... Finally, Neal Dikeman has some useful thoughts coming out of the recent Investing in Solar Conference.

Wednesday, September 13, 2006

Aquarius Technologies, new regional cleantech funds, and other news

  • Aquarius Technologies, which is developing a "sludgeless" wastewater treatment solution, raised a $7.5mm Series A from L Capital Partners ($6.5mm) and private investors. The technology was brought over to the U.S. and licensed from Elif Technology, an Israeli firm.
Other news and notes: Solid-state lighting got a major validation recently with GE's $100mm purchase of the remaining 49% of GELcore (a former JV with Emcore), and partnership with Nichia... Here's an interesting solar-related interview.

Tuesday, September 12, 2006

BMG Seltec, Virgin Fuels, and other news

  • Cleantech VC DFJ Element has funded a $6mm round of financing to BMG Seltec, a provider of technology-enabled services for the asphalt and concrete industry. From the press release, it appears that Element was the sole funder in the round.
Other news: KCPB's Green Innovation contest has been announced... Speaking of biofuels, here's a great back-and-forth between Vinod Khosla and Robert Rapier on the subject... On the same subject, here's a nice column discussing efforts to increase the yields of energy crops... Finally, more details surfacing about Applied Materials' continuing solar efforts.

Tuesday, September 5, 2006

Cilion, Angstrom Power, Orb, Crystal IS, and Pangaea

Lots to catch up on:
  • Matt Marshall at VentureBeat had a scoop last week on a new $170mm raise by ethanol producer Cilion. The funders weren't disclosed, but it's known that existing investors participated alongside new backers -- Khosla Ventures and Western Milling put $40mm into the launch of the company way back in June.
  • Micro fuel cell manufacturer Angstrom Power announced an $18mm round of financing led by VantagePoint Venture Partners. Existing investors included Ventures West, GrowthWorks Capital, Chrysalix Energy, OPG Ventures, and Micro-Generation Technology Fund.
  • Orb Energy, a Singapore-based developer of solar-based backup and thermal systems, has raised an undisclosed amount of funding from zouk ventures' Cleantech Europe, Ed Stevenson's Renewable Capital, and the Singh Family. Orb is initially targeting the Indian market, and expects to build their first manufacturing facility in Bangalore.
  • Crystal IS, which has proprietary technologies for the production and working of aluminum nitrate substrates, has raised a $10.6mm Series B led by Lux Capital, with participation from 3i, ARCH Venture Partners, Harris & Harris Group, Credit Suisse (on behalf of the New York State Common Retirement Fund) and Taiwanese Linkmore Ltd. The cleantech applications of these substrates include solid-state lighting and UV for detection and purification of contamination (eg: drinking water).
Other news and notes: Q2 European energy tech investing was up 5x year on year, and was up significantly even if one excludes Ocean Power's big raise... The end of the silicon shortage is growing near, as illustrated by this recent announcement from Dow... We don't talk about politics much on this site (on purpose), but here's an interesting column by Matt Marshall about some wiser venture investors who have taken another tack, and likely provided some good impetus for the state's cleantech industry along the way... Here's an interesting column which shows how cleantech IPOs might be leading the way when/as the IPO window opens back up.

Tuesday, August 29, 2006

Keronite, Ze-Gen, Start Green, and various backlogged news items

  • Keronite, which is using a plasma electrolytic oxidation process to improve the surface characteristics of aluminum and magnesium so they can be used in place of heavier steel, raised a GBP10.2mm private placement. The major funders included Hotbed business angels, RAB Capital, Bank of Scotland Growth Equity, Quester, Fidelity, and New Star. GBP5.5mm will be used to pay off shareholder loans and bridge financing.
  • Yet another new cleantech investor on the European scene, as Start Green has been formed in the Netherlands. The firm plans to deploy 8mm euro into sustainable technology startups in the region. Fortis Venturing, Triodos Innovation Fund, and DOEN Participaties have provided the funds.
  • Energy storage news: Good articles with updates on energy storage technologies here and here...

Monday, August 28, 2006

Used Cardboard Boxes, Waste Remedies, and Altira

  • Waste Remedies, a consulting firm that focuses on waste disposal optimization for property managers, manufacturers and retail / restaurants, announced a raise of $8.5mm from Advantage Capital Partners, Southwest Bank of St. Louis, and management. Advantage provided $2.3mm of the raise.
  • In cleantech investor news, today's VentureWire mentioned that energy tech investor Altira Group is out raising a new fund.

Tuesday, August 22, 2006

Tonight's REBN happy hour: A sign of the times



Thanks very much to the Antenna Group and Nick Allen for pulling together a terrific happy hour tonight. Many good renewables conversations flowing around the room.

They said there were 70 rsvps, but it certainly seemed like the crowd was bigger than that.

One of the better REBN events so far. Next time we'll have to have door prizes.

Biorem, Biox and other news

  • (self-promotion alert) It was recently announced that Expansion Capital Partners' Clean Technology Fund II, LP has agreed to purchase an additional 1,700,000 shares in Biorem Inc. Biorem's proprietary biofiltration media is used to control air pollution in municipal and industrial applications. They're publicly-traded on the TSX Venture (BRM.V). This agreement would bring Expansion Capital's total ownership up to 25.9% of outstanding shares.
  • Courtesy of Tyler: Another Canadian cleantech company, Biox Corp., raised C$70mm, including C$48mm from Birch Hill Equity Partners. The company's proprietary biodiesel production process has already been implemented in one commercial scale plant in Ontario.

Other news and notes: Solar in California got a boost with the recent signing of the new state solar law -- but the really interesting data is found here, where Excel junkies can download several years' worth of solar system sizing and cost data for the state... Zenergy becomes the latest cleantech company to do an AIM listing... Finally, looking forward to seeing everyone for the Antenna Group - Renewable Energy Business Network happy hour at the 111 Minna Gallery tonight at 6pm.