Cleantech VC 2016: 8 Early-Stage Energy Investments

Despite a challenging investment climate, here are eight early-stage companies that have raised VC funding in the first few weeks of 2016.

Eric Wesoff January 25, 2016

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Venture capitalists invested $58.8 billion into U.S.-based startups in 2015, according to Thomson Reuters, PwC and the National Venture Capital Association -- the second-highest figure recorded.

But VCs continue to turn a blind eye to the cleantech sector -- with less than $700 million invested in the last quarter of 2015, according to Clean Energy Pipeline, and just a fraction of that total going to early-stage deals.

Nevertheless, we've managed to find eight earlyish-stage cleantech deals to start off 2016.

Powerhive, a microgrid developer and financier for emerging markets, closed a $20 million series A financing round led by Prelude Ventures along with Caterpillar Ventures, Total Energy Ventures, Tao Capital Partners and Pi Investments. The funding will be used to grow Powerhive’s footprint into new markets in Africa and the Asia-Pacific region, as well as to support continued expansion in Kenya. Recently, Powerhive received a $12 million equity investment in its flagship project, which is seeking to develop microgrids that will serve 90,000 people in western Kenya. The Berkeley, Calif.-based company has offices in Nairobi and Manila, and received early backing from First Solar. Off-grid renewable energy companies raised close to $200 million in 2015 versus the roughly $64 million invested in off-grid solar solutions in 2014.

MPrest just raised $20 million in equity funding led by GE Ventures and OurCrowd in its series A. The startup provides software to “connect the dots” across "multiple complex systems of any scale for real-time situation awareness [and] predictive analytics" and is bringing its technology to the internet-of-things/utility market. The firm is already working with New York Power Authority and Israel Electric Corp. The company has also contributed to Israel's "Iron Dome" defense system.

London-based Telensa, a 10-year-old developer of networked LED street lighting equipment for "smart city" applications, raised $18 million in equity and debt from Environmental Technologies Fund and Silicon Valley Bank. Telensa already has hundreds of thousands of endpoints networked using its low-power wide-area wireless technology. The company is a founding member of the Wireless Internet of Things Forum.

Mercatus, a cloud-based provider of "Energy Investment Management" (EIM) solutions to energy producers, developers and financiers, raised $11.7 million in series B funding led by Traverse Venture Partners and TPG’s Alternative and Renewable Technology fund, along with existing series A investors Vision Ridge Partners, Trepp and Augment Ventures. Josh Green of Traverse said, "In the current era of rapid energy industry transformation, we see Mercatus’ EIM solution as a critical enabling technology that accelerates the mass deployment of distributed energy." Mercatus is seeking to speed up "the investment of massive amounts of capital required by the energy industry,” according to Haresh Patel, the company's CEO.

Pellion Technologies, a Cambridge, Mass.-based developer of a magnesium battery technology with a potentially high energy density, raised an undisclosed amount of funding from Motorola Solutions. Motorola joins previous investor Khosla Ventures, along with the DOE. David Eaglesham, former CTO at First Solar, is the CEO of Pellion.

Small modular reactor startup Terrestrial Energy closed $8 million in funding from undisclosed sources for its Integral Molten Salt Reactor design, according to SEC documents. Terrestrial's chairman Hugh MacDiarmid is on the board of two companies financially involved with the $106 billion Ontario Teachers’ Pension Plan, suggesting their undisclosed involvement here. The small nuclear reactors are intended for industrial process heat markets, with market deployment targeted "in the 2020s."

According to SEC documents, Geli, the distributed energy storage software developer, has raised $3 million of a $9 million funding round from undisclosed investors. Strategic funders will fill out the rest of the round, according to sources.

Voltaiq closed on $1.6 million of a $3 million funding round, according to SEC documents. The startup is developing software to track and analyze the performance of batteries with analytics and big data. Michael Berolzheimer, an investor at Bee Partners, is listed on the SEC document. CEO Tal Sholklapper co-founded Point Source Power, a fuel-cell technology firm funded by Vinod Khosla.