Pentadyne Spins $22M for Flywheels

Pentadyne Power Corp. this week said it has raised $22 million in the fifth round of funding for its flywheel technology.

The Chatsworth, Calif.-based company's flywheels - spinning discs that store energy and deliver a few seconds of power during blackouts to bridge the critical gap before backup generators kick in - are made of a carbon-fiber composite material.

Pentadyne claims the material is 10 times stronger than steel, which allows the company's flywheel to spin faster, so it can be smaller than its competitors' flywheels while delivering the same amount of energy.

The company didn't identify the investors behind the round (see VentureBeat post). In an announcement Monday, which said the round closed Sunday, Pentadyne said it would use its newly found capital to expand into new markets, but also didn't name those markets.

The latest round brings the company's total funding to $68 million. Pentadyne raised $14 million last year (see Pentadyne's 'Top Secret' Plan). The company also closed $18 million in a third round in 2005 and announced it had scored an undisclosed amount of funding in a second round in 2002. When it closed the Series C round in 2005, the company said it had raised a total of $32 million.

Backers in previous rounds include Loudwater Investment Partners, Rustic Canyon Partners, Nth Power, DTE Energy Ventures, Accera Venture Partners, Sempra Energy and other private investors.

In July, Pentadyne announced its sales had surpassed those of Active Power (NSDQ: ACPW), making it the No. 1 supplier of flywheel energy-storage systems.

But the flywheel market is still tiny compared to the $30 billion worldwide battery market, even though flywheel technology has been around for decades.

Active Power posted revenue of $14.3 million for the first half of the year and a net loss of $8.9 million. Pentadyne said it had shipped 34 percent more flywheel systems than Active Power, implying sales of around $19.2 million.             

Flywheels come with higher price tags than batteries, for one thing, although advocates say flywheels require less maintenance - more than making up the cost in a few years in applications where downtime is expensive.

In July, Pentadyne said it has been growing at a rate of more than 40 percent annually.

The company's flywheels have been installed at airports, such as the San Jose International Airport in California and an unannounced European international airport, as well as at a data center in Utah, a technology research center in Nebraska, a digital-television transmission facility near Denver and a number of hospitals, among other places.