Verdiem, a Seattle-area firm with energy-efficiency solutions for large corporate computing networks, announced that they have raised a second round of funding of an undisclosed amount. Catamount Ventures and the Angeleno Group invested in the round, which brings the total amount of funding that Verdiem has raised to $6M. Phoenix Partners and Falcon Partners were previous investors in the firm.

Verdiem has developed software which allows IT departments to remotely control the energy management settings of computers in their corporate networks, which helps enforce energy savings efforts (how many computers in your office are left on all night, with some graphic-intensive "screensaver" running?), driving cost savings. The company's offerings currently target desktop PCs, but they are also developing solutions for servers and other energy-using portions of computing networks.

"Water is the New Oil" is the most popular catch-phrase for water venture investing. Witness this article from Red Herring today. There's not a lot in the article that hasn't been described here before, but it's a good overview.

Observent readers of this site may have noticed that there haven't been as many announcements of new cleantech-related deals recently. In fact, since the beginning of August we've tracked only 3 such announcements, whereas for July the number was at least 16. And June had a number of notable deals, reflecting a generally strong Q1 and Q2.

Is cleantech dealflow drying up?

Most probably not. It is, after all, August, which means the lawyers, PR folks, and even (shhh) a few VCs are on vacation, which will push off deal closings and announcements for a while. It also makes due diligence efforts a little tougher, because customer references and other important contacts are out of the office.

This is one reason why Q3 has always been the slowest quarter -- looking at PWC Moneytree Survey data, and using the Industrial/Energy category as a (admittedly poor) proxy, since 1995 the average number of deals in the space by quarter has been:

Q1 = 40.8
Q2 = 40.6
Q3 = 37.6
Q4 = 42.5
(Note, excludes Q1 and Q2 '05, to help make comparisons fairer)

Which makes it look like a likely pattern is that Q3 deals are delayed by vacations, etc., and end up slipping into Q4 often enough to make a slight difference. Since July and September are probably not the down months out of Q3, this shows that August is the real doldrums of dealflow in this sector.

But still, we are more than halfway through the month, and 3 seems awfully light. Is there something else going on?

Probably (hopefully) nothing too severe. Certainly my firm, Expansion Capital Partners, and -- anecdotally -- others have seen strong dealflow over the last few months, which should be converting to closed deal announcements in September/ October. For there to have been a non-cyclic dip in deal closings now would imply that dealflow slacked off significantly in the May/ June timeframe. That just didn't seem the case. Instead, there are a few other factors probably at play:

• A significant minority of VC firms in the cleantech space appear to be temporarily pulling back on new deals while they undertake new fundraising efforts. All of the firms who are in such a situation that I've spoken to plan to get back into full-scale investing soon (if all goes well), but are right now simply in between funds. That could have a general slight dampening effect on Q3 and Q4.

• The new energy bill's timing may have affected a few deals, if investors saw the policies and regulations as having a significant impact on the prospects of their investments. Such VCs may have played a bit of wait-and-see to find out what the final bill would look like. Now that it's signed, if there were any deals that had been held up they should soon be given the go-ahead.

• There's a general trend toward deals being kept unannounced. There may be deals that have been completed recently that are being kept "stealth" for whatever reason.

• Finally, the randomness factor. Timing of deals is always a bit random. And then there's the randomness involved in yours truly's ability to ferret out all the deals -- we try our best, but we undoubtedly miss a few deals that should have been reported.

Again, however, these wouldn't seem to be critical factors, and yet still 3 announcements so far in August is pretty light, a lower number than this observer has the impression of from previous years.

Has there been a sudden general pull-back in cleantech venture investing? Or is this just a particularly light August, and September dealflow will be robust again? We'll have to wait and see. But my guess is that it's the latter.

In news of interest to northern California and bay area cleantech followers, we've recently heard about a forthcoming incubator/ real estate development ("Sonoma Mountain Village") which Codding Enterprises is planning to build.

Codding Enterprises is a local developer, whose CEO Brad Baker is also a partner at American Biodiesel, and you can see a pdf presentation about the Village here. The intention is to provide working space, (relatively) inexpensive living space for workers, and other support for cleantech, socially-responsible and other startup businesses. The site is a former Agilent campus. There's also a description in this article from back in May, along with some news about some potential (as well as some no longer interested) tenants. It's unclear what kind of funding, if any, will be part of the "incubator" offering, but Business Cluster Development (BCD) of Menlo Park is pulling together the business plan.

We also hear from Robert Coleman at the Pacific Venture Club that Baker will soon be featured as one of their internet audio programs, where he's been invited to describe the project, so look for that in the coming weeks.

It's been a slow month so far for cleantech deals, at least the ones that have been announced. But there have still been some news items of interest over the last few days:

• The high cost of high-quality silicon has been a big challenge for the solar industry. Many of the recently-funded solar startups are working to avoid the use of silicon altogether. But now comes word of another alternative, as UC Berkeley researchers have developed a way for PV to work with low-grade "dirty" silicon.

• Here's a cover article in Forbes on GE's Ecomagination effort, following up on what we've previously said about its importance for cleantech investors. (Registration req'd to read the article)

• We've talked before about the debate out SOFCs. In a bit of a mixed signal, here's news of a DOE contract being awarded to GE Energy to pursue coal-fueled SOFC. It's a mixed signal because, while it's a good forward movement for the technology overall to see such attention and resources devoted to the space, it's also a sign that a significant share of the funding and endorsements are already going to large players, even before the smaller startup vendors can get good market traction for themselves.

• With thanks to Tyler Hamilton (Clean Break) for the heads up, MIT Technology Review has an interesting article about advanced materials being used on surfaces to be both self-cleaning and clean the air.

• The emerging solar industry ecosystem continues to come together. Public policies are increasingly being put in place to encourage adoption, technology continues to advance, and now there's even more word of financing options being made available, this time by Nationwide Mortgage. This follows on the emergence of financial-focused developers such as SunEdison, and the news that GE Commercial Finance is developing options to finance rooftop systems. Now if mounting systems and installation costs could be better optimized, the broader feasibility of solar would really start to improve...

• Finally, Joel Makower as usual has something insightful to add, this time about the educational challenges that are proving to be an obstacle to broader adoption of clean energy technologies.
  

Interesting article on the potential application of nanotechnologies in the water industry:

The technology and the business case are there, says Mr. Harper; they just need capital to get going. Mr. Harper is behind a global organization called Nanowater.org, which acts as a bridge between water remediation companies and nanotech firms. “If we could get funding now, we could have initial results in six months, field trials in 12 months to 18 months, and be saving lives within two to three years,� he says. “Nanotechnology is developed, but not for water.�

Harper appears to be bringing strategic investing into the industry, but his point is just as true for VC funding.

According to PE Week Wire, Sensys Networks announced a Series B round of funding led by the communications-focused venture capital firm ComVentures. Sensys Networks has a wireless traffic sensor for monitoring congestion on freeways, allowing commuters to spend less time idling in traffic jams. We've mentioned this kind of application before, and it continues to be an interesting area for potential investment...