Hydro Venture Partners, the US Army's OnPoint venture group, CMEA, Nth Power, Innovation Valley Partners and Battelle Ventures have invested a new round into SuperProtonic, which manufactures solid acid fuel cell technology. Details of the funding don't appear to have been disclosed. The company is still at a pre-prototype stage. Those curious about this form of fuel cell technology can read more about it here.

See this interesting article from BusinessWeek which describes how mainstream VCs are now searching for new industries in which to invest, as they look to avoid focusing too narrowly on IT and telecom. And so, naturally, in an era of high energy costs they have been drawn to emerging energy generation technologies and related investment areas. As the article describes (and as regular readers of this site will agree), it's difficult to find any large traditional VC firm that hasn't at least considered an investment in solar power recently. (Which may make one read the quote about "contrarian investments" a bit differently...)

This raises a number of questions that dedicated cleantech investors should be asking themselves:

• Are the traditional telecom/IT/biotech VCs moving into cleantech permanently, or is this a temporary trend driven by a few timely factors such as the high price of oil?
• Are the traditional telecom/IT/biotech VCs focused primarily on solar right now because it is best-positioned for a near term breakout among the many different cleantech investment areas, or is it a bit of a "herd mentality" effect at work? If the latter, will these traditional telecom/IT/biotech VCs eventually look more deeply into the other potentially lucrative cleantech investment segments, and if so, when?
• Is this a threat or an opportunity for dedicated cleantech investors?

My personal belief is that the trend of very large VCs looking to bet broadly across a wide range of investment areas is a permanent one. Unless LPs begin to invest less money into traditional venture capital (and that doesn't appear to be something that will happen anytime soon), there will be a need to look for new places in which to deploy that capital. The recent news about rising valuations is a testament to that. And the cleantech investment thesis makes too much sense to be ignored. So I do think that the traditional telecom/IT/biotech VCs are in cleantech to stay. However, the depth to which they are able to engage in cleantech will always be somewhat limited -- the nature of being a generalist vs. being a specialist. Thus, these investors will tend to invest in areas where their generalist breathren are investing (ie: solar today), and only slowly expand into other areas.

However, as Patrick Ennis' quote smartly points out in the BW article, "All the great, innovative investments are always in areas that the herd is avoiding." Thus, visionary telecom/IT/biotech VCs will look to partner with, learn from, and co-invest with dedicated cleantech VCs who can point them in the direction of "unsexy" investment areas with strong near-term potential, and who have the industry knowledge and connections to be able to both identify well-positioned companies and help them grow. The broad-based VCs will bring the deep pockets, and the dedicated VCs will bring the expertise. And in the meantime, LPs will also continue to seek further diversification by investing with both broad-based and dedicated cleantech venture firms.

Thus, to answer the last question, this trend probably is a terrific opportunity and legitimization for the dedicated cleantech investing community. ...But not without some hiccups, undoubtedly.

• http://cleantechvc.blogspot.com has always been a bit of a mouthful of as a web address, hard to say, and harder to remember. As the interest in this site has grown significantly over the past 5 and a half months, it began to be a bother, so starting yesterday www.cleantechvc.com now gets you here as well. Hope that makes things easier for everyone...

• Even easier to get to: Very happy to report that this column is now being syndicated on the Cleantech Venture Network's site, along with Tyler Hamilton's insightful Clean Break blog and columns by Nick Parker and Keith Raab of the Cleantech Venture Network. The team at the Cleantech Venture Network does terrific work, and my firm Expansion Capital Partners has had a terrific relationship with the group since their formation, so it's terrific to have this personal link as well.

• Semi-regular reminder: Please donate to Katrina relief efforts, such as those of the Red Cross and others...
  

Haven't been able to find it posted anywhere on the web yet, but today the clean energy VC firm Chrysalix Energy Management announced three new investments:

• Cyrium Technologies, which is using so-called "quantum dots" (we've discussed before in context with another company) in GaAs photovoltaic applications

• SiM Composites, which the Chrysalix release describes as "creating unprecedented proton exchange materials based upon multifunctional silica and polymer." Mike Walkinshaw of Chrysalix is quoted as predicting that,

"We expect to see SiM's membranes revolutionize many proton exchange membrane markets due to their improved performance and lower cost. Their technology could have a significant impact on fuel cells for stationary and automotive applications as well as membranes for water desalination."

• Ardica Technologies, which is developing simple micro fuel cells for consumer products.

No information on the financial details of these rounds was provided in the release.

[Note: edited 9/19 to correct some information from the companies]

AgION, which was recently named one of Red Herring's "100 Hottest Private Companies In North America" (and we also discussed them here), announced a $3M raise from strategics BASF Venture Capital and HB Fuller Ventures. The company's proprietary technology for impregnating materials with ionic silver is used to fight microbial growth in a number of applications, including water filtration, food packaging, medical devices, etc.

In all, the company has raised $40.5M since 1997.

Altela, an Albuquerque-based company whose proprietary technology helps to clean the waste water from oil and gas extraction, announced they raised a first funding of $750k.

Cleantech investors and observers may reasonably disagree about the inclusion of any oil and gas extraction-related technology under the "Clean Technology" umbrella. Some may feel that any technology which makes oil and gas extraction more efficient isn't "clean". Others (and I lean this way myself -- but please note the disclaimers all over this site) would note that oil and gas extraction is not going to go away anytime soon, so as long as we're going to be extracting it out of the ground, doing it in such ways as to minimize the negative ecosystem impacts is at least a "cleaner technology" that fits well within the cleantech investment thesis. Domestic oil and gas extraction produced 756 billion gallons of waste water in 1995...

Certainly it is a potentially lucative investment area, with current disposal costs at $5/barrel (each barrel is 42 gallons). Investors in this round include EnerTech, Verge venture fund, and local angel group Sandia Capital Partners LLC.

Cleantech VC investments grew 32% year on year, according to an announcement released today by the Cleantech Venture Network. In all, $369M was invested in 55 identified deals in North America and Europe.

Energy investments, unsurprisingly, made up the majority of the total.

It should also be noted, following up on my post from back during the slow period in August, that indeed cleantech dealflow has picked up again as we've moved into September, as regular readers of this site will have already observed...

[ed. note: changed as of 9/13 to correct an inaccuracy in my original post... rd]