First of all, comes the news today (from Jonathan Shieber at VentureWire) that Element has done a first close on their latest fund at $270mm, and that it's likely they'll "fly past" their $400mm stated target. A very good example of how the sector continues to shift toward later stage: One LP (LACERS) reports that Element plans to allocate only 20% of the fund to early stage investments, with the rest going to expansion stage and later stage. They're far from alone, and this news is proof of the continued strong LP interest in the sector.
Secondly, on the topic of biofuels and food prices (headline stuff these days), stay tuned for an upcoming report from New Energy Finance on the subject... As a preview, there's the following passage:
New Energy Finance has analysed food price increases between January 2004 and April 2008, breaking them down into their constituent drivers: input costs, dollar depreciation, supply-demand factors and speculative activity (see Figure 2). We conclude that increased biofuels production has been a meaningful driver of food price inflation, particularly in certain crops and geographies, but it is far from the dominant factor. Increases in input costs have played a much larger role, as have changes in consumption habits and increases in global population which, for the first time in decades, have not been offset by increases in agricultural yields, particularly in grains (see Figure 3). Furthermore, where biofuels have had significant impacts, this has been due to overly-rapid application of support schemes and protectionism, rather than to the impact of production on land use itself.
Thirdly, I thought this passage from Tim Healy's (EnerNOC) Chairman's Letter was also worth quoting:
I believe that energy is one of every company’s five basic inputs, along with land, labor, raw materials and tools. (Information Technology, the realm of the CIO, is a subset of tools.) But in most cases, energy is the only one that is not actively managed. Corporations invest time and talent in assessing and developing land; in managing and motivating labor; in forecasting and negotiating the price and supply of raw materials; and in sourcing and procuring equipment and tools. Energy hasn’t normally received a similar level of senior executive attention. For example, US corporations spent an estimated $129 billion per year on telecommunications in 2007, and all of them also invest in advanced products and services to actively manage these systems. But less than one per cent of companies make a significant investment in advanced technology to manage electricity, even though electricity spending was greater at approximately $194 billion per year.
Are the above three notes sobering? Encouraging? Readers will judge for themselves.
Deals from the past few days:
SmartSynch, a smart meter technology developer, raised $20mm in expansion funding from Credit Suisse. This follows on their $10mm insider Series D last year.
CamSemi, a UK developer of energy efficient power controllers, expanded their Series C by $8mm, with BankInvest Group providing the financing.
CrystalQ, a Dutch developer of sapphire wafers for use in white LEDs, raised an undisclosed amount of financing from Sustainable Energy Technology Fund (SET Fund), EPT / Benno Wiersma and E2 Cleantech.
Rob Day is a Partner with Black Coral Capital, based in Boston. He has been a cleantech private equity investor since 2004, and acts or has served as a Director, Observer and advisory board member to multiple companies in the energy tech and related sectors. Rob was a co-founder of the Renewable Energy Business Network (www.rebn.org), a non-profit organization which was acquired in 2009 by the Clean Economy Network. The views expressed on this blog are those of Rob, not necessarily the views of any of his colleagues and affiliated organizations. Contact Rob at .(JavaScript must be enabled to view this email address).
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