Viewing posts tagged "Clusters"

Watch out for giant flying turtles!

Well, guess we know where some of that big wave in cleantech “growth stage” capital is going…  VentureWire is reporting today that Miasole is “wrapping up” a new $200-220mm round of financing, at a pre-money valuation of about $1.2B.  VWire reports that the company was looking initially at a $150mm round, but investor interest pushed the size up a bit.  Doesn’t sound like the deal is closed yet, so details are still yet to be divulged, but it’s a notable piece of news in an otherwise slow week.  [Full disclosure notice:  I am a small personal shareholder in Miasole]

For other deals and cleantech investing news, see GTM’s latest Funding Roundup.

Cleantech cluster news:  Here in the New England region, the big news is that Massachusetts’ Green Communities Act has now been signed into law.  It’s an important change, promoting energy efficiency, renewables, and regional entrepreneurial efforts.  Gov. Patrick wrote about it in an op-ed yesterday that’s worth checking out.  Kudos to everyone involved in the effort (including the New England Clean Energy Council, among other strong proponents)...  Seattle, on the other hand, isn’t moving forward as much as it should, says one observer...  On the opposite side of the planet, meanwhile, IFCI Venture Capital is launching an Indian Green Venture Fund targeted at Rs 330 crore.

Other news and notes:  Early indications are that Q2 remained a strong quarter for cleantech investments, but we’ll have to wait until the numbers start being released soon…  The always snarky Earth2Tech picks on BlackLight Power (dedicated readers might remember them from our mention of them a couple of years ago)...  And finally, here’s the reason for today’s headline.

The auto industry needs to engage the VC and innovator community

Had the pleasure of attending Ernst & Young’s Cleantech Ignition Session earlier this week in NYC.  An invite-only group of about 30-40 transportation industry participants, including representatives from government and inside the beltway, from transportation OEMs and suppliers, and from the investment community.  The topic:  “Leveraging cleantech to build a sustainable advantage in transportation.”

E&Y will be writing up a report on the session for later release, and until then, what was said in the room stays in the room.  But there were a number of very good thoughts in the wide-ranging, open discussion, and some compelling ideas.  I’ll highlight one in particular, just because it was said by me, so no disclosure problems here (sorry, but you’ll have to wait to read about all the more insightful comments made by other participants):

It seems to me that the auto industry has a very intriguing opportunity right now to use all of the recent entrepreneurial and investment activity in clean transportation tech to their benefit.  This opportunity could help them address the evident “gap” between highly innovative demonstration vehicle programs, and the historically slow pace of adoption of core innovations into mass-production models.

It’s no surprise that such a gap would exist.  It’s relatively inexpensive for such large organizations to spend money on onesy-twosey demonstration vehicle programs where the engineers can play around with new technologies to see what might work.  But scale-driven economics means that, in order to get costs down, standardization and large production runs have to be the operational model.  And it’s a huge gamble to integrate a very core, and very different, technology into a large production run vehicle.  So it’s relatively easy to do something very unique at the demo level, it’s almost impossible to get someone to take a potentially Career-Limiting Move of integrating new tech into a full-scale production vehicle, and there’s no in-between.

But now there’s an in-between.  Outside the OEMs themselves.  But instead, in the entrepreneurial efforts out there.  And during a time when auto R&D budgets are being slashed, the transportation industry is possibly being turned on its head, and public (and regulatory) pressure are mounting for greener options to be seriously pursued, it’s time for the auto industry to more actively engage.

Auto OEMs could be meeting with, challenging, investing in, and co-investing with the cleantech VC community.  What the chemicals, forest products, and many other industries have found is that the venture community can be an important conduit for identifying and working on new innovations, large to small.  And for getting a ring-side seat while those innovations are being tested in other early markets, proving themselves out.

Likewise, the Auto OEMs could be collaborating or even partnering with some of the upstart OEMs being launched by entrepreneurs—these small production volume plays will be a great early testing ground for innovations that then the incumbent OEMs could more confidently integrate into their own future products, but only if they get first-hand knowledge of what’s working and what isn’t.  So it would have to be engineer-to-engineer collaborations, not just high-level PR events.

There have been some early signs of the above shifts possibly starting to happen.  But only starting to.  It would be smart for Detroit to take on an even more deliberate commitment to engaging the venture and entrepreneurial communities around serious innovation efforts.

Deals from the past few days:

• Rubber recycler Lehigh Technologies raised an undisclosed (but “significant”) amount of financing from Kleiner Perkins and Index Ventures, with the proceeds going to fund the building of a second plant next year (at a cost of $15mm)—this, according to VentureWire.  The company had previously raised more than $18mm from NGP Energy Technology Partners and others.

• Ensartech, which is developing a smelter-based waste conversion technology (perhaps akin to Ze-Gen’s?), announced an undisclosed amount of investment from Netherlands-based Icos Capital.

• One deal where the amount WAS disclosed was Spectrawatt’s $50mm round, led by Intel Capital, with participation by Goldman Sachs subsidiary Cogentrix Energy, PCG Clean Energy and Technology Fund, and German solar company Solon.  The silicon-based PV manufacturer is a spin-out from Intel.  Not to be outdone, IBM this week also announced plans to get into CIGS manufacturing via a JV with a Japanese partner.  Interesting build vs. buy decisions evident in the solar industry right now…

Other news and notes:  More on politics, since ‘tis the season—here’s a recap on some recent developments out of the campaigns, related to cleantech…  Cleantech cluster-building around the globe continues—see The Nordic Green Network, and this interesting column tying climate change regulation in California to the growth in regional cleantech VC activity…  Even Beaumont, TX is getting in on the action...  “The anti-cluster-building” effort (in a good way) of the Virtual Energy Forum has finished for now, but you can still log on and view some of the happenings…  Not sure I agree with all his sentiments (although I appreciated the kind blogger-to-blogger ‘shout-out’), but Mark Modzelewski is certainly throwing down the gauntlet...  Meanwhile the Cleantech Avenger wonders why we can’t all just get along...  EcoSearch donates your Google search generated ad revenue to green causes…  Neal is looking for bloggers to join in with the HuffPo of cleantech…  Finally, VentureBeat has word of a $3B cleantech private equity fund being raised.

“How do I break into cleantech?”

As the sector heats up, far more people than I can possibly help are approaching me with this consistent question.  And while it’s a bit frustrating not to be able to help out as much as I would like, it’s certainly encouraging for the sector to see so much smart business talent seeking to get involved.

Almost 3 years ago now I wrote up a post on breaking into the sector, and most of it still applies well.  One major difference is that there are a lot more opportunities to get involved, given the sheer number of additional business efforts underway now.  So take heart, job seekers!

But also take to heart that the single most important thing to remember is that it’s probably best to look to take what you already have been doing and figure out how to translate that into a cleantech context.  If you’re a sales and marketing professional, what industries have you been selling into, and what are their energy, water and materials needs?  If you’re an operations professional, what clean technologies require similar manufacturing approaches?  Etc.  Too often the individual job-seekers or entrepreneurs seem to be wanting to simultaneously change markets, skillsets, etc., in order to go after the “hot” market segments.  But the great thing about cleantech for investors and job-seekers alike is how broad and varied clean technologies and cleantech markets are—and how much they tend to resemble other, more traditional sectors one way or another.

So find the place where you fit and are needed, don’t just go after the sectors getting the headlines.

Other ways to get involved:  The California Clean Tech Open is soliciting entrants, but the deadline is TODAY, so sharpen your pencils and get to work on that business plan…  And in a lighter-touch vein, REBN is working with The Economist on their Corporate Sustainability Debate, join in and have fun with it.

Deals from the past week:

• Congrats to Joel:  Greener World Media has raised a $1mm Series A round from the K Group.

• Eco2 Plastics raised a $6.5mm PIPE led by Trident Capital and Thompson Hutton, LLC.  Over $6mm in notes and interest also converted as part of the round.

• Chrome replacement company Helios Coatings announced a $4mm round of financing led by Hopewell Ventures.

• Algae-to-biodiesel startup Aurora Biofuels announced an insider $20mm Series B, led by existing investor Oak Investment Partners.  Previous investors Gabriel Venture Partners and Noventi also participated.

• Cleantech Invest AG announced an investment in Sinosol, a German-Chinese photovoltaics company.  Sinosol also announced plans for an IPO.

• Cleantech investors in the news:  Jim Matheson of Flagship Ventures has been writing up his experiences touring around the UK discussing cleantech—check out his adventures here, here and here.

• Cleantech cluster-building:  A report by the New England Clean Energy Council says that cleantech could bring in $1B in local investment by 2012…  Also, here’s a nice write-up on the Council’s newly-formed fellowship program.

Other news and notes:  Cleantech patent activity has been pretty flat over the last couple of years—with some of the hotter sectors seeing some curious declines…  Toyota puts PHEVs on a path for 2010 commercialization...  More and more, the consensus seems to be that water is the next big thing…  Finally, Earth2Tech did a nice FAQ on Obama’s energy policy proposals.

The Innovation Cycle and the Commercialization Cycle

Looking forward to seeing everyone at our REBN-East networking event at Boston University on Tuesday night.  As a topic for discussion, I’ll throw this thought out there:

Had the pleasure of visiting NREL last week as part of a productive trip organized by the New England Clean Energy Council.  There, I and around a dozen other VCs from the Boston area were presented to by several of the Lab’s researchers in areas like solar PV, biofuels, energy storage, etc.  It was a good opportunity to once again peak “under the hood” at a DOE energy lab, to get a quick overview of some of the world-class research being done there.

It was necessarily a brief overview, but one thing that came through for me loud and clear (yet again) was how short the Innovation Cycle is in many of these sectors.  Yes, each innovation in an area like solar is often the result of years of difficult research.  But with so many efforts underway in parallel (at NREL and elsewhere), the results mean that every year there’s a new bright idea for how to eke out more electricity from available solar resources (for example).  New materials, improved manufacturing techniques, more effective components…

In many cleantech sectors there’s a backlog of these kinds of innovations, as the ideas languish uncommercialized in the labs and the literature, awaiting visionary entrepreneurs and investors.  But in some of the more investigated sectors, investors are quick to jump on the latest innovation out of the various centers of research.  Breakthrough innovations funded last year are trumped (on paper, at least) by this year’s funded innovations, and they’ll all be trumped by next year’s funded innovations.

Meanwhile, we’re all still waiting on many of the innovations from several years back to be fully commercialized.  Continuing to pick on the solar sector as illustrative example, we’re all still waiting for many of the promised thin-film manufacturers to fully hit the market.  That’s not to cast doubt on those players, it’s just a lesson in how long the Commercialization Cycle is for these technologies.

So the questions for Tuesday’s REBN-East event are these:

1.  Put on your “green cluster-builder” hat—what could this disparity between the Innovation Cycle and the Commercialization Cycle mean in terms of key roles for public policy?

2.  Put on your VC hat—what could the disparity mean for investors?

Speaking of cleantech clusters:  The NECEC has launched a new Fellowship Program to help experienced entrepreneurs from outside the industry to gain familiarity with clean technologies and launch the Next Big Things.  Check it out!

Deals from the past week (-ish):

• Grid-scale solar energy developer eSolar has raised $130mm from Idealab, Oak Investment Partners, and Google.org.  They plan on building a demonstration plant later this year.  Back in January we passed along word of Google’s $10mm investment—no word on whether this new investment figure includes that or not.

• Kleiner and RockPort have teamed up to help launch Th!nk North America (no, that’s not Al Gore’s latest public awareness campaign, it’s a car company), in partnership with Norway-based Think Global.  Think Global was already a portfolio company of RockPort’s.  Fortunately for the company, it would appear that Th!nk is not “very cute”.

• Ireland-based NTR has put $100mm into Stirling Energy Systems in what has been called an “investment,” but did result in a 52% ownership for NTR, so is really a bit of an acquisition.

• River- and tidal-energy system developer Hydro Green Energy has raised a $2.6mm Series A led by The Quercus Trust.

• Sensicore has apparently been acquired by GE.

Cleantech investors in the news:

• British Columbia has launched a new $90mm venture capital fund, managed by several institutional investors, with cleantech as part of its mandate.

• Bill Weihl in a good interview about Google’s renewable energy activity (but he won’t dish on which technology he thinks is overhyped).

• Piper Jaffray looks to ramp up their activities in cleantech.

Other news and notes:  Interesting article on something we’ve talked about before—the project financing challenge in cleantech…  Seattle-area VC firms “chided” over their relatively low cleantech investment amounts…  A good article illustrating how “green collar jobs” are being targeted for economic growth...  But on the other hand, some argue that the lack of strong technical talent in the sector is a continuing challenge...  Dallas points us to an update on the peak oil argument…  GTM puts out their updated Top 10 startups list—apparently the unstated 7th criterion is how much effort the company puts into PR (full disclosure: @Ventures portfolio company Powerit is mentioned)...  Finally, some tips on green choices consumers can make, from the recent NYT “Green Issue” (full disclosure: @Ventures portfolio company M2E Power is mentioned).

Odds and ends at the end of the week

A few things of potential interest…

• A good tool for all you cleantech VCs and Founders out there:  Joel Moxley, an EIR at Northbridge, came up with a pretty useful prior-art search engine, PriorSmart.  Check it out.

• Must-read:  A terrific article on Georges Doriot, “venture capital’s grandfather”.

• Here’s a good interview with Susan Preston, GP at CalCEF’s new Clean Energy Angel Fund.

Deals from the past week:

• Evolutionary Genomics, which is developing biofuel feedstocks with improved yields, has raised a round of financing (amount undisclosed) from Altira Group.

• Small-wind innovator Mariah Power has taken in an additional $500k in financing, from Greenhouse Capital Partners and Big Sky Partners.  It’s unclear if this was a Series A or just a continuation of their seed round from last year.

• Jonathan Shieber at VentureWire wrote today that AMR developer Silver Spring Networks has raised an additional $17.4mm in what appears to be an insider Series C extension (with members from existing investors Foundation Capital, Edison Electric Institute and JVB Properties participating).  The original Series C was previously reported to be $40mm, last year.

• LED developer Bridgelux raised a $30mm Series D and $10mm in lines of credit.  VentureTech Alliance led the round, and existing investors DCM, El Dorado Ventures, VantagePoint, Chrysalix Energy Venture Capital and Harris & Harris Group also participated.  This follows on the company’s $23mm Series C from last summer.

• Greenline Industries, which claims a biodiesel production process that doesn’t require the use of water, has raised a $20mm financing, led by Leaf Clean Energy.  Somewhere, Jim Matheson’s ears just perked up...

• Brighter Planet, an online clean energy services and info provider, raised a $3.2mm Series B.  Crow Hill Ventures led the round.

Cleantech regional updates:  Here’s a good article on all the various efforts around the U.S. to create new cleantech clusters…  And then I thought this recent comment by Tim Chapman (who writes the Clean Ventures blog focusing on UK cleantech investing) was worth elevating for everyone—his response, after I had previously mentioned an article lamenting the dearth of venture capital in his neck of the woods:

That Independent story on the UK VC scene is a little overblown - 3i’s been doing next to nowt in the early-stage space for years, so their recent announcement just confirmed what everyone knew. Established firms move up-market - it’s always happened, and will continue to do so. Anyway, 3i’s not symptomatic of the UK market - they’re adamant they’re a global player, so the move should say as much about the global market as the domestic.

The figures show an increase in seed and early-stage deals, at least up till 2006, for the UK and Europe. It’s not as active a market as in the US, but it’s still in relatively good shape. Interestingly, a fair few low-end investors I’ve spoken to say that the problem isn’t in VC supply, but in demand - there’s barely enough quality early-stage businesses to take the money that’s currently in the market. Maybe that says something about the appetite for risk, or quality of entrepreneurship, but I don’t think lack of VCs is the problem.

Thanks much, Tim.

Finally, it’s not really about the venture capital side of things, but I thought this interview with David Kurzman of Panel Intelligence was interesting.

Oorja, Range Fuels, Luminus Devices, RecycleBank and others

• Methanol fuel-cell developer Oorja announced today that they are emerging out of stealth mode, with some other operational announcements as well.  Cleantech.com mentioned that the company has raised a total of $21mm so far in venture financing from Sequoia Capital, DAG Ventures, McKenna Management and Spring Ventures.  We first mentioned the company back in 2006.

• Jonathan Shieber at VentureWire reported this week that cellulosic ethanol producer Range Fuels has raised $100mm.  Khosla Ventures put in $25mm, and another investor led the round with another $25mm, with the rest of the funders not noted.  This round size suggests that the post-money valuation these investors put on Range Fuels may have been about the same or more than JP Morgan’s price for Bear Stearns…

• Los Alamos Renewable Energy, which is using concentrated sunlight to produce hydrogen, has raised a $20mm round of financing, according to VentureBeat.  Funders besides local New Mexico VC Sun Mountain Capital were not mentioned (although they were speculated) in the article.

• Coskata, which we mentioned recently in conjunction with their strategic investment from GM, has apparently completed their latest round of financing with $19.5mm, according to PEWW.  Globespan, GM Capital Partners, Khosla Ventures, Great Point Ventures and Advanced Technology Ventures all participated in the round.

• LED developer Luminus Devices has raised a $72mm Series E.  Braemar led the round, which also included participation by CMEA, Paladin Capital Group, and previous investors.

• RecycleBank, which sets up systems where residential recyclers get discounts from companies like Coke and Whole Foods, raised a $30mm round of financing led by Kleiner Perkins, according to VentureWire.

• Cleantech investors in the news: Daniel Leff is joining Globespan as a venture partner, to focus on cleantech…  And Google may invest in enhanced geothermal.

Other news and notes:  Business Week says clean energy is getting affordable...  Meanwhile clean energy markets continue to grow like gangbusters, according to CleanEdge and other coverage like SolarBuzz...  Just thought this write-up of Stion was pretty in-depth, so thought I’d provide a link...  “Green Construction Red-Hot with VCs”...  Meanwhile, here in Massachusetts, some very interesting efforts to encourage the implementation of “zero net energy buildings”, as well as more effort on Beacon Hill to promote clean energy adoption...  Paul Dickerson of the EERE summarizes how they’re looking to work with VCs...  Finally, could the Bear Stearns situation impact cleantech venture markets?