Camille Ricketts of Venture Beat moderated a panel on VC investment in smart grid at the Greenbeat event this morning.
Here are a few notable observations and quotes from the investors on the panel.
Peter Wagner of Accel Partners:
Don Wood of DFJ on greentech exit action in China:
Introduced by Venture Beat's Matt Marshall as "The best known investor in Web 1.0, involved in the founding of Amazon, Netscape, and Google," John Doerr and his firm, Kleiner Perkins, have raised a billion dollars to be channeled into greentech.
"Greentech could be the largest economic opportunity of the 21st century," said Doerr.
Speaking at Venture Beat's inaugural Smart Grid event in San Mateo Calif., he offered his usual thoughts on greentech governent spending, the daughter Mary story ("Your generation created this problem you better fix it.") but he did add some interesting quotes:
Kleiner Perkins' cleantech investments include Bloom Energy (Fuel Cells), MiaSolé (CIGS PV), Solexel (3D Silicon Cell PV), Alta Devices (Stealth PV), Ausra (Solar Thermal), Altarock (Geothermal), Fisker Automotive (EVs) and several others. Their smart grid investments include Silver Spring Networks and Hara Software.
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Here's an interesting thing about VC investment in smart grid: Investors talk about it a lot but the numbers are low. It's a bit surprising to see the small proportion of smart grid deals relative to VC in greentech as a whole:
So are VCs talking and not diving in? Are they looking to see the outcome of Silver Spring Networks' utility roll-out? Are we only in early days?
Or will these initial forays into Advanced Meter Infrastructure and Home Energy Networks give way to a bigger and steadier wave of other smart grid technologies like Vehicle to Grid, EV charging stations, data management and analytics, network optimization tools, and independent energy storage operators?
The next few quarters will tell. Smart people in Greentech Media's smart grid practice see a new smart grid innovation and investment wave about to break.
Always On previewed its December Venture Summit with a breakfast at the offices of Wilson Sonsini Goodrich & Rosati (WSGR) this morning where it examined trends in finance and the VC outlook for 2010.
Tony Perkins runs Always On, christened Silicon Valley the "Athens of the Information Age." He asked the panel "if the economic recovery is real?"
Doug Merritt of SAP is in charge of sales to SAP's largest clients (SAP will have revenues of $14 billion this year) and gave a 30,000-foot view. "People were so panicked at the end of 2008, they didn't even know how to act," he said. But now "the largest organizations I deal with are actively investing." On the Greentech front, he detailed how Cisco's travel budget has dropped from $750 million to about $250 million, not because the company has reduced travel so much but because it has massivly increased meetings via telepresence.
Mark Reinstra of WSGR spoke of the IPO climate: "There have been ten VC-backed IPOs in 2009, but from an informal survey within the firm, we've seen many more companies preparing for IPOs just within WSGR." The litmus test remains that a company needs $30M to $60M annual revenues to IPO."
Ted Smith of Union Square Advisors said: "There's a lot of stuff coming in the top of the funnel but as far as actual M&A exits – it's a very high bar."
Jim Anderson of Silicon Valley Bank (SVB) works in the analytics group, and specailizes in valuations. "There is no question that valuations have dropped precipitously," he said, adding that there is a disconnect between the state of the economy and the multiples and valuations in the stock market. He likened the state of the economy to a near-comatose patient on pain killers. Unemployment goes to 10.2 per cent and the Dow jumps. "The U.S. economy is driven by consumer savings but consumers are hunkered down," he said. Anderson certainly sees significant growth from 2009 to 2010.
"But the little corner of the world that we operate in – the world of VC – innovators will continue to innovate. Adverse environment can actuallly produce the best start-ups," he said.
Sandy Miller, a veteran VC at Institutional Venture Partners (IVP) is "much more optimistic" than Anderson of SVB. He believes that "the financial markets almost invariably precede the recovery by two to three quarters. The financial markets have already recovered. There's an appetite for IPOs from institutional buyers, adding "The actual paramenters to go public have been virtually the same for the last thirty years." He also noted that "2010 will be a reasonably active year in the IPO market," and that "when the IPO market rises the M&A market responds as well."
"Greentech company valuations are twice what we would expect for other sectors," he said. (Which is why he's staying away from those investments.)
"It's a great time to be an investor," Miller concluded.
SAN FRANCISCO -- Smart Grid is the energy theme of the moment – hundreds of millions of government funding, billion dollar smart meter deployments, and hundreds of millions in venture capital have drawn the attention of entrepreneurs, utilities, and corporate behemoths like Cisco, Intel, Oracle, ABB and Silver Spring.
And almost 500 of these smart grid cognoscenti converged at the PG&E Auditorium in San Francisco to assess the state of this nascent many-faceted industry at Greentech Media's The Networked Grid event.
Rick Thompson, GTM's fearless smart grid leader, kicked off the event with a review of some recent industry polling. Here a few tidbits:
David J. Leeds, GTM's smart grid analyst, introduced the Real World Deployments and Policies: 2010 to 2020 panel. What follows are some of the more interesting quotes from the speakers.
Thomas Bialek, Chief Engineer, Smart Grid SDG&E:
Erfan Ibrahim, EPRI:
Andrew Campbell, Senior Energy Advisor, CPUC:
Kevin Dasso, Senior Director, Smart Grid Strategy at PG&E:
The GTM Research blog provides brief and frequent market analysis provided by the GTM Research team of analysts. It covers everything from analyst perspectives on greentech market events, insights into existing and future research, posts based on select analyst briefings and vendor meetings, and insights from conferences and other industry events.