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Cleantech investor news

Rob Day: March 31, 2006, 9:16 AM
  • Garage Technology Ventures, which has invested in several cleantech startups including Hoku Scientific and Miasole, announced the formation of a new seed-stage fund. Backers include Thomas Weisel Global Growth Partners, DFJ, Silicon Valley Bank, and E-Trade. The new fund will co-invest alongside the firm's original fund. Good quote from managing director Bill Reichert: "The world doesn't need another $250 million fund chasing the same billion-dollar startups. Our mantra is, 'Small is Beautiful.'"
  • Idealab, which has backed solar concentrator startup Energy Innovations, has agreed to pay off the $50m personal loan of founder Bill Gross. Here's a long article with some details.

Catching up on the news

Rob Day: March 28, 2006, 11:28 AM
A lot of stories worth tracking from the last week or so...
  • Regarding solar technology, here's an interesting story about the amount of investing China is putting into building their domestic solar industry. Will that be an opportunity or a threat to solar companies elsewhere?
  • Should have mentioned the California Clean Tech Open before. Many readers of this site will already be aware of it, but you can read more about it here and here. Terrific idea. Also, Xerox PARC has put out some more information about their own cleantech efforts. Get those business plans going! ...It's also a great sign for us expansion-stage investors for down the road.
  • The team at the Cleantech Venture Network is teaming up with hedge fund investors Kurzman Investment Partners. It'll be interesting to see what this partnership looks like as it develops... Also, Kjartan has asked me to make sure and mention again what a great job the Cleantech Venture Network team did with last week's Forum, many kudos all around.
  • Here's an interesting article comparing the energy technology market today to the telecom market of a few years back. The author mentions the emergence of distributed generation and energy storage technologies -- I'd also throw in remote monitoring and automated control of energy assets as a key enabling technology. (Thanks to Michael Leyba for pointing us to this article)
  • We haven't mentioned geothermal energy much here, as for the most part (with some definite exceptions) there isn't as much entrepreneurial activity with these technologies as there might be for some others. But the industry is apparently expected to grow quickly, take note.
  • Green laptops? The really interesting thing here is the use of renewable energy certificates (in this case, from hydro) as part of marketing for the products... A sign of an emerging marketing trend?

Energy technology and energy prices

Rob Day: March 28, 2006, 11:13 AM
In recent conversations with investors and investees, one question that often comes up is "what is going to happen if and when energy prices drop again?"

It's not just an academic question. So many energy-related technologies derive their economic value out of high baseline energy prices that it could potentially affect market growths and thus the value of clean energy investments.

Now, first of all let's note that this isn't just a question of oil prices (in fact, in many ways natural gas prices are more important in regards to clean energy technologies such as energy efficiency or solar). And let's also note that the consensus is that over the long run the trend is going to be higher energy prices versus recent past periods where energy was a cheap input. But within that trend, there will likely be periods where energy prices fall significantly as well.

Will these periods hinder the adoption of clean energy technologies?

Some that I've spoken with suggest that volatility, instead of decreasing demand for clean energy technology, may actually spur faster adoption. The hypothesis is that consumers of energy will be drawn to making investments that either stabilize their energy prices (such as installing solar), or decrease the impact of price volatility by reducing the importance of energy as a critical input (such as adopting energy efficiency technologies).

That's where this study out of the Netherlands becomes very interesting -- the researchers suggest that this hypothesis doesn't hold true, that instead you need to see consistently high energy prices to really move technology adoption and investments. That the uncertainty of volatility may hinder adoption of new technologies rather than accelerate it.

It's an interesting point for more discussion...

WellDog, OrionSolar, Micro Power Electronics

Rob Day: March 24, 2006, 11:47 AM
  • WellDog, which has a number of technological solutions for natural gas extraction and carbon sequestration, announced a $6.5M Series D. The round included new investors Axiom Venture Partners, Kozel Energy and Yellowstone Energy Ventures, as well as existing investors EnerTech and Prospector Energy Capital.
  • Israeli solar startup OrionSolar, which is developing dye cell PV, took in $1M from 21Ventures. This builds upon approximately $800k in earlier funding from 21Ventures and Incentive, an Israeli incubator group. According to the article describing the transaction, OrionSolar is targeting solar cells with costs under $1 per peak watt.

Comverge raises $5.5M Series C; Neah Power gets reverse-merged

Rob Day: March 21, 2006, 5:31 AM
  • Comverge, which offers utility meter equipment and is also developing demand-response services (they'll turn down your air conditioner during peak usage times, in exchange for a rebate from your utility), announced a $5.5M Series C. The financing was provided by new investors Air Products and Chemicals and Partners for Growth, as well as existing investors Nth Power, EnerTech Capital Partners, Rockport Capital Partners, Norsk Hydro Ventures, Ridgewood Capital, Easton Hunt, and Data Systems & Software. The company has now taken in a total of $40.9M in venture financing.
  • In one of the more titillating moves recently, micro fuel cell developer Neah Power has gone public through a reverse merger with Growth Merger... which is a defunct adult entertainment company. The move essentially allows Neah Power to go public through the old Growth Merger shell, a not-uncommon move, and often such shells can have colorful pasts. PE Week Wire suggests that this provides liquidity for Neah's existing investors, but for many such reverse mergers it's not the case, it's instead a vehicle for the company to go to public markets for future fundraising needs (often via private placements); but the company often remains a microcap with low daily trading volume and thus it doesn't provide much extra exit potential for large private investors...

News you can use

Rob Day: March 20, 2006, 1:37 PM
In advance of this week's Cleantech Venture Forum in San Francisco, here are some news stories to talk about in the networking sessions, if you're able to attend...
  • Building on last week's discussion of the hydrogen economy comes this useful update on the current state of micro fuel cell commercialization -- a tech some have looked to for earlier market adoption than hydrogen-fueled PEMs, focusing on battery replacement instead of stationary or vehicular power. "But profitability in the segment appears to be elusive, as the technology remains in the R&D stage for now."
  • Tyler Hamilton reports on the white-hot solar market, by focusing on a Canadian company that will be at the Forum... "Solarbuzz LLC, a San Francisco-based research firm focused on the solar industry, reported last week that the generating capacity of solar PV installations around the world grew by a stunning 39 per cent in 2005, with more than $1 billion (U.S.) invested in new plants to manufacture solar cells. The industry also raised nearly $2 billion on the capital markets last year, and was one of the hottest areas of venture capital investment."
Unfortunately, due to scheduling conflicts I won't be able to attend the event myself, but attending readers should look for my Expansion Capital Partners colleague Kjartan Jansen, who will be there and has kindly offered to share his thoughts on this site during the week... Look for his posts over the next couple of days.