Sunday, February 18, 2007

The rise of online green media

With the rise in general public interest in issues like climate change, alternative energy, green purchasing, etc., it's no surprise that investors are starting to look for ways to tap into this trend. In many ways, they are following the rise of green marketing, as large consumer products companies and others increasingly vie for the dollars of consumers who want to direct their purchasing toward more environmentally-friendly products and services -- where the ad dollars go, investors will follow.

For many investors, online media models are something with which they have some familiarity, so online green media and green purchasing tools have been getting some VC attention lately (as VentureWire covered last month). While some such investments haven't been publicized yet, VentureWire reported this past week that Joel Makower's Greener World Media has raised over $250k in seed financing from seven angels, including Andrew Shapiro of GreenOrder, Lisa Gansky of Ofoto, and others. There's a good profile of Joel's efforts here, from a while back.

Anecdotally, there's no shortage of entrepreneurs also looking at getting into the game right now, as this one example helps illustrate. Usually the efforts appear to be green applications of previously successful startup models ("the green craigslist," e.g.). Such evident low barriers to entry can be a challenge for investors looking into the space, but network externalities (ie: the more people who come to a website, the more valuable it becomes, and so it attracts even more visitors) can create compelling businesses if things work out... Especially as online ad revenues are on the rise, especially for sites that provide good targeted demographics...

Other deals to note from the past week:
  • P21, a German developer of fuel cell-based backup power systems, raised a Series C of undisclosed amount. Goldman Sachs led the round, alongside existing investors Target Partners and Conduit Ventures. The company's products are targeted at backup power for telecoms.
  • VentureWire reported this week that smart metering system developer SmartSynch raised a $10mm Series D insider round. Existing investors all participated; they include Battelle Ventures, J.P. Morgan Partners, Siemens Venture Capital, Kinetic Ventures, Nth Power, Endeavor Capital Management, OPG Ventures, Lime Rock Partners, Cinergy Ventures and GulfSouth Capital.
Other news and notes:
Other small items: A couple of interesting events coming up -- Energy Crossroads 2007 at Stanford, and the Cleantech Innovation Challenge in Colorado... Corn-based ethanol continues to come under market pressure -- but remember, venture investors are typically backing nextgen biofuels technologies (alternative processes, feedstocks, or biofuels)... Finally, SustainLane Government has announced the top five US cities for clean technology (yes, Boston made the list), as Joel discusses.


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