Imperium's $100mm raise, and a lot of other news

• Following up on an item from last month, it appears that Imperium Renewables (f/k/a Seattle Biodiesel) is set to announce a $100mm raise of equity and debt. Several hedge funds and a pension fund are new into the deal -- the city of Seattle's employee pension fund is participating (apparently putting in $10mm of the round), with Stark Investments, Ardsley Partners, and Sound Energy Partners also involved. It's unclear how much of the raise is equity, and to what extent existing investors (including Vulcan Ventures, Technology Partners, Nth Power and Ignition Partners). [Other past news on Imperium here, here and here]

• DayStar, a publicly-traded developer of thin film PV technology, has raised a $5mm PIPE from a group of six investors, with Millennium Partners the largest funder. The money is intended to help bridge the company (which lost $15mm during the first nine months of 2006) while it raises significantly more capital toward the building of a production line in Malta.
  

• Enerkem Technologies, which is developing syngas production technologies for both tar sands and waste feedstocks, has raised a C$8.6mm round of financing. New investors Rho Ventures and Braemar Energy Ventures led the round, which also included participation by existing investors Solidarity Fund QFL and Innovatech Sud du Quebec.

• UltraCell, a micro fuel cell developer, has raised a $10.3mm Series C, according to a press release by BASF Venture Capital, which is providing $3mm of the raise. Other investors in the round aren't disclosed in the release, but existing investors include Sevin Rosen, OnPoint, Star Ventures, BankInvest Group, and ES Tech Ventures.
  

• Kreido Laboratories, which is developing biodiesel plants based upon its proprietary technology for the flexible use of multiple feedstocks, has gone public in a reverse merger as part of a $25mm private placement. Wellington Asset Management led the investment group involved in the raise; the company plans to open their first plant in 2007, and two others are also in development. The company is also changing their name to Kreido Biofuels.
  

• Lehigh Technologies, a rubber recycler and powder developer, announced an $18mm equity round from new and existing investors, with NGP Energy Technology Partners leading the round.
  

• VantagePoint and Volvo Technology Transfer have invested an undisclosed amount of equity into Chemrec, a Swedish developer of technology for the production of syngas from pulp and paper waste.
  

• Other cleantech investment sector news: The Cowen Group has launched an Alternative Energy Group, to be headed by Skip Grow... Piper Jaffray closed their cleantech fund-of-funds at $60mm. They have already made commitments to DFJ Element, VantagePoint, Nth Power, Expansion Capital Partners, and others, and have a commitment "pending" with Technology Partners. According to Piper's Danny Zouber, the fund was oversubscribed even at the $60mm level -- yet another indication of strong LP interest in the sector right now... Here's a fascinating interview with David Aslin, who's a bit skeptical about all the VC activity in biofuels right now... And here's an interesting column by Pearl Chin of Seraphima Ventures, on investing in nanotechnology.

• This site doesn't delve much into the political angles of cleantech investing, but it's impossible to ignore that politics and cleantech VC have seen their boundaries increasingly blurred recently. Here's one article on VCs getting into policy and political discussions... and now here's another example of a politico getting into investing (of course, it's hardly a stretch to think about Steve Westly getting involved with technology investing, although it's interesting to see him co-habitating with Kleiner). This blurring of the lines illustrates that political and policy analysis skills are increasingly important for VCs and other investors looking to be active in the energy technology space.

Other news and notes: Here's a nice general "state of the sector" piece... An interesting critique of lithium ion as an energy storage technology by Tyler (time to start buying up Bolivian salt pan rights?)... A nice overview of the ongoing shift of political and business attitudes around climate change policy... More on the ongoing hydrogen highway debate... Finally, a small encouraging piece of news about sustainable energy research -- but mostly, I just enjoyed the mental image of a "nanocollege."

Altra, H2Oil, BPL Global, Imperium, and other news

• Jonathan Shieber of VentureWire reported yesterday that ethanol production startup Altra has increased the size of its Series B investment another $63mm, up to $183mm. The additional capital will be used to accelerate construction of the firm's three new plants, which we discussed at the time of the last mention back in August. Another quasi-venture/ quasi-project finance round (...and keep reading a few items below).
  

• Extremely happy to point out (self-promotion alert) that @Ventures has made a $3mm investment in H2Oil Recovery Services, as part of an overall $4.7mm Series B. The company uses a patented technology to reclaim valuable petroleum and clean water from the oil and natural gas exploration and production processes, cost effectively treating two of the industry's most common waste products - tank bottoms and produced water.

• Broadband over powerline developer BPL Global announced a $26mm Series C round, with $5mm of the investment from Morgan Stanley. It's unclear how this announcement relates to a similar announcement from the firm back in September, which was also described as a Series C round. We've discussed before why such "third pipe" efforts are relevant to smart grid and other cleantech-related sectors.

• More follow-up on the previously discussed financing round for Imperium Renewables... Turns out it was a bit more than the anticipated $100mm, with the announcement that the company has raised $113mm in Series B equity and is raising $101mm in debt. The company expects to have 400mm gpy in capacity by the end of next year. "Existing investors Technology Partners and Nth Power were joined by a number of new investors, including funds affiliated with: Ardsley Partners, Attractor Investment Management Inc., BlackRock Investment Management (UK) Ltd., Capricorn Management, LLC, Ecofin, Robeco C.V., Silver Point Capital, Southport Energy Alternatives, Stark Biodiesel Investments, Ltd., and Treaty Oak Capital Management."

More news and notes: The latest MoneyTree survey is out, and apparently "no one had paid attention to [cleantech] before recently," but now the "secret" is out, I guess -- shhhhh... Finally, an interesting story about lightbulbs.

Happy Memorial Day

GE has announced that they plan on doubling their cleantech venture capital investments from $25mm this year to $50mm in 2008. It's yet another sign of the importance of cleantech for such large capital goods providers, who are also likely to be major acquirers of clean technologies as the space continues to mature -- and thus providing exits for many cleantech venture investments. It's also interesting to note that GE had previously moved away from direct venture investments in the past, and this announcement is further indication that the company is getting more comfortable getting back into a corporate VC business model...

Deals from the past week:

• SunLink, a manufacturer of proprietary mounting systems for solar panels, announced a Series B financing of undisclosed amount. The round was led by Clean Pacific Ventures.
  

• Greentech Media, a new cleantech-focused media firm, announced a $1mm Series A round, led by Northport Private Equity and Lightspeed Venture Partners. Several strategic angel investors also participated in the raise. As we previously mentioned, Eric Wesoff's Venture Power newsletter has also joined forces with Greentech Media...
  

• E-waste processing company Intechra announced a $30mm equity round, led by Richland Ventures, Oxford Bioscience Partners, and First Avenue Partners. Intechra has raised $50mm over the past two years. Jonathan Shieber at VWire had a nice column last week discussing this deal and others in the recycling space...

• An interesting play by Khosla Ventures and Venrock -- Transonic Combustion, which is developing a fuel injection system with fuel efficiency benefits for internal combustion engines, announced a Series B of undisclosed amount, with both venture capital firms participating (Venrock led the round). Advanced internal combustion engine designs and components can be a very difficult play for venture capital firms to get comfortable with (slow adoption cycles, a plethora of alternative designs out there sitting in engineers' garages, and potentially difficult exits are all factors), but there's no disputing that it's a huge potential market for any firm that can successfully address the challenges facing such efforts.

• Petra Solar, which is developing advanced BOS to improve solar PV efficiencies and provide greater flexibility, announced a $14mm Series A led by DFJ Element and BlueRun Ventures.
  

Cleantech investors in the news: OnPoint, which has been pretty active in cleantech, is losing some of its funding... Southern Cross, a new Australian venture capital firm, announced they have raised A$170mm first-time fund, and that clean energy investments in Australia and New Zealand will be part of the fund's focus... Nancy Floyd, of Nth Power, wants better clean energy policies in Oregon.

Other news and notes: Biodiesel producer Imperium Renewables, which has raised over $200mm in funding, filed for a $345mm IPO... In the ongoing discussion of cleantech clusters, the Economist adds this column worth checking out... A good overview of Cleantech 2007... The Cleantech Venture Network and Weber Shandwick are teaming up to promote the Cleantech Venture Fora... Finally, sounds like they're doing some neat things up at Dartmouth these days.

Q1 2007 numbers

Over the past week or so, many of the various groups who track venture capital investments put out their Q1 numbers. Below is a brief re-cap, for those interested. (For those interested in a discussion of the differences in the various approaches, see this previous posting)

• As previously noted, the Cleantech Venture Network announced this week that Q1 totals for cleantech investing were $903mm across both North America and Europe, representing a 16.5% increase versus Q4 numbers and a whopping 42% increase on Q1 2006. In both regions, energy generation technologies were the largest category, with a little more than half of all capital going into that segment of the market.
  

• Eric Wesoff's Venture Power newsletter reported $760mm of clean energy venture capital in Q1. Eric's always-insightful commentary notes that: "Q1 looked a bit like last year -- with a mix of investment sectors and a disproportionately high biofuel figure skewed by a few very large deals... [three of the deals] account for nearly half of the total. It is arguable that these deals don't qualify as VC investments despite the fact that they have VC investors -- they look more like project finance." Eric also notes that Venture Power has "joined forces" with Greentech Media, so "look for big changes in the coming weeks."

• As provided by Dan Primack at PE Hub, the Moneytree (PWC/ NVCA/ Thomson Financial) survey for Q1 was also released. In the Industrial/Energy category they counted slightly more than $500mm of venture capital financings, a 20% increase on Q4, and a 75% increase on Q1 2006. This would make the category the fifth biggest category tracked, behind biotech, software, medical devices, and telecom. Across 44 tracked deals, the average deal size was higher than $11mm, which is an interesting contrast with the category's $6.2mm average deal size for 2005. 44 deals, however, is less than Q4's 50, and not that much higher than Q1 2006's 39. One useful feature of the Moneytree data is that they also track "first-sequence" financings (the first institutional investor money into a company). Among these first-time financings, Industrial/Energy was actually the third biggest category, at $176mm -- 13% higher than Q4 totals, but 145% higher than Q1 2006 totals. Intriguingly, the average deal size for these 19 earlier rounds was also quite high, at $9.3mm, versus 2005's average of $5.6mm. This suggests that while capacity deals may be inflating the sectoral totals as Eric descrbes, there may also be some significant additional rise in valuations...

• E&Y and VentureOne also put out their quarterly survey results. Unfortunately for them, most cleantech still appears to be categorized as "Other" in their survey (really? still?). So we'll just leave it at noting that Q1 "Other" total investments were the highest for any quarter they've tracked since beginning in 2001. How much of that is cleantech is impossible to say... This press release seems to suggest that about 64% of the category total was in 10 "alternative energy" and 8 "environmental technology" deals. [4/26 update: Note additional info on this survey appended below]
  

• We previously noted NEF's numbers here. They counted $2.2B total private equity financings into clean energy worldwide in Q1. That's 58% above Q1 2006 totals and 60% higher than Q4 2006. Helpfully, they note that the big totals were driven in large part by three major transactions: Silicium de Provence ($394mm) and Solyndra ($79mm) in solar, and Imperium Renewables ($113mm) in biofuels. Differentiating between VC and private equity, "early stage venture capital" was tracked at $303mm (23% higher than Q1 2006), with Series A and seed tracked at $80mm -- "almost double" Q1 2006, but around half of Q4 2006's $159mm. Interestingly, PIPEs grew sharply, at $446mm, about triple from a year ago. Also a little bit of a dampening in the IPO market, with $899mm raised in initial offerings.

[4/26 update: Received a very fast reply from Michelle Jeffers at Dow Jones VentureOne who reminded me that they do indeed break out cleantech venture capital in a separate set of reported numbers. In fact they are attempting to address the overlapping nature of clean technologies and other technologies via their methodology, something we've written about before on this site. So I wanted to post Michelle's email, since I hadn't done justice to the Dow Jones approach in the original column:

Hi Rob

Saw your post regarding our quarterly data.

I thought your parenthetical comments indicated that perhaps you thought we were not taking Cleantech investing seriously.

In fact we are extremely serious about our methodology and the recognition of the importance of cleantech investing and release an entirely separate report on cleantech investing with Ernst & Young on a regular basis, in addition to this quarterly data.

This quarterly report breaks down the rounds (and companies) into very specific single industries – in fact into approximately 140 different industry sub-segments, and from there even into even more subcodes. The companies we identified and made mention of in the press release in the cleantech field were in our Energy or Environmental segments, which, because they do not meet the exact criteria we set for IT, Business, Consumer and Retail products and services, or Healthcare, are considered an OTHER category. Of course, there are always judgments that must be made for the appropriate sorting when dealing with the volume of financings that we track.

That is why I want you to know that when we release our Cleantech data, we look at all companies throughout every industry from IT to Healthcare to Products and Services for aspects of cleantech in their business. I think you’ll find if you look at all our data releases that we take a very thoughtful and careful look at each venture-backed business—and we research them with direct primary contact with the companies themselves, to verify their financings and their business descriptions—before determining how they should be categorized, in our effort to provide the most accurate tracking of the venture capital industry.

... Thanks to Michelle for a very helpful and thoughtful reply. To see an example of the reporting she is referring to, see this write-up of their 2006 totals. rd]

Cleantech investors and carbon and RECs (pt 3)

It's been more than a week since the second installment on this topic (and you can find the first installment here), but if anything, it's an even more relevant topic after a week's worth of news developments. After all, as Kevin, a "serial entrepreneur", says in this WaPo column, "The venture capital community's appetite for green-tech deals has skyrocketed since the Supreme Court ruling."

Given the emerging momentum behind carbon and REC markets, and if it's true that carbon credit markets are particularly well-poised for significant growth in the US, what are investors doing about it?

Some are, naturally, investing directly into carbon sequestration-related technologies and startups like Kevin's. And not just into the sequestration technologies, but some investors are also investing directly into some of the financial service companies (see Sterling Planet's March funding announcement) that are looking to take advantage of the development of trading markets for RECs and credits.

Other cleantech investors are figuring out how their portfolio companies can position themselves to capitalize on these markets when they become more developed. In some cases, the venture firms are looking to partner with the financial traders who will eventually be active in these commodity markets, once they reach a viable point. One good example from last year is EnerTech's strategic partnership with Cantor Fitzgerald (note: link opens pdf).

Finally, cleantech investors are drawing their own judgments about how the shifting landscape in carbon credit and REC markets will impact the sectors they are interested in. At a high level, the emergence of a strong REC market favors electricity generation technologies, since that is the primary focus of renewable portfolio standards. On the other hand, the emergence of carbon emissions reductions credits may favor energy efficiency technologies, since the reductions are easier to quantify, monitor and verify than any reductions associated with "green" generation projects that may or may not be cannibalizing "brown" generation capacity.

The short answer is that both markets are developing, as we've discussed. But in the long run each investor's view of the strength of the eventual market for each type of financial product may color their perspectives on the technology sectors that will be looking to those markets as an additional source of value.

Either way, the inevitable emergence of carbon credit and REC markets is a major factor that all cleantech investors are focusing heavily on these days.

Deals announced this week:

• Semprius, a North Carolina-based semiconductor manufacturing process startup, raised $4.1mm in venture financing from Intersouth Partners and Arch Venture Partners. The company's printing approach to semico manufacturing has potential applications in other similar types of devices, such as solar cells.

• Superprotonic, a developer of solid acid fuel cells, closed the first tranche of a $16.2mm Series B round. The round was led by US Venture Partners, and included Dow Venture Capital and existing investors CMEA Ventures, Nth Power, Hydro Technology Ventures, Battelle Ventures, Innovation Valley Partners and OnPoint.
  

• VentureWire also reported that solar test and measurement equipment vendor Solmetric raised a $250k angel round. Such equipment may be increasingly in demand with the implementation of performance-based (versus capacity-based) governmental incentives for solar.
  

Cleantech investors in the news:

• The Cleantech Venture Network announced this week that Q1 totals for cleantech investing were $903mm across both North America and Europe, representing a 16.5% increase versus Q4 numbers and a whopping 42% increase on Q1 2006. In both regions, energy generation technologies were the largest category, with a little more than half of all capital going into that segment of the market. Other coverage this week suggested that European cleantech investments are falling behind U.S. activity. We'll dive more into the numbers next week...
  

• The Keiretsu Forum, a well-known angel investor group, announced the formation of a Cleantech Investment Committee. Early stage angel investors can be a critical resource for new cleantech startups.

• Kleiner's Randy Komisar is predicting billion dollar cleantech IPOs soon. One of the first may be Imperium Renewables, which Venture Wire today reported is gearing up for a ~$1B public offering.

• A couple of smart cleantech investors with some cautionary words about the challenges to investing in the sector and the dangers of the "fad of the month" (er, carbon?), in this article.
  

Other news and notes: For those following the "smart grid" market and its implications for cleantech, the news of IBM's new coalition effort around the technology was another strong validation point... And GM may be taking the old "think locally, act globally" saying to a new level.

NEF's Q1 global cleantech private equity numbers

Interesting numbers released today from NEF, who track dealflow alongside other efforts we've discussed here before (Cleantech Venture Network, Nth Power, etc.):

• $2.2B total private equity financings into clean energy worldwide in Q1. That's 58% above Q1 2006 totals and 60% higher than Q4 2006.
• Helpfully, they note that the big totals were driven in large part by three major transactions: Silicium de Provence ($394mm) and Solyndra ($79mm) in solar, and Imperium Renewables ($113mm) in biofuels.
• Differentiating between VC and private equity, "early stage venture capital" was tracked at $303mm (23% higher than Q1 2006), with Series A and seed tracked at $80mm -- "almost double" Q1 2006, but around half of Q4 2006's $159mm.
  
• Interestingly, PIPEs grew sharply, at $446mm, about triple from a year ago.
  
• Also a little bit of a dampening in the IPO market, with $899mm raised in initial offerings.

Lots more info found here (note: opens a pdf).