Thursday, July 27, 2006

SolFocus and Green Earth Fuels

  • SolFocus, a solar PV concentrator developer that was incubated at Xerox PARC (we've discussed them before), announced they have taken in $25mm of an anticipated $32mm Series A. This comes very soon after the company's seed round back in February, which is a sign of how hot and heavy VC interest is in solar right now. Funders in this Series A include NEA, NGEN, and Yellowstone Partners. SolFocus has also recently posted listings to hire a Product Champion for their Gen One concentrator product.
Other news: Demand for electricity just hit an all-time record in the U.S... The California Clean Energy Fund has released some information about their portfolio... Biomass pellet-fueled home heaters... Finally, this year's hot toy for all you cleantech geeks out there...

Monday, July 24, 2006

Cleantech investments: Rising quickly... too quickly?

According to news released today by VentureOne, cleantech investing activity more than tripled over the last year. Part of an overall increase in VC dealflow overall, and yet one of the fastest growing sectors. As described in today's VentureWire (note: referring to 1H06 numbers, whereas the linked item above is about 2Q06):
Alternative energy and clean technology has been a small but growing market for venture investing. Venture capitalists put $315 million into 23 deals during the first half of this year, more than tripling the $90 million invested in 10 deals in the first half of 2005, according to VentureOne.
A few things to note regarding all of these continuing indications that the cleantech space is a hot one for VCs, and other items:
  • As always, it's worth comparing and contrasting various data sources on cleantech dealflow. In today's announcement, $315mm would be approximately 2.4% of the overall $12.97B VC investment pool tracked by VentureOne in 1H06. The 23 deals tracked by that group would also be approx. 2% of the 1,213 deals done in VC overall. Compare this to the latest Q1 figures reported by the Cleantech Venture Network (note: my firm is connected with CTVN), which pegged cleantech venture investments at $513mm in that quarter alone, and thus measures cleantech dealflow at 3-4x the VentureOne numbers. Also compare to Nth Power/ CleanEdge's numbers for 2005 for energy tech investments alone at nearly $1B. Clearly some significant definitional differences here, which is understandable given how amorphous the definition of "cleantech" continues to be, and how much increasing overlap there is between energy and water and materials tech and more traditional IT sectors, something discussed regularly on this site. In short, when a technology could be best classified as "cleantech/ IT" (sensor networks with significant applications in energy efficiency, for example), CTVN and Nth/CleanEdge will probably count it in their cleantech/ energytech data, while VentureOne needs to bucket it into one category or the other to avoid double-counting. So it's very understandable that VentureOne's numbers would be significantly lower than the other two groups', and readers will judge for themselves whether they want to be conservative or inclusive in reviewing the current position of cleantech investing in the broader VC community's activities.
  • Regardless of how narrowly or broadly these data sources define cleantech, it's clear that investments in the space are ramping up quickly. The CTVN figures for Q1 2006 were 53% higher than Q1 2005 figures; the Nth/CleanEdge 2005 totals for energy tech were 28% higher than their 2004 figures; and the VentureOne data released today describes the investments in this space as "more than tripling" since last year. Underlying the understandable definitional differences between the methodologies used by these three groups, there's a very clear trend at work.
  • All of this rising interest is now prompting the usual journalists' "is it the dot-com redux" or "is it a bubble" questions that seem to have been targeted at any hot space since 2001. It's a legitimate question at all times, and certain sectors of cleantech are certainly seeing some eyebrow-raising valuations right now, but most investors I talk to are convinced that the underlying market dynamics remain very favorable for this space to continue to grow quickly, and we continue to see good deals at good valuations in the lion's share of the market. However, for the "it's a bubble" argument du jour, Daniel Gross's recent article is worth a read. (I would quibble with his statement about much of this being a "new technology", however -- which technology would that be, exactly? The heightened investor interest is somewhat new, and the market traction seen now is somewhat new, but most of these techs have been around for years, if not decades) Tyler also has his take on the story.
  • On the topic of definitional issues... The flipside of investing in alternatives to increasingly scarce resources is to invest in those incumbent resources as well, since scarcity should lead to increased prices there as well. Especially when that incumbent resource is energy from fossil fuels, with such a central role in the global economy. This means that there is a natural overlap between "cleantech investors" and "energy investors" (particularly when it comes to innovations that improve the efficient use of fossil fuel-based energy), but they don't overlap completely. Each investor has to make their own determination as to where they draw the line, and why. Here's a good discussion of this, coming out of the recent Energy Tech Investor Conference (self-promotion alert: Expansion Capital's Mark Donohue is highlighted in the piece). Perhaps the most interesting thing about the article is the way it's described as "VCs are willing to look beyond clean energy to traditional energy resources." For many years, it's really been the other way around -- just another sign of the booming times in cleantech.
Other news to note: Matt Marshall notes that global warming is starting to hit close to home... The latest company profiled in Cleantech Spotlight has a great name... Some recommended climate change reading... Since we've talked about the Series C here on this site, it's worth mentioning that the Tesla Roadster looks pretty cool...

Tuesday, July 18, 2006

One out of five VCs plan to target cleantech; CaliSolar and Glacier Bay get funding

The growing interest in cleantech, greentech, energytech, environmental technologies, whatever you call it, is grabbing hold for more VCs.

As the latest NVCA survey of VCs shows, 12% of VCs now say they're "currently focusing on investments in energy/environment, with that figure jumping to 21 percent over the next five years." For the second year in a row, it's the fastest growing sector in terms of projected activity. So according to those surveyed, five years from now one out of every five VCs plans to be focusing on cleantech.

Of course, a few leading lights are already deeply involved in the sector, as regular readers here will be aware. Matt Marshall has this nice profile of Vinod Khosla and Marty Lagod, two dedicated cleantech investors in the bay area. Khosla Ventures also recently announced the addition of Samir Kaul as General Partner and Doug Cameron as Chief Science Officer, as they continue to build out their team. And of course, as Friday's mention of NStructures shows, Khosla Ventures has been pretty active lately. Matt Marshall gives a nice write-up on this as well.

Two more cleantech deals to mention today:
  • CaliSolar, another stealth solar deal, raised $9M in first round funding from ATV and Globespan Capital Partners, according to PEWW. (And again, Matt Marshall beats me to the punch in mentioning that Globespan's Ullas Naik is on the board -- nice hustle lately, Matt)
Other notes: Get your alternative energy cost targets here... Another editorial on the ongoing biofuels debate we've mentioned before, and a good overview of the cellulosic ethanol efforts underway, and the challenges faced... News that DuPont is going to be targeting biofuels... and BP and GE are getting into hydrogen together... Finally, lest we forget amidst the hype around PV, solar thermal is strongly in play as well...

Friday, July 14, 2006

NStructures, Li*on Cells, Memphis Biofuels, and Metabolix

A couple of unannounced deals brought to light by PE Week Wire (and VentureReporter*) this week:
  • NStructures, which is developing some kind of photovoltaic technology that is not discussed anywhere I've found, has raised $3.15mm of a $6.3mm Series A round, with this initial amount provided by Khosla Ventures and Braemar Energy Ventures, according to PEWW.
  • Li*on, which is developing advanced lithium ion batteries (aimed at least partially at the electric vehicle market, according to this article), has raised $3.6mm in a Series A from Battery Ventures and Nth Power (again, according to PEWW).
  • Another biodiesel manufacturer has gotten started up: Memphis Biofuels has gotten funding from Cohen & Co. to get started up with a 36mm gpy facility. The main advantage the company appears to be looking to capture is geographical location.
  • Finally, it's not a private funding event, but it's worth noting cleantech investors' exits as well: Metabolix, which develops bio-based plastics and polymers and has partnered with ADM, has filed for an $86.25mm IPO. The Vertical Group and Westfield Capital are backers of the company, which was launched in 1994.
[*7/17 update, rd]

Wednesday, July 12, 2006

The Carbon Trust and Pemeas; news and follow-ups

  • German fuel cell component maker PEMEAS announced a 6mm euro raise from existing investors. This brings the total invested to date in the company up to 26mm euro. Existing investors include BankInvest, Conduit Ventures, S.A.M., CDP Capital, InfraServ Hochst, and Celanese AG.
  • On the subject of ethanol, the buzz continues. There seems to be an interesting schism in the public discourse, however. On the one hand, the debate continues about whether corn-based ethanol is a net positive or negative. And yet others have decided that debate is moot and have moved onto discussions about the feasibility of cellulosic ethanol. Certainly this latter perspective has captured the attention of a lot of venture investors. Jim at The Energy Blog has a good post discussing the DOE's cellulosic ethanol roadmap.
[7/16 update: For a fun read, check out the series of ethanol-related interviews at GoG2G -- The anti-ethanol researchers have their say, and then get taken on by Vinod...]

Other notes: CNet's has a good article covering a lot of ground, related to investing and climate change, check it out... GreenShift shift: Cleantech investor transitioning to operating company... Here's a good update on the state of lithium ion battery technology... Last but definitely not least, how to rock out in a carbon neutral way!

Thursday, July 06, 2006

EcoSMART Series B, Enpirion Series C

  • EcoSMART, which is developing pesticides based upon natural plant oils, announced a $9mm Series B round, led by RockPort and DFJ Element. Existing investors (from a $6mm 2004 Series A) included Cordova Ventures, Early Stage Partners and Delta Capital (it's unclear from the PR if the existing investors participated in the current round, although it's interesting to note that Michael DeRosa probably brought the deal to Element from Cordova, where he was previously). VentureWire had a nice little profile of the company on Monday, for those with a subscription... The company reports they have a significant patent portfolio after 14 years of operations to date. The funds will be spent on further development and commercialization.
  • Enpirion announced a $20mm Series C led by led by BA Venture Partners, a previous investor. Other investors include Canaan Partners, Columbia Capital, Intel Capital, RRE Ventures, SAS Investors and Xilinx. Why is a fabless semiconductor, DC to DC power conversion company "cleantech"? They're posted here for inclusiveness, since their systems claim to be able to double battery life for mobile devices. Readers will decide for themselves how that might fit into their own categorizations of energy efficiency and energy storage technology...
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