Viewing posts tagged "Vc"

Wilson, Sonsini Launches Guide to Stimulus Funding

Wilson, Sonsini, Goodrich & Rosati has launched a web portal primarily for investors and startups that tracks grants, loan guarantees and other financing mechanisms available at the state and local level.

As an added bonus, it also includes all of the grant awards. Thus, VCs and others can track who is applying for what and what sort of ideas they are proposing. The Small Business Innovation Research Program, for instance, has a $36 million fund for Phase I grants that top out at around $100,000. Phase II and II grants will follow. Applications are due by Nov. 20. Foro Energy, meanwhile, just got a $9.1 million grant to study geothermal drilling in ultra hard rock formations.

Is the information available elsewhere? Sure, but this cuts down search times. Did you want to apply for California state grants for natural gas innovations? Too late: It closed Oct. 27.

The site, which is based on Wilson's research and was set up with help from the Cleantech Group, breaks up the proposals into categories: green building, geothermal, etc. Check it out at Wilson's website.

Pegasus Capital Aiming to Put Millions Into Green Building

If you have a green building startup, here's a name you will want to remember: Pegasus Capital Advisors.

The private equity firm, which manages about $2 billion and has been around for over a decade, wants to put more money into energy and in particular into energy efficiency, i.e. light emitting diodes, green building materials, building control technologies. Like most private equity firms, a significant portion of the money will likely go into established, but listing, companies but it will also invest in new ventures through a subsidiary called Pegasus Sustainable Century.

The fund was founded by Craig Cogut, who came out of Drexel Burnham (bit of '80s trivia for you). The list of advisers is somewhat interesting. It includes Terry Tamminen, who headed up the California Environmental Protection Agency; Dan Kammen, one of UC Berkeley's star energy professors; George Shultz, the former Secretary of State; Marc Porat, founder of Serious Materials and Calstar Products; and Patrick Atkins, an expert on efficiently producing metals. And there's also Arik Arad, who ran security for El Al at Ben Gurion Airport Israel. Security is another area of focus for the firm.

Some of the investments include Fiberon, a composite decking material, and Molycorp Materials, which mines rare earth metals at the Mountain Pass Mine in California. Some of these get used in hybrid batteries.

Venture Capital Lights Up Solar in Q3

We reported earlier this week on the resurgence of venture capital investment in greentech. We broke it out sector-by-sector in this post. The graph above breaks it down year-by-year and looks at the recovery quarter by quarter

The chart below is another example of some of the work done in the Greentech Innovations Report – where we carefully track every VC deal in greentech as well as report on a different renewable energy topic every issue.

Investors channeled $575 million into 29 solar VC deals in the third quarter.  The investments spanned the solar sector and ranged from the fanciful (solar in space from SolarEn) to the sublime.  Notable in this data is the number of small investments - early stage VC investing is not dead.  Also notable are the 11 European and Asian investments, a larger than typical proportion.  European VC is alive and well.  The largest deal, Solyndra's $198 million, was a requisite piece of funding for Solyndra in order to garner their $535 million federal loan guarantee. 

Does the VC model still work in big solar? Can massively-funded VC startups like Nanosolar ($500M in VC) and Solyndra ($800M+ in VC) provide a reasonable multiple for their investors?  Or are the less capital intensive solar plays like SunRun or Enphase more suitable to the VC investor?  The next few quarters should give us some answers.

How to Encourage Recycling? Try SMS

Dear Rick:

Hope you're fine and watching the game from home. Remember, tomorrow is recycling and trash pick-up day. You've really been piling on the empties lately – is there a problem you want to talk about?

Sincerely,

Your Municipal Trash Collector.

Notes like that (minus that last sentence) could become more commonplace in America if City Bin International is right. The company, the U.S. subsidiary of Ireland's City Bin, specializes in back-end computer systems for garbage haulers and recyclers with a particular emphasis on customer service.

"People think what they are getting is a good as what you can get," said City Bin CEO Gene Browne, adding that residents served by City Bin report a 99 percent satisfaction rate.

The customer satisfaction directly turns into higher recycling rates, which in turn cuts down the need for landfill. The software also trims the number of employees trash companies have to employ. A typical trash outfit has one customer service representative per household. City Bin customers have one for every 9,000 households.

How does it work? City Bin puts sensors on the garbage truck that weigh the trash 30 times on the upswing and 30 times coming down. It then sends a message to consumers "in five seconds," detailing how much of their trash is recycling, how much is compost, and how much is raw trash. It then gives you data on how you compare to your neighbors and your own past. Peer pressure and a little encouragement then increase recycling.

It also sends you a message to remind you about trash pickup with contemporary hooks. "If there is a game on, we might mention that," he said. City Bin also engineers refunds for dissatisfied customers. It's their equivalent of a money back guarantee. "You don't want your waste back," he said.

City Bin also takes over the back-end administration for trash collectors. The suite of systems adds anywhere from $1.50 to $3 per month per household.

In some ways the company is a hybrid of Positive Energy (which sends peer pressure notes in utility bills telling consumers if they are good or profligate consumers), Recycle Bank (which gives people reward points for recycling) and SAP (which takes over customer service center operations for corporations most of us don't think about that much).

In Europe, trash companies compete for customers like cell phone companies here. In the U.S., trash mostly gets hauled away by municipal monopolies. But U.S. cities can benefit from increased recycling. Houston has a 4 percent recycling rate. Let me repeat that – a 4 percent recycling rate. The national average is close to 30 percent and San Francisco clocks in at more than 70 percent. 

Browne is in the states to get City Bin International off the ground and is part of a delegation to promote Ireland in Silicon Valley. For years, Ireland's tech industry largely consisted of serving as a European outpost for multinationals like Google and Intel. But steadily it has become a font for startups. Most are in software but a growing number specialize in greentech, particularly biomass and wave power companies. Various universities have also set up incubation centers. With VCs looking more internationally, we could start to see more deals emerge from the country.

VC in Greentech Back With a Vengeance

They're back.

After a weak first quarter that had everyone grinding their teeth and a modestly improved second quarter, venture capital investment in green technologies roared back with $1.9 billion invested in 112 deals in the third quarter of 2009. That's up from $836 million in 59 deals in the first quarter of 2009 and $1.2 billion in 85 deals in the solid second quarter.

Solar power was once again the leading investment segment at more than $575 million in 29 deals followed closely by biofuels, biomass, and gasification deals at $512 million in 17 deals. As forecast by GTM Research – investment in Smart Grid, Energy Storage and Automotive is gaining momentum.

Q3 VC Investment in Greentech

Driven by the optimism of a recovering economy, plentiful government funding for renewable energy and a recent successful Greentech IPO in battery maker A123 – venture firms have returned to investing in all stages across all greentech sectors. 


Notable and sizeable deals included:

• Solyndra’s $198 million VC investment from Argonaut Private Equity, et al. for its Fremont, Calif.-based thin-film solar firm
• Synthetic Genomic’s $300 million multi-year commitment from Exxon for the development of algae-based biofuels
• eMeter’s $32 million investment from Sequoia Capital and Foundation Capital for smart grid management software
• Tesla Motor’s $82.5 million round from Fjord Capital and Daimler Motors for Tesla’s groundbreaking electric vehicle
• Serious Materials’ $60 million round from Mesirow Capital et al. for green building materials

Some of the most active VC investors in greentech this quarter included NEA, CMEA, Khosla Ventures, Kleiner Perkins and Foundation Capital.  


In addition to the sheer magnitude of investment (this quarter’s $1.9 billion is close to reaching the investment levels of pre-recession 2008) there is a marked trend of a return to early stage deals with more than 35 Series A and seed rounds this quarter.


 Also remarkable was the increasingly global nature of greentech investment this quarter. More than 35 deals came from outside the United States with plentiful deals from the U.K. and France.

Steve Vassallo, Venture Partner at Foundation Capital, sums it up: "It's nice to see that we've hit an inflection point across all segments of cleantech.  With the economic recovery well on its way, combined with imminent carbon legislation and the acceleration of energy efficiency and renewable portfolio standards, I expect we're going to see a surge of cleantech IPOs.  Several of our cleantech portfolio companies – from SunRun to SilverSpring – are about to close their biggest quarters on record.  No doubt, there's good reason to be optimistic."

Details on every deal in the third quarter can be found in the Greentech Innovations Report.

Snapshot of 2009 Greentech VC, M&A and IPOs

VC investment in Greentech is thriving. After a soft first quarter brought on by recession and low investor confidence, VC in Greentech has been creeping up steadily. 

Greentech VC in 2009

Q1 2009                        $836  million in 59 deals
Q2 2009                        $1.234 billion in 85 deals
Q3 2009 (to date)          $923 million in 83 deals (to date)

Q2 was 50 percent more than in the first quarter, and the third quarter should exceed the second quarter – a nice trend. That said, rising investment in greentech is not exactly an indicator of the health of the industry. We need more startup revenue, more M&A, and more IPOs – and that's starting.

Some of the biggest VC deals this year have been:

Suniva                       $75M for high efficiency solar
Powerspan                 $50M for CO2 capture technology for coal-fired electric power plants.
Imperative Energy      $43M for large scale renewable energy from biomass
eMeter                       $32M for smart grid management software

(I don't believe we can count Synthetic Genomic's $300 million big algae investment from Exxon as VC).

Greentech M&A in 2009

We've seen some M&A trends, highlighted by:

• Ongoing consolidation in the solar integrator and installer market
• Rising consolidation and land grabs in the carbon dashboard and utlity carbon monitoring field
• Vertical integration in solar – Bosch's acquisition binge created a vertically integrated entity from Ersol, Aleo and Johanna Solar

Greentech IPOs

Plenty of chatter but the only SEC IPO registration looking like it might launch in 2009 is A123 Systems, the developer and manufacturer of advanced, rechargeable lithium ion batteries.  A123’s product line ranges from 3.6 watts per hour batteries for portable power applications to larger 65 watts per hour batteries for electric vehicles. The company is also developing multi-megawatt battery systems for utilities that can provide electric grid services including standby reserve capacity and frequency regulation.

It is reasonable to expect the A123 IPO to come to market in the fourth quarter of this year – reasonable given A123’s revenue, the government and industry focus on smart grid, and the pent up demand for a greentech IPO.

A123's long-threatened IPO has the potential to draw the market’s attention to the energy storage sector. The IPO will also give us a glimpse on how investment banks and institutional investors like underwriters Morgan Stanley, Goldman Sachs and Lazard Capital Markets will value energy storage firms.

A successful public offering could open the floodgates to more greentech IPOs and usher in the dawn of a finance-rich greentech era. Other Greentech IPO candidates would include Silver Spring Networks, Tesla Motors, Nanosolar and Solyndra.

Every Greentech VC and M&A deal, every month – logged in the Greentech Innovations Report.