Friday, 30 November 2007

Clean Sweep 24

A round-up of recent news in clean technology and cleantech investment.

Deals
Fuel cell tech developer Bac2 has raised £2m from private investor network London Business Angels. The deal is the largest to date for the 25-year-old network, part of the GLE group.
The investment will help Southampton-based Bac2 commercialise its 'ElectroPhen' conductive polymer. When used in a composite, the polymer promises to be a lightweight and cost-effective bi-polar plates for use in fuel cells. The firm is preparing to launch its first standard product, and is also looking at other applications in electronic components and circuits.
Bac2 previously secured a £250,000 grant from the DTI and, in May 2006, raised £500,000 seed investment from London Seed Capital, another GLE subsidiary.

Swedish thermoelectric firm Nanofreeze Technologies has raised SKr7.4m (£565,000) from Scandinavian tech specialists Northzone Ventures and TeknoSeed.
A spin-out from Lund University, Technofreeze is developing highly efficient thermoelectric elements that generate both energy and heat. Potential applications include personal electronic devices, replacing energy-hungry fridge compressors, and powering automobile electronics from the engine.

In an otherwise quiet week across the pond, the big news is the announcement from the omnipotent Google that the search engine giant is now aiming to develop renewable energy cheaper than coal. "Tens of millions on research and development and related investments in renewable energy" are promised for 2008.
The US blogs have provided ample coverage. VentureBeat covers the conference call; Greentech Media canvasses industry opinion; and Earth2Tech digs into Google's favoured start-ups, eSolar and stealthy wind firm Makani Power.
Expect to hear a lot more from this one.


Further reading
The US NVCA reports record cleantech investment in the first three quarters of the year - $2.6bn from 168 deals, well ahead of the total for all of 2006. The top investors are familiar names - Khosla Ventures (14 deals, net value $68.4m), Draper Fisher Jurvetson (14, $38.5m) and KPCB (11, $76.8m). More details here (pdf).

150 corporate leaders (led, curiously, by Prince Charles) issue a communique ahead of the UN climate change conference in Bali, demanding a legally-binding UN framework to tackle emissions. They note:
The shift to a low-carbon economy will create significant business opportunities. New markets for low carbon technologies and products, worth billions of dollars, will be created if the world acts on the scale required
In summary, we believe that tackling climate change is the pro-growth strategy. Ignoring it will ultimately undermine economic growth.

Monday, 26 November 2007

Everyone's business

Today's report from the CBI's 'climate change taskforce' has generated plenty of coverage for the business lobby group. While there's not exactly much new in the report, it's still good to get a signal that the corporate heavyweights are taking the challenges of climate change seriously. And if the signatories are serious about cutting their emissions, it can only be good news for the cleantech companies who can provide the products and services to help them reach their targets.

The report, Climate change: Everyone's business, has been compiled by a panel of execs whose companies together account for around 1% of global emissions. The case for action is put in good solid business terms - failure to act now will mean much greater costs in the future, and the UK will miss out on vital commercial opportunities in the global shift to a lower-carbon economy.

While the CBI isn't usually known for requesting more intervention in the workings of the market economy, it now reckons that a much greater sense of urgency is required if the UK is to meet its emission targets. The market will require a helping hand from government, the report concludes:
Market forces will drive big changes, but they will not by themselves be enough to do the job. The full range of public policies must be deployed to create the right incentives. Priorities include promoting an effective market price for carbon; revenue-neutral tax reform (such as changes to business rates and council tax) to reward greener behaviour; and bigger, more focused research and development programmes to finance new technologies and solutions until they become commercial.

In a move that may prove controversial, the CBI argues for increased use of cap-and-trade schemes rather than a straightforward carbon tax - see the excellent Environmental Economics blog for the counter-arguments.

New technology has a vital part to play, the report emphasises:
The UK has a unique opportunity to prosper in key markets of the future by taking a lead in the development of low carbon technologies and services in power, buildings, transport and industry. Government must give higher priority to existing research and technology programmes in these areas, and support the launch of new programmes to develop emerging solutions.

The report identifies key areas for reducing emissions, with possible technological fixes (some of which, as amply covered elsewhere, are rather questionable from a viability or sustainability viewpoint): from buildings, through better insulation, heating controls and appliances; from the power sector, through greater use of wind, carbon capture and storage (hmm...) and nuclear (hmmmmmmm...); in transport, through improved engine efficiency, and alternative sources such as electric and biofuel (hmm, again...); and from industry, through various process and efficiency improvements.

The CBI panel concludes:
substantial changes will be needed in the way the economy works if the UK is to meet its goals. Many of the technologies and solutions that will be required already exist but are not yet commercially viable. The pace and scale of implementation must now be accelerated.

The new energy research agenda just unveiled by the European Commission might help with all this. The Strategic Energy Research Plan proposes to strengthen industrial research and innovation in new and renewable energies across Europe; introduce six new 'Industrial Initiatives' in areas including wind, solar and bio-energy; and to create a new Energy Research Alliance to ensure greater cooperation between research groups. Detailed proposals for increasing investment in new low-carbon technologies will be presented some time next year - I wouldn't be surprised to see extra money for co-investment venture funds.

The plan also identifies key technology challenges for the next 10 years, including several in the current VC pipeline: making second-generation biofuels a competitive alternative to fossil fuels, without compromising sustainability; demonstrating the commercial readiness of large-scale PV and concentrating solar power; achieving a breakthrough in energy storage tech cost-efficiency; developing the commercial tech for hydrogen fuel cell vehicles; and commercialising more efficient energy conversion and end-use systems, including poly-generation and fuel cells.

Thursday, 22 November 2007

Clean Sweep 23

A round-up of recent news in clean technology and cleantech investment.

Deals
Reading-based energy tech supplier Semplice Energy has raised $1.23m from Bahamas-based BIP Fund.
Founded in 2005, Semplice provides energy efficiency and renewable energy products, plus consulting, design and installation services, to business customers including Mothercare, Macdonalds and Tesco.

German specialist investor Ecolutions has secured undisclosed pre-IPO funding from heroically-named Swiss network Mountain Super Angel.
Frankfurt-based Ecolutions invests in emissions-reducing projects in China and India which generate tradeable certificates under the Clean Development Mechanism (CDM). Projects include biomass power stations, methane extraction from sludge, and solar and wind power. Ecolutions is aiming to list on the Frankfurt Open Market in early December.

Sketchy news on two Israeli solar deals: start-up XJet has raised $9m from Gemini Israel Funds, Good Energies, Taiwanese semiconductor group Spirox and others (although XJet is so stealthy it doesn't seem to have a website as yet, Gemini has the details here). And CPV developer Pythagoras Solar has raised an undisclosed amount from an un-named investor (thanks for sharing, guys).

Californian CPV firm Solfocus meanwhile closed its rolling fundraising at $63.6m. The firm announced it had raised $52m of a planned $70m round back in September.

Here's an interesting technology - motion-to-energy developer M2E Power has raised an $8m first round from OVP Venture Partners, @Ventures and Highway 12 Ventures. The firm is developing power units for mobile electronic devices which generate electricity from physical movement. Details on the pat-pending tech are sketchy, but it appears to be a refinement on the familiar induction method of moving a magnet through a wire coil.
M2E, a spin-out from the Idaho National Laboratory, is primarily focusing on military applications (not every cleantech firm boasts that its chief scientist is 'a veteran of the Vietnam war'). The tech also has potential in anything from mobile phones to large-scale wind and wave power - as @Ventures' Rob Day notes, it's another reason to dance with your MP3 player.

Indian VC UTI Ventures has led a $8m first round in newly-merged waste management group Pesco Beam. The group combines US-based Pesco (Pragmatic Environmental Solutions) with Chennai-based Beam Solutions, and deals primarily with recycling waste oils. The group is seeking a further $25-30m round next year.


Further reading
A new UK government-commissioned report calls for much more support for on-site renewable energy installations. "Advancing Renewables Together", compiled by consultants Element Energy on behalf of DBERR's Renewables Advisory Board, analyses the role of on-site generation in meeting the government's target of ensuring that all new homes are 'zero carbon' by 2016. The policy could create a market for renewables installations worth £2 billion a year, the report claims, but the government needs to find "new ways of bringing forward demand for renewables before 2016, as part of an explicit strategy to build capacity in both the construction sector and in the UK onsite renewables industry". The report calls for R&D into sub-1MW biomass CHP to be made a national priority.

When it comes to trying to build an innovative industry cluster, your regional development types always look to California as the exemplar (even the ones in Yorkshire do it). So there's plenty to chew on in a new report on California's thriving cleantech industry from the non-profit Next10 group headed by veteran VC F Noel Perry. The California Green Innovation Index looks at the factors driving innovation and bringing economic and environmental benefits to the state, including the AB 32 policy of returning to 1990 emissions levels by 2020 (a pretty modest target, but well ahead of the rest of the US). Leading numbers: California holds 44% of US patents in solar technologies and 37% in wind, and 36% of US cleantech VC investment.
The full report is available as a 1.4Mb PDF here.

Depressing reading on the the six sins of greenwash from North American 'environmental marketing agency' TerraChoice. A study of environmental claims made for over 1,000 different consumer products identified only one that wasn't either misleading or demonstrably false.
Should cleantech companies and investors worry? Such ubiquitous marketing bollocks means that genuinely clean products or services risk losing their market share to their less clean (in either sense) rivals; there's also the risk of this fostering cynicism about any and all environmental claims.

And a reminder of what it's all about - the latest IPCC synthesis report warns for the first time of the risk of "abrupt and irreversible" impacts of climate change. The report, a summary of the three studies released earlier this year, features starker warnings in response to complaints that those earlier reports were inappropriately conservative.
With regards to cleantech solutions, the report concludes that there is high agreement and much evidence of substantial economic potential for the mitigation of global emissions over the coming decades, but notes that no single technology can provide all off the mitigation potential in any sector.
The summary report can be downloaded as a 6.4Mb PDF here.

Wednesday, 14 November 2007

Clean Sweep 22

A round-up of recent news in clean technology and cleantech investment.

Deals
The UK's Low Carbon Accelerator has led a C$21.5m second round in Canadian ethanol tech firm Vaperma. Volvo Technology Transfer also joined the round in its first parallel investment alongside its cleantech partner Emerald Technology Ventures, a first-round backer of Vaperma. Existing investors BDC Capital, and FIDD also increased their funding.
Vaperma is developing a gas separation membrance technology for removing water from ethanol, replacing the current energy-intensive steam distillation process. The firm's Siftek technology is primarily aimed at Brazilian sugarcane alcohol and North American grain ethanol producers, and promises to take around seven cents off the costs of a gallon of ethanol.

A clutch of overseas early-stage deals show the role of tech transfer from universities:
Eco-plastics company Novomer raised $6.6m from Physic Ventures and Flagship Ventures. The New York firm is developing biodegradeable polymers based on cheap feedstocks including carbon dioxide and carbon monoxide. The tech was developed by co-founder Geoffrey Coates at Cornell University.
US biocatalyst firm Akermin raised $5m in the second phase of its first round (this is somehow distinct from a small second round, I'm sure). All previous investors, including Prolog Ventures, OnPoint Technologies, Chrysalix Energy and the St Louis Arch Angel Network, increased their stakes. Akermin is developing a stabilised enzyme catalyst technology developed at St Louis University which can potentially replace heavy metals in biofuel cells.
In the solar arena, thin film developer SixTron Advanced Materials raised a C$10m first round led by Canadian VC Ventures West. Seed investors iNovia Capital, Innovatech sud du Qu├ębec, and FIDD also joined in. The Quebec university spin-out is commercialising what it calls a highly innovative and cost-effective method of depositing silicon carbide films on a range of substrates.
Israeli spin-out Distributed Solar Power raised $1.2m from TN Ventures and Aurum Ventures MKI. The funding goes towards the first industrial-scale model of DISP's CHP solar concentrator system.
And printed electronics group Plextronics has raised an extra $4m from Applied Ventures, the VC arm of Applied Materials. The top-up follows a $20.6m second round announced two months ago. Pennsylvania-based Plextronics is developing printed electronic technology based on tech developed at Carnegie Mellon university, with applications including printed solar cells.

Elsewhere, a $3m bridge round for this week's winner of the all-California silly name contest, Fat Spaniel. The firm provides software and hardware that helps renewable energy suppliers monitor efficiency and count their carbon-saving credits. The company raised $7m from DFJ Element and Chrysalix Energy in its first round a year ago, and is aiming for a full-scale $20m second round.


Fund news
UK mid-market buyout house Gresham Private Equity has set up a dedicated energy and environmental team. The two-pronged team will cover investments in the oil and gas industry and the greaner fields of energy management and minimisation, waste management and recycling. Partner Christian Bruning and research/origination manager Peter Lahoud lead the cleantech side.

As detailed below, veteran tech VC KPCB and specialist investor Generation Investment Management have teamed up in a new London-based greentech alliance. Al Gore's involvement in Generation has ensured plenty of media coverage, and should draw the attention of other potential investors to the funds.

European renewables specialist Enercap Capital Partners has announced the first closing of its EnerCap Power Fund I at Euro75m. The Prague-based fund invests in power projects across Central, Eastern and South-Eastern Europe

Israel Cleantech Ventures has launched a new seed-stage initiative in association with US VC Greylock Partners's Israel Fund. Cleanstart will back concept-stage ventures or university spin-outs across the cleantech sector.

Monday, 12 November 2007

Generation and KPCB team up

News of a major cleantech investment partnership setting up in London, with a rather big name on the masthead. Generation Investment Management, a specialist in sustainability-focused investment in listed equities, and veteran tech VC Kleiner Perkins Caufield & Byers have announced a dedicated greentech alliance.

The collaboration will, to quote the PR, find, fund and accelerate green business, technology and policy solutions with the greatest potential to help solve the current climate crisis. The partnership will provide funding and global business-building expertise to a range of businesses, both public and private, and to entrepreneurs [...] The two teams will collaborate on opportunities spanning sectors such as renewable energy technologies, building efficiency, cleaner fossil energy, sustainable agriculture and carbon markets.

In practice, that seems to mean combining Generation's contacts and sector expertise with KPCB's financial heft and experience of building private businesses. And Generation should give good contact - it's the firm co-founded and chaired by former US VP, award-winning alarm-raiser and new Nobel Laureate Al Gore (I'm still not convinced he really deserved to share the prize on an equal basis with the IPCC, but fair play to him anyway).

Gore joins KPCB as a partner (donating his salary to the Alliance for Climate Protection, which he also chairs), while KPCB partner John Doerr joins Generation's advisory board.

The global alliance will apparently be based in London, with KPCB 'co-locating' their European operations in Generation's West End offices. The VC currently has offices in Silicon Valley, Beijing and Shanghai, while Generation also has a base in Washington DC.

Fortune has more of the inside juice.

Monday, 5 November 2007

Clean Sweep 21

A round-up of recent news in clean technology and cleantech investment.
Consider this one as either late for last week or early for this - I'm having a busy couple of weeks.

Deals
Welsh battery business Atraverda has won the backing of two new European investors in a £10.4m second round. Denmark's BankInvest New Energy Solutions and Portugal's Espirito Santo Ventures led the round, with existing investors Scottish Equity Partners, Chord Capital and Finance Wales, plus US-based EnerTech Capital and OnPoint Technologies, also chipping in.
Atraverda, based in the former coal-mining town of Abertillery, is developing bi-polar batteries for use in hybrid electric vehicles, standby power and other applications. The lead-acid batteries are based on the firm's proprietary Ebonex technology, which uses a titanium sub-oxide ceramic to reduce lead content and extend battery life. The bi-polar design also increases energy density and reduces raw material demands. The new funding goes towards product and commercial development.

Dutch biomass research group Bioecon has hooked up with Silicon Valley hotshots Khosla Ventures to launch a bio-oil joint venture called KiOR. The new business will develop and commercialise Bioecon's Biomass Catalytic Cracking (BCC) process, which promises to convert lignocellulosic biomass from grass, wood and agricultural waste into a bio-oil suitable for use in transport fuels. Khosla provides an unspecified first round of funding and strategic support.

Meanwhile back in Silicon Valley, there's one big-ass fundraising for a new electric car venture known only as Project Better Place. The firm, headed by former SAP exec Shai Agassi, coyly says it has 'entered into a term sheet for its first round of funding in the amount of $200 million'. Oil and trade combine Israel Corp has put up half that amount, with Morgan Stanley, VantagePoint Venture Partners, and individual private investors making up the total.
The business model involves leasing existing battery tech to owners and maintaining a network of charging and battery exchange stations - a model which the firm compares to that of mobile phone companies. The subscription-based funding model should substantially reduce the cost and hassle of buying an electric car, and lay the infrastructure for much wider adoption. The firm predicts tipping-point saturation within ten years of rollout.

Still in California, demand response group Optimal Technologies announced a $25m second round from Goldman Sachs - $13m now, with further milestone payments over the next year.
The company says its power-management software can increase an electricity utility's supply by at least 10 per cent. It will launch both supply and demand side systems in 2008.

And San Francisco's solar concentrator business GreenVolts has raised a $10m first round led by Greenlight Energy Resources.
GreenVolt is currently working on a 2MW facility which promises to be the world's largest concentrating PV plant when it opens in late 2008. The firm says its sun-tracking concentrator systems are more efficient that that of rival SolFocus, which raised $52m two months ago.

Pioneering industry research and media company Cleantech Group has hooked up with Credit Suisse and Consensus Business Group in what they're calling a 'strategic business relationship to accelerate global investment in clean technologies'. That means new investment products and advisory services tailored for the fast-expanding sector. Credit Suisse and Consensus are together investing $10m in the Cleantech Group, according to reports.


Fund news
Kent-based VCT manager Foresight Group has held a £15m first close on its new Foresight Sustainable UK Investment Fund. The fund, which is aiming for a £20m close by the end of the year, focuses on environmental infrastructure businesses including renewable energy, waste-to-energy and recycling. Its first investment was in biomass CHP firm O-Gen UK back in June.


Further reading
An interesting list of winners of the 2007 California Clean Tech Open. The business plan competition aims to identify and support the most promising start-ups in one of the world's most active cleantech clusters. Expect some, if not all, to enjoy further VC funding before too long.

The ever-campaigning Guardian names and shames leading UK companies which it reckons aren't taking steps to cut their carbon emissions. If you're selling the goods or services that could help the recalcitrant corporates clean up their act, it may be a good time to give them a call.
Interestingly (if unsurprisingly), the sole private equity group on the FTSE 100, 3i, was among the handful of companies reporting their emission figures in confidence. Over on the Cleantech Blog, Neil Dikeman ponders the issues facing cleantech-hungry VCs trying to reduce their carbon footprints.