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Posts Tagged ‘cleantech’

Lux Capital closes $245M third fund, remains committed to energy tech

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , , , , on February 13, 2013| Leave a Comment »

Article from GigaOm.

Not all venture firms are joining the cleantech exodus. Lux Capital, which invests in a lot of science-based, hardware and infrastructure innovations, has closed its third fund of $245 million, and Lux Capital partner Peter Hebert told me that the firm will continue its current model of investing about a third of its funds into energy tech, a third in information technology and a third in health and biotechnology.

A few of Lux’s portfolio companies appear to be doing pretty well. Kurion, a startup developing nuclear waste cleanup tech, scored a breakthrough deal to help clean waste water for Japan’s Fukushima nuclear meltdown. About a year ago I called them “the most successful greentech startup you haven’t heard of.” Portfolio company Shapeways has become synonymous with the emerging industry of 3D printing, and smart grid startup Gridco just launched to build a next-gen power grid using solid state transformers. Portfolio firms that have been acquired include skin company Magen Biosciences, LED tech company Crystal IS, and chip companies SiBeam and Silicon Clock.

“There’s definitely been negative sentiment towards cleantech in the market,” said Hebert, but it really “depends on the individual Limited Partners” (the groups that put money into venture firms). Our LPs still see substantial innovation ahead around energy and resources, said Hebert. Going forward in 2013 “we remain disciplined and selective,” said Hebert.

While Lux says it remains committed to energy tech investing, other firms have been unable to raise new cleantech funds, and some have dialed back or transformed their energy and cleantech focused divisions to make them more capital efficient. VantagePoint Capital Partners shut down its efforts to raise a $1.25 billion cleantech fund recently, and firms like Mohr Davidow and Draper Fisher Jurvetson have reduced their commitments and turned to backing IT-based cleantech, or cleanweb companies only. In 2012, venture capital firms put a third less money into cleantech companies compared to 2011.

Still some investors like Lux Capital still see the potential of energy and resources technology innovation. Canadian firm Chrysalix says its energy focused portfolio is doing well. NEA says its still committed to energy investing, though its scaled back a bit. Khosla Ventures still continues to make aggressive and many bets across sustainability from energy to agriculture to smart grid to biofuels.

Read more here.

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Silicon Valley Venture Capital Survey – Third Quarter 2012

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , , , on November 19, 2012| Leave a Comment »

Article from Fenwick & West.

Background—We analyzed the terms of venture financings for 117 companies headquartered in Silicon Valley that reported raising money in the third quarter of 2012.

Overview of Fenwick & West Results

Venture financings in 3Q12 continued to show solid price increases from their prior round, but 3Q12 was not as strong as 2Q12.

    • Up rounds exceeded down rounds in 3Q12, 61% to 17%, with 22% of rounds flat. This was another strong quarter, but not as strong as 2Q12 when 74% of rounds were up, 11% down and 15% flat. This was the 13th quarter in a row in which up rounds exceeded down rounds.

Series B rounds were especially strong, with 92% of Series B rounds up, and Series E (and later) rounds were relatively weak, with only 44% up. However 64% of the Series B rounds were software and internet/digital media companies, while only 39% of the Series E rounds were from those industries, and as described below, software and internet/digital media were the strongest industries.

  • The Fenwick & West Venture Capital Barometer™ showed an average price increase of 78% in 3Q12 – again a solid result but a decrease from 99% in 2Q12. There were three financings in 3Q12 that were up over 750% (two in internet/digital media and one in hardware), and if these three were excluded the Barometer would have been up 50% rather than 78%.
  • The median price increase of financings in 3Q12 was 23%, down from 30% in 2Q12, and the lowest median price increase in the past two years.
  • The results by industry are set forth below. In general the software and internet/digital media industries continued to be the strongest, cleantech showed good results on very low volume, hardware lagged a bit and the life science industry trailed significantly.

Overview of Other Industry Data

The third quarter of 2012 was generally not a strong one for the venture industry, with the upcoming election, the looming “fiscal cliff” and global economic uncertainty perhaps weighing on investors’ minds.

  • Venture investing in the U.S. was down slightly in 3Q12 compared to 2Q12, and 2012 is on track to be below 2011.
  • M&A was down slightly in 3Q12 compared to 2Q12, and was also down slightly in the first nine months of 2Q12 compared to the first nine months of 2011.
  • The number of IPOs was down slightly both in 3Q12, compared to 2Q12, and in the first nine months of 2012 compared to the first nine months of 2011.
  • Venture fundraising in 3Q12 lagged 2Q12, but year to date fundraising in 2012 was above 2011 levels. Funding continues to be concentrated in a limited number of large funds, although less so in 3Q12 than 2Q12.
    • Venture Capital Investment.

      Dow Jones VentureSource (“VentureSouce”) reported that U.S. companies raised $6.92 billion in 820 venture financings in 3Q12, a 14.6% decrease in dollars and a 5% decrease in transactions from the $8.1 billion raised in 863 financings in 2Q12 (as reported in July 2012). Similarly, venture investment was down 15%, and the number of financings was down 3%, for the first nine months of 2012 compared to the first nine months of 2011.

      Venture capital investment in Silicon Valley was down 22% from the first nine months of 2012 ($8.2 billion) compared to the first nine months of 2011 ($10.5 billion), although the number of deals was only down 6.5%. That said, Silicon Valley received 39% of all U.S. venture investment in 3Q12.

The median amount raised in a 3Q12 financing round was $3.7 million, the lowest quarterly median amount since 1997. This result was driven in part by first round financings, whose median amount raised is on track to be $2.5 million for 2012, which would be the lowest annual amount since 1992.

The lead venture investors in 3Q12 were Google Ventures with 21 deals, Kleiner Perkins with 17, and 500 Startups and NEA with 16 each. Google Ventures recently announced that it was increasing its annual fund size from $200 million to $300 million, which will allow it to make more late stage investments (Sarah McBride, Reuters, 11/8/12).

Similar to VentureSource, the PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters (the “MoneyTree Report”) reported that $6.5 billion was invested in 890 deals in 3Q12, a 7.1% decrease in dollars and a 1% decrease in transactions from the $7.0 billion raised in 898 deals in 2Q12 (as reported in July 2012). The MoneyTree Report also indicated that venture investing in 2012 is on track to be below 2011 amounts in both dollars and deal volume, and that seed stage venture investing was especially weak.

The MoneyTree Report also reported that software and internet/digital media investing remained strong in 3Q12 at $2.1 billion, but both industries declined in dollar terms from 2Q12 amounts. Life science investing, led by follow-on biotech financings, increased in dollar terms from 2Q12, but is down 19% year-to-date compared to the first nine months of 2011. Cleantech investing declined 20% in dollars compared to 2Q12, but saw an increase in the number of deals as investing in this sector appears to be shifting to smaller, less capital intensive deals.

    • Merger and Acquisitions Activity.

      Dow Jones reported 99 acquisitions (including buyouts) of venture-backed U.S. companies for $13 billion in 3Q12, a 10% decrease in transactions, and a 5% decrease in dollars from the 110 transactions for $13.7 billion reported in 2Q12 (as reported in July 2012). Nearly half of the companies acquired this quarter were based in California. For the first nine months of 2012, there were 314 acquisitions of venture backed companies for a total of $39.5 billion, a decrease from the 404 acquisitions for $40.6 billion in the first nine months of 2011.

Similarly, Thomson Reuters and the NVCA (“Thomson/NVCA”) reported 96 venture-backed acquisitions in 3Q12, a 6% decrease from the 102 reported in 2Q12 (as reported in July 2012). IT companies dominated the acquisition environment in 3Q12, with 70 of the 96 transactions.

  • IPO Activity.

    VentureSource reported 10 IPOs of U.S. venture-backed companies raising $807 million in 3Q12. This was a slight decrease from the 11 IPOs raising $7.7 billion ($6.8 billion was Facebook) in 2Q12 (as reported in July 2012).

    Similarly, Thomson/NVCA reported 10 IPOs raising $1.1 billion in 3Q12, compared to 11 IPOs raising $1.3 billion in 2Q12. (It appears that Thomson/NVCA includes sales by shareholders in their calculation of the amount raised). Six of the IPOs were in the IT industry, six were from companies based in California and all were from companies in the U.S. For the first nine months of 2012, there were 40 IPOs compared to 41 IPOs in the first nine months of 2011.

  • Venture Capital Fundraising.

    Thomson/NVCA reported that 53 U.S. venture funds raised $5.0 billion in 3Q12, a 15% decrease in dollars but a 40% increase in funds from the $5.9 billion raised by 38 funds in 2Q12 (as reported in July 2012). Fundraising for the first nine months of 2012 was $16.2 billion raised by 148 funds, a 31% increase in dollars from the $12.4 billion raised in the first nine months of 2011, but a 13% decrease in funds. The concentration of fundraising by a few large funds decreased a bit in 3Q12, where the top five funds accounted for 55% of fundraising, as compared to 2Q12 when they accounted for 80% of fundraising, but was still significant.

    Thomson/NVCA also reported that the number of mid-sized venture funds ($250-800 million in size) raising funds has declined significantly over the past five years, with 41 and 45 raising money in 2006 and 2007 respectively, while only 16 raised money in 2011 and only 10 raised money in the first half of 2012 (Private Markets, Mark Boslet, 10/2/12).

    Dow Jones reported generally similar fundraising results, finding that $4.73 billion was raised in 3Q12 (but by only 37 funds) and that fundraising for 2012 to date was $17.5 billion versus $12.7 billion in the first nine months of 2011. However Dow Jones found that 9% more funds raised money in 2012 to date compared to the same period in 2011.

    Venture fundraising again lagged venture investment in 3Q12 by a significant amount.

  • Developments in Non-IT Fundraising.

    With traditional fundraising by non-IT venture funds (e.g. life science, cleantech and hardware funds) especially challenging, some alternative funding mechanisms are appearing. This funding is often by entities, such as large corporations and governments, that have motives for investing in addition to financial return (e.g. filling product pipelines, diversifying a nation’s economy), or that have a longer time horizon.

    For example Thomson/NVCA has reported that corporate venture capitalists participated in 17.5% of life science financings in 2011 through the first half of 2012, up from 15.3% in the 2010/2011 time frame. Large pharmaceutical companies are also expanding their investments in, and forming closer ties with, traditional venture capitalists (Timothy Hay, VentureWire, 10/9/12). Johnson & Johnson is even creating early stage “innovation centers” in life science hubs such as San Francisco, Cambridge, London and China to improve access to early stage life science companies. (Brian Gormley, VentureWire, 9/18/12).

    Similarly, in the cleantech area, Broadscale Investment Network has been formed to connect large energy corporations with energy start-ups for investing and partnership purposes, and well known companies like GE and Duke Energy have paid to participate in this venture. (Yuliya Chernova, Venture Wire, 9/24/12).

    In sovereign investing, the Russian government backed fund of funds, RVC-USA, has committed up to $400 million to U.S. start-ups focused in medical devices, IT infrastructure, energy efficiency technologies and telecommunications. Similarly, another Russian fund, Rusnano has invested hundreds of millions in U.S. venture funds, especially those focused in the life sciences (Jonathan Shieber, LBO Wire, 9/11/12).

  • Kauffman Report on Immigrant Entrepreneurs.

    A recent Kauffman Report by Vivek Wadhwa concludes that the U.S. is becoming less attractive to foreign entrepreneurs. The report found that the percentage of Silicon Valley-based companies with a foreign born founder decreased from 52% over the period 1995-2005 to 43% over the period 2005-2012. Visa/immigration problems was listed as a major problem. The improvement in the entrepreneurial environment in countries outside the U.S. was also a likely factor. The report found that by far the largest number of entrepreneurial immigrants to the U.S. came from India (33%), followed by China (8.1%), the U.K. (6.3%), Canada (4.2%), Germany (3.9%), Israel (3.5%) and Russia (2.4%).

  • Accelerators and Angels.

    As noted above, early stage venture investing has declined recently, but the growth of early stage non- venture funding is continuing and may be offsetting this trend.

    For example, the number of accelerators and incubators continues to grow, with worldwide estimates ranging from 200-700. There is concern, however, about the value of some of these accelerators. A recent study by Kauffman Fellow Aziz Gilani of venture firm DFJ Mercury analyzing 29 accelerators found that 45% failed to produce even one graduate that obtained venture funding. David Cohen of Techstars has encouraged accelerators to publish their track records, so that entrepreneurs can be better informed in their selection process. A possible trend in the accelerator environment is increased specialization, with accelerators focusing on assisting entrepreneurs in a specific industry. (Tom Stein, Private Markets, 9/512; Mark Boslet, Private Markets, 10/2/12).

    Angel investing also continues to grow, increasing 3.1% in the first half of 2012 over the first half of 2011, with 40% of such funding going to seed and early stage companies. Jeffrey Sohl, “The Angel Investor Market in Q1/Q2 2012: A Market in Steady Recovery”, Center for Venture Research, October 10, 2012.

  • Venture Capital Return.

    Cambridge Associates reported that the value of its venture capital index increased by 0.61% in 2Q12 (3Q12 information has not been publicly released) compared to -5.06% for Nasdaq. The venture capital index was also slightly higher Nasdaq for the 12 month period ended June 30, 2012, 6% vs. 5.82%, but still lagged for the ten year period ending June 30, 2012, 5.28% to 7.21% per year. The Cambridge Associates venture index is net of fees, expenses and carried interest.

  • Venture Capital Sentiment.

    The Silicon Valley Venture Capitalist Confidence Index™ produced by Professor Mark Cannice at the University of San Francisco reported that the confidence level of Silicon Valley venture capitalists was 3.53 on a 5-point scale in 3Q12, a small increase from the 3.47 reported in 2Q12. Venture capitalists expressed concern about high valuations, macro economic uncertainty and life science funding, but felt positive about the depth and breadth of innovation in Silicon Valley, especially in the mobile, cloud and payment industries, and the availability of strategic acquirors with substantial cash holdings.

  • Nasdaq.

    Nasdaq increased 6.1% in 3Q12, and is flat in 4Q12 through November 8, 2012.

Read orginial article here.

 

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Valley clean energy innovation can prosper, it just takes awhile

Posted in Board Of Intellectual Capital, Business models, cleantech, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Technology, tagged , , , , , , , , , , , , , on March 12, 2012| Leave a Comment »

Article from GigaOm.

“Two Silicon Valley-backed Bay Area companies appear to be the tech vendors behind Apple’s new sizable and pioneering clean power push at its massive data center in North Carolina. Last week it was revealed that solar panel maker SunPower will provide Apple with panels for a 20 MW solar farm, while I reported earlier this month that fuel cell maker Bloom Energy looks to be the vendor behind Apple’s 5 MW fuel cell farm. The significance of Apple opting to partner with two Valley-born clean power firms illustrates that the greentech venture ecosystem can work — it just takes quite a long time.

San Jose, Calif.-based solar panel maker SunPower was founded way back in the mid-80′s by Stanford electrical engineering professor Richard Swanson, and received early funds from the Department of Energy, the Electric Power Research Institute, two venture capital firms and chip firm Cypress Semiconductor. The company went public in the Spring of 2005, bought venture-backed Berkeley, Calif.-based solar installer Powerlight in late 2006, and more recently was bought by oil giant Total.

Sunnyvale, Calif-based fuel cell maker Bloom Energy was founded a decade ago, though only came out of stealth two years ago, and was venture capital firm Kleiner Perkin’s first foray into greentech. Bloom also counts venture firm NEA as an investor, and Bloom raised its latest $150 million round of funding in late 2011.

Both companies have taken years to develop into firms that can mass produce their respective clean power technologies at scale and at a low enough cost to meet the needs of a large customer like Apple. And both companies have likely taken longer to mature than their investors had originally hoped. Kleiner Partner John Doerr said a couple years ago that he thought Bloom Energy would take nine years to go public (which, if true, would mean Bloom would have gone public last year). SunPower’s execs reportedly said back in the early(ish) days of the company that developing SunPower into a solar manufacturer took a lot longer than they anticipated.

But Apple apparently chose these two Bay Area clean power leaders for its first-of-its-kind, huge solar and clean power farms, suggesting these firms are delivering industry-leading products at the right economics for Apple. Apple is spending $1 billion on the data center, and likely between $70 million to $100 million on the solar farm. Each 100 kW Bloom fuel cell costs between $700,000 to $800,000 (before subsidies), so Apple’s fuel cell farm could cost around $35 million.

Yes, both SunPower and Bloom Energy, have had their fare share of struggles in recent years. 2011 was a particularly difficult year for SunPower, with a glut of solar panels causing prices to fall around 50 percent globally and Total’s CEO said recently that SunPower would have gone bankrupt last year without Total’s backing. Bloom Energy is a private company and doesn’t disclose its financials, but likely if Bloom was in shape to go public in 2011, it would have done so.

However, it’s no secret that greentech has been a particularly hard area for venture capitalists to invest in. The long time tables, the large capital needed, the hardcore science for the innovations, and the low cost focused energy markets, have created a difficult ecosystem for the traditional VC to make money off of. But after a long slog — which is still ongoing for SunPower and Bloom Energy in 2012 — these clean power technologies have actually broken into the mainstream. Valley, backed cleantech firms can make it — you’ve just got to sit back and wait.”

Read original article here.

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Report: Clean tech investment set to soar 35 per cent this year

Posted in Board Of Intellectual Capital, boic, cleantech, tagged , , , on March 30, 2010| Leave a Comment »

Here is an Cleantech story from BusinessGreen.

“Global investment in clean technology will rise 35 per cent this year, despite ongoing uncertainty over climate change policy in the US and EU, according to a report published today by research firm Datamonitor.

The report, entitled Challenges and opportunities for energy utility companies post-Copenhagen, predicts clean tech investment will bounce back strongly this year, led by the wind energy sector, which has received a major boost from government-backed economic stimulus packages.

Alex Desbarres, senior renewables analyst at Datamonitor, said that despite the failure to deliver an international climate change deal and ongoing uncertainty about the future of the carbon markets in the US and Europe, growing numbers of businesses are increasing their investment in clean technologies.

“Copenhagen did not deliver the low-carbon vision, clear policy landscape and regulatory frameworks that the energy clean tech investment community had hoped for,” he said. “For all its flaws, however, the Copenhagen Accord gave the clean tech community the sense that private investors will drive the transition to a low-carbon economy.”

The report said there was little evidence that an overarching global regulatory framework would be developed within the next few years, but argued that with new national and sub-national legislation and initiatives emerging all the time, investors will continue to flock to the clean tech sector.

“Datamonitor expects that progress on new global and US climate regimes will be slow and unconvincing this year, but that the race to dominate the emerging clean economy will accelerate regardless, fuelled by unprecedented quantities of green and clean stimulus funding,” the report states.

The study is the latest in a series of reports to suggest that the clean tech sector is recovering well after venture capital investment levels collapsed following the onset of recession in 2008.”

Read the full story here.

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Cleantech economics 101: Higher fossil fuel prices, more cleantech

Posted in Board Of Intellectual Capital, tagged , , , on February 16, 2010| Leave a Comment »

Here is a good article written by David Gold posted at The Cleantech Group.

“With all the complexities of cleantech policy and technologies, there is only one simple thing needed for an explosion of competitive clean technologies: an increase in the price of fossil fuels.

The amount of R&D that will need to be invested in clean technology in order for them to become competitive is much greater with low fossil fuel prices. And, the lower those prices, the less appetite the private sector has for making such investments.

This leaves a much-increased burden on the back of government through grants and subsidies—a back that is close to being broken from debt.

While clean technology development is absolutely necessary, technology development takes time and, often, a long time. And technology development is fraught with uncertainty…nobody ever knows a priori whether such efforts will be successful and how long they will take. Believe me… every venture fund in the world would love to be able to know that! But they don’t.

However, virtually every venture fund and researcher will acknowledge that significant advances usually take much more time and more money than expected.

In an environment of relatively low fossil fuel prices with high price volatility, grants and subsidies for an amount of time and at a level that will make any permanent and meaningful difference are simply unsustainable. So, for all the focus on “cleantech stimulus,” the most important thing that government can do is to affect change in the cost of fossil fuel alternatives.

If we had higher fossil fuel prices, or even just clearer visibility and certainty about future increases, the free market would make dramatic increases in investment in clean technology. When the free market sees an opportunity to make a profit, it moves extremely fast.

Government actions that put in motion increases in the cost of fossil fuel alternatives, even if those increases are phased in over many years, could have an enormous impact on the money invested by the private sector in alternatives (and a corresponding decrease in need for government subsidies and grants).

This, in turn, could further accelerate technology advances, leading to a more rapid convergence of the time when various technologies can competitively reach the mass market.

Given that fossil fuels are a finite resource, it is a fait accompli that eventually alternative energy and energy efficiency technologies will become so compelling that they will dominate the market. But the future of fossil fuel prices in the relatively near term (e.g., the next decade or two) is far from certain (article), as both general economic conditions and new discoveries such as those in Venezuela’s Orinoco Belt play a role.

If we didn’t care about global warming, national security or economic security, there would be little need to do anything but let the market take its course. But irrespective of personal policy hot buttons, most would agree that we do not have the luxury of the amount of time for this transition to take on its own.”

Read the full article here.

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