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Posts Tagged ‘greentech’

5 things the Reuters story on cleantech, Kleiner, and Doerr missed

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , , , , , , , , on January 17, 2013| Leave a Comment »

Article from GigaOm.

The notion that a lot of venture capitalists — and in particular Kleiner Perkins — have lost money on cleantech startups is now officially mainstream news, via a long article published in Reuters this week. The article isn’t inaccurate, but it misses a whole lot of nuances including  the big picture global trends of population growth and resource management, the long term play and some of the newer trends of the cleantech sector, and a few of the more successful companies in Kleiner’s cleantech portfolio.

We’ve been covering this roller coaster ride, and Kleiner’s plays for years. Back in the summer of 2010, I first wrote “Greentech investing: not working for most;” and in early 2012 I wrote pieces on “the perils of cleantech investing,” as well as “We can thank Moore’s Law for the cleantech VC bust.” Last year I wrote “Kleiner Perkins web woes, add greentech,” and Kleiner is not so great at investing in auto tech.

Cleantech Open western regional 2012

The article does have a pretty amazing tidbit in there, that Doerr dipped into his own pocket for the $2.5 million that Miasole needed to make payroll before it was sold to Hanergy. But here are 5 things I think the article missed:

1). The long-term larger risk, but bigger payoff: A lot of the manufacturing and infrastructure-based cleantech startups have been taking longer to mature and reach commercialization than their digital peers, and they’ve also needed more money. But when some of these rare companies actually do reach scale and are successful, they could be massive players with huge markets. It’s just a different kind of betting — think putting a $100 on 22 on the roulette wheel, versus $5 on a hand of poker. A combination of the two — a small amount of the high risk investments, with a larger amount of the low risk investments — could be a good play.

That was one of the reasons why it seems like investor Vinod Khosla is still investing in cleantech startups. Khosla Ventures’ biocrude portfolio company KiOR — which the firm mostly owns – has a potential market that is no less than an opportunity to displace oil in transportation. Imagine if a venture investor owned a big chunk of Exxon Mobil.

KiOR1

2). The bigger trend of population growth and resource management: Many venture capitalists might be steering away from the cleantech investing style of years prior, but the overall global trends that originally drove these early cleantech investments will only continue to grow. These planetary trends aren’t wrong, it’s just that a bunch of the investments that were made weren’t that smart. The world will have 9 billion people by 2050, and energy, water and food will have to be managed much more carefully. The climate is also changing, because too many people are using too many fossil fuel-based resources. Technologies — including IT — that manage these resources and replace them with more sustainable ones will have large markets, particularly in developing countries.WindGoogleLady

3). Beyond venture: For many cases, the cleantech investing model isn’t a fit for venture capital. But that doesn’t mean it’s not a good fit for other types of investors like private equity and project finance. Google has put a billion dollars into clean power projects, because those can deliver relatively safe and decent returns. Corporate investors — like GE or NRG Energy — are putting money into cleantech startups because it’s more than just a return, it’s a strategic investment. Cleantech innovation will also continue to come out of university and government labs and will be spurred along by government support of basic science research. Does cleantech innovation need a cleantech VC bubble to start changing the world?

 

4). Kleiner’s portfolio is more nuanced: The Reuters story accurately pointed out Kleiner’s struggling cleantech companies like Fisker, Miasole, Amonix, and others. And also rightly pointed out how the few cleantech companies it backed that went public — like Amyris and Enphase Energy — are now trading below their IPO prices. But the article didn’t mention the exit of solar thermal company Ausra, and also didn’t name some of the more successful and growing companies in Kleiner’s portfolio like Opower, Clean Power Finance, Enlighted, Nest, and RecycleBank. Opower is the energy software company to beat these days.

Honeywell & Opower's iPad smart thermostat app

Honeywell & Opower’s iPad smart thermostat app

5). Cleanweb: See a trend in Kleiner’s more successful and growing cleantech startups? They’re mostly software and digital based. The latest trend in cleantech VC investing is the so-called “clean web,” or using social, mobile, and software to management energy and other resources. Some of these companies are pretty interesting and inspiring, like crowd-funding solar site Solar Mosaic.

Finally, as a side note, it’s now in vogue to point out how cleantech investors have lost money. Many have. But I think investors that have paved the way for world-changing innovation, and taken large risks to do so, should in part be lauded.

 

Read more here.

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Hints of a bubble in green-tech IPOs

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , , , on February 10, 2010| Leave a Comment »

Here is some interresting thoughts from CNET.

“With investors getting smarter and start-ups getting bought, the mood is brightening in green tech. But the high-profile companies seeking to go public this year have some industry watchers talking bubbles.

For proof, investors point to the spate of planned initial public offerings, including electric car maker Tesla Motors, solar company Solyndra, and biofuels maker Codexis. Smart-grid company Silver Spring Networks and biofuels maker Amyris are rumored to be on deck.

Long-term trends may favor innovative green companies, as concerns about energy resources and the environment grow. But that doesn’t mean this year’s leading companies can navigate the complex regulatory and financial environment to become successful companies, said Jack Robinson, founder of Winslow Management, which focuses on environmentally oriented public companies.

“Valuations seem to be ahead of themselves,” Robinson said. “Some of the people [in venture-backed green-tech companies] don’t have the history and don’t understand the pitfalls that need to be addressed from a technology, market, regulatory, and political point of view.”

An example of a company he considers highly valued is lithium ion battery maker A123 Systems, which went public last September. In addition to raising $371 million, it raised the hopes of many other young energy companies.

Investor Rob Day of Black Coral Capital did an analysis of four recent IPO filings in the green-tech area and was concerned when he found that their unofficial revenue numbers were far below the amount of money put into them.

Nonetheless, even early misfires don’t mean investors should write off the whole sector. The high-profile companies that have filed to go public aren’t the best indicators of what’s to come as many other companies could raise funding through private equity sources, rather than tapping the public stock market, Day argued.

“My worry is that if these IPOs are perceived later on this year as having been unsuccessful, it’ll once again set back the entire clean tech venture industry, because of the example it sets in terms of lack of (financial) exits,” he wrote.

Netscape moment ahead?
Even with the worries over financial returns for investors, there’s a reason that IPO hopefuls have gotten as far as they have. It’s widely recognized that Tesla Motors and Solyndra, for example, have developed innovative technologies. Tesla’s $109,000 Roadster has become a darling among the well-heeled and its planned Model S sedan, priced at about $57,000 before tax credits, has legions of fans even though it won’t be built for two more years.

Solyndra has developed a solar collector designed specifically for flat commercial rooftops. In its first installations, the company touts how quickly these collectors, which use curved thin-film solar cells, can be installed, which brings down the overall system cost.

As with many green-tech upstarts, though, both companies have big-time challenges. Solyndra and Tesla borrowed hundreds of millions of dollars from the U.S. Department of Energy to build manufacturing facilities and they face powerful competition, in the form of incumbent automakers and low-cost Chinese solar panel producers.”

Read the full article here.

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Top Ten Greentech Misses in 2009

Posted in boic, tagged , , , , on December 29, 2009| Leave a Comment »

Here is a article from Greentech Media.

“2009 had plenty of greentech hits: technical breakthroughs, lots of VC and government funding, some interesting acquisitions and a few successful IPOs.  But there were also a number of misses. Here’s a list:

Spain Pays for Its Poorly Executed Solar Subsidy: The mistakes happened in 2008 but the echoes were felt in 2009. Spain went from being the largest PV market in 2008 to almost zero in 2009.

Spain had a lucrative feed-in tariff program that required utilities to buy solar electricity at high rates set by the government. After seeing an explosive growth of solar projects that far surpassed its estimates, the government reduced the solar electricity rates for solar power plants installed after September 2008. Additionally,  government investigation uncovered widespread fraud in the administration and roll-out of the FIT program.

A rush to install solar energy systems led to reports of fraud by developers claiming they had finished their projects when they only installed some of the panels or, in some cases, put in fake solar panels to buy time.

Spain had been a great market for Chinese panel makers, who were able to sell their goods at premium prices in 2008.  Not so in 2009.

Optisolar Lands Hard: Optisolar had raised more than $300 million based on a vision of the economies of scale of building a gigawatt-sized factory.  The vision was that the cost of solar could be radically dropped by building “Solar City” factory complexes capable of churning out 2.1 gigawatts to 3.6 gigawatts of solar cells a year. These factories would cost $500 million to $600 million and be composed of factories-within-factories focused on different tasks: an onsite glass making outfit capable of cranking out 30 million square meters of glass a year; a solar cell unit with 100 identical manufacturing lines; and a full-fledged packaging facility.

In this ideal world modules would cost 0.60 cents to 0.52 cents per watt and fully installed solar power would cost $1.00 to 0.88 cents a watt.

As per Michael Kanellos’ article: The ideas from the Keshner NREL paper largely formed the company’s business plan.

After building a factory in Hayward capable of producing 30 megawatts to 50 megawatts, it landed $20 million in tax breaks in 2007 to build a factory at McClellan Air Force Base in Sacramento County. By 2011, the million square foot facility would employ 1,000 and put out over 600 megawatts worth of solar panels a year. Although the original paper discussed ways of making cheap solar panels out of CIGS, cadmium telluride or amorphous silicon, OptiSolar focused on silicon because, among other reasons, of its far wider availability.

Plans were also being laid to build an even larger factory after McClellan that would contain the in-house sub-factory for glass making as discussed in 2004.”

Read the full article here.

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