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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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Tom Siebel’s $100M big data energy startup C3 finally emerges as a player

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on February 7, 2013| Leave a Comment »

Article from GigaOM.

For years little has been known about what stealthy energy data startup C3, founded by Siebel Systems bazillionaire Tom Siebel, has actually been up to. The company has been like a Will Smith summer blockbuster that’s supposed to come out three years from now and will only hint at its plot through artsy abstract trailers. Well, turns out, school is finally out for the summer for C3 — the company has just completed some major milestones for its newly emerged big data energy product, according to Siebel during a talk at the Cleantech Investor Summit on Wednesday.

Siebel, now CEO of the four-year-old startup, said that in September 2012, C3 launched a data grid analytics project for PG&E, which crunched a whole lot of data about commercial and industrial buildings (the kind owned and leased in California by the likes of Cisco, Kaiser Permanente, Safeway and Best Buy). C3′s platform collected disparate data about a half a million buildings, from places like publicly-available data found via Google, to energy consumption data from utilities, to weather data from weather information companies.

The entire project required 28 billion rows of data (at least 8 terabytes) that C3 aggregated, normalized and loaded at 5 million records an hour said Siebel, adding, “this is really hard stuff.” PG&E used this data analytics tool to work with building owners to perform energy efficiency audits in real time for all of the commercial and industrial buildings in its footprint. It was a major success, said Siebel, and in the first few weeks of January of this year PG&E exceeded their energy auditing goal for the entire year.

C3 was also quietly involved in a more high profile big data energy project with GE, which I profiled last week when it launched at Distributech, although at the time I didn’t know C3 was involved. Siebel described the project with GE as “a joint development deal” at grid-scale, trying to solve “petabyte type of problems.” As I reported last week, GE’s Grid IQ Insight software can pull in disparate data from a variety of sources like grid sensors, utility databases and even social media sources on a per second interval basis, and utilities can use the software to peer into their grids, and combat blackouts, in real time.

Siebel says C3 has three of these types of projects live with customers, that combine a big data layer, an analytics layer and a customer presentation layer. The company plans to launch another five projects in 2013 and another five in 2014. Other customers include Entergy, Northeast Utilities, Constellation Energy, NYSEG, Integrys Energy Group, Southern California Edison, ComEd, Rochester Gas & Electric, DTE Energy, as well as GE and McKinsey.

In addition to C3′s commercial and industrial platform it built for PG&E, the company also has developed a residential energy efficiency program, which launched last week, said Siebel. The service, which is in development with Detroit Edison and Entergy, is a loyalty program that gets customers to engage in energy efficiency behaviors in exchange for coupons and points at retailers like Amazon. I’m assuming that this platform has incorporated the technology from the startup Efficiency 2.0 that C3 acquired last Spring. Mailed marketing has long been considered the cutting edge in the utility sector, and “I don’t know if we even get mail at my house,” joked Siebel.

C3 has spent four years, and on the order of $100 million, building the software platform that it is now aggressively selling to utilities and energy vendors. At its core, the C3 platforms use Cassandra for database management system, and all of the applications store all of this data in the cloud, which is a relatively new phenomenon for many utilities to deal with. The company also has some big names as directors, including former Secretary of State Condoleezza Rice, and former Senator and Secretary of Energy Spencer Abraham.

Grid analytics is a sector that is growing 24 percent a year, said Siebel, and C3 intends to be the software layer that sits on top of the grid. He compared the opportunity to “the Internet in 1993.” Siebel, who sold Siebel Systems to Oracle in 2006 for close to $6 billion, is one of the few entrepreneurs in cleantech that would know what that looks like.

Lastly, Siebel said his latest startup endeavor isn’t about saving the world from climate change or reducing carbon emissions, despite the company’s three C’s moniker, and despite the fact that that’s important. Ultimately, he says, “It’s about making money.”

Read more here.

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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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California solar energy systems top 1 gigawatt

Posted in Uncategorized, tagged , , , , , , , , , , , on January 12, 2013| Leave a Comment »

Article from SFGate.

California’s rebate program for businesses and homeowners who install solar panels has now funded enough systems to generate 1 gigawatt of electricity – a level few countries and no other states have ever reached.

California officials reported Thursday that state residents have installed 1,066 megawatts of solar systems using rebates from the $2.4 billion California Solar Initiative, launched in 2007 as a way to jump-start the industry.

For perspective, 1 gigawatt is roughly the output of two conventional power plants or one nuclear reactor. A gigawatt equals 1,000 megawatts. Both are snapshot figures, representing the amount of electricity generated at a given instant.

The rebates decline over time and are now 92 percent lower than they were when the program began. But the number of applications received each year continues to rise as solar power’s popularity spreads.

As a result, state officials say the program should reach its goal of funding enough installations to generate 1,940 megawatts by the end of 2016.

“It’s one of the few examples of a program where, if anything, we’re hitting the goals sooner than anticipated,” said Edward Randolph, director of the energy division at the California Public Utilities Commission, which oversees the program.

“The costs are going down as we hoped, and the market is heading closer to self-sufficiency.”

The program is part of California’s Million Solar Roofs Initiative, a $3.3 billion package of financial incentives offered by the state to build a thriving solar industry here.

The overall initiative, created by the Legislature in 2006, seeks to install enough solar systems across the state to generate 3 gigawatts, reaching that milestone by the end of 2016. Solar power’s spread across the state has been aided by plunging prices, driven lower by a worldwide glut of solar panels. When the California Solar Initiative started offering rebates in early 2007, residential solar installations in the state cost $9.76 per watt on average, according to the program’s data. Now they cost $6.19, a drop of 37 percent.

The rising popularity of solar lease programs – which allow homeowners to install solar systems without owning the equipment – has also helped fuel the solar industry’s growth. The California Solar Initiative is reviewing applications for projects capable of generating another 332 megawatts.

The initiative accounts for roughly half of the solar power capacity installed in California to date.

When other facilities are included – such as photovoltaic power plants that sell their electricity to utilities – the state can now generate more than 2 gigawatts from the sun, according to the Solar Energy Industries Association.

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Digital health funding rose 45 percent in 2012

Posted in Business models, Gerbsman Partners, Investments, tagged , , , , , , , , , , , , , , , , , on January 7, 2013| Leave a Comment »

Article from GigaOm.

Between growing interest in fitness tracking devices, mobile health apps and software for adapting to the changing business of health care, digital health had a banner year in 2012.

According to a year-end funding report from health tech accelerator Rock Health, investors poured $1.4 billion into digital health companies last year, which is up 45 percent from their investment total of $968 million in 2011.  The report, released Monday by the San Francisco-based non-profit, also indicated a 56 percent increase in the number of deals closed in 2012.

As we’ve reported previously, these are interesting times in health care funding as investors rethink their support of biotech and traditional life sciences firms but back digital health companies that leverage mobile devices, cloud computing, open data, sensors and other emerging technology. Indeed, citing research from PricewaterhouseCoopers, Rock Health’s report said that investment in biotech and medical devices declined 4 percent and 16 percent respectively in 2012.

In total, the report said 134 digital health companies each raised more than $2 million in the last year, with one-third of all deals falling into four categories: healthcare purchasing tools for consumers, personal health tracking, Electronic Medical records and hospital administration.

While 179 firms and organizations invested in digital health companies, most only took part in a single deal, Rock Health said, with just eight investors making three or more investments in 2012. Qualcomm Ventures led the list of the most active investors, followed by Aberdare Ventures, Merck Global Health Innovation Fund and NEA.

The Bay Area and Boston lead the way in the number and value of  digital health deals, according to the report. But New York could be coming on strong given the launch of several health startup incubators including Blueprint Health, Startup Health and the New York Digital Health Accelerator in the Big Apple last year.

Read more here.

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