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Article from NYTimes.

With Andrew Mason’s forced resignation from Groupon on Thursday, the career of one of the most unusual corporate chieftains has ended.

And what an eclectic journey it has been for the onetime darling of Silicon Valley, which ascended with blinding speed, then crashed just as quickly.

Though Mr. Mason’s departure from the four-year-old company he founded had been speculated about for some time — certainly in light of Groupon’s poor financial performance since its initial public offering — the exit was finalized only on Thursday morning, according to people briefed on the matter.

It was little surprise, coming after yet another disappointing quarter, in which the company missed analyst estimates and posted revenue guidance that also fell short of expectations. The company’s stock slid 24.3 percent on Thursday, to $4.53.

That valued Groupon at just $3 billion — after the company went public in late 2011 at a $12.7 billion valuation.

After meeting Thursday morning, Groupon’s board requested that Mr. Mason resign. He agreed.

Mr. Mason will be replaced on an interim basis by an “office of the chief executive” formed Thursday morning, made up of Eric Lefkofsky, Groupon’s chairman and co-founder, and Ted Leonsis, the board’s vice chairman.

Mr. Mason will still have some presence at the company: He currently owns about 7 percent of Groupon’s stock, and controls a much larger percentage of its voting power.

Mr. Lefkofsky bid Mr. Mason farewell in a fairly standard corporate statement: “On behalf of the entire Groupon board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history.”

In typical fashion, Mr. Mason described the circumstances a bit more trenchantly. Here’s an excerpt from a letter he sent to company employees on Thursday, which he posted online “since it will leak anyway”:

After four and a half intense and wonderful years as C.E.O. of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today.

He also references “Battletoads,” a cult video game for the Nintendo Entertainment System that a small minority of DealBook remembers as being sometimes absurdly difficult.

A Pittsburgh native who graduated from Northwestern University with a degree in music, Mr. Mason rarely ever seemed like the corporate type. He originally created Groupon as part of a bigger Web venture, focusing on daily deals as the most commercially viable part of that start-up.

Even then, he was known for his quirky humor. Three years ago, Mr. Mason made a video for a fictional “Monkey for a Week” lending service.

As Groupon grew, Mr. Mason’s peculiar demeanor sense of humor continued to garner attention. His grooming came up at least once, as Silicon Valley denizens pondered whether he’d hit a tanning salon before appearing at a TechCrunch conference in 2010 with a prominent bronze glow.

And in 2011, Mr. Mason had an unusual way of not responding to a question by All Things D’s Kara Swisher that he didn’t want to answer: with a “death stare.”

Groupon's I.P.O. roadshow video presentation.Groupon’s I.P.O. roadshow video presentation.

By that fall, as the daily deals giant was preparing to go public, Mr. Mason took on a more professional cast. In a video to prospective investors, the Groupon chief executive looked a bit more professional, complete with slicked-back hair and a dark suit and tie.

It was a persona he settled into post-I.P.O., usually delivering sober financial information in his public appearances.

But other parts of the run-up to Groupon’s I.P.O. in late 2011 were hardly laughing matters. The company took fire for introducing controversial accounting measures in its prospectus, which critics contended masked losses and unfairly diminished a need to spend heavily on marketing.

The Securities and Exchange Commission queried the company over its financial information in a series of letters that were eventually made public.

In August of 2011, Groupon announced that it was dropping the metric.

Two months later, the company revised its prospectus again to further clarify additional financial reporting measures, as well as to include an internal e-mail from Mr. Mason that was subsequently leaked to the press.

Even after going public, Groupon still ran into the occasional issue. It restated quarterly results last year after disclosing a “material weakness” in its internal accounting controls.

For all those troubles, Mr. Mason accepted responsibility.

“From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable,” he wrote in his letter…

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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.

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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.”

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Article from GigaOm.

For some odd reason, I felt that it was slim pickings when it came to stories for this weekend. It just might have been my NyQuil. Here are some great stories for you to enjoy while you relax over the next two days.

  • More drugs, more sports, same old Alex Rodriguez: By now you may have heard about New York Yankees third baseman Alex Rodriguez being embroiled in another performance-enhancing drugs scandal. Well, what you might not have done is read the whole 4,500 word piece that started it all. Miami New Times‘ Tim Elfrink in this old-fashioned investigative piece shows you don’t need to have a big budget to write stories that change the game.
  • In conversation with John Cheever: The Paris Review goes back in time and brings to us this conversation with one of America’s beloved writers.
  • Living the American Dream in West Bank: Vice‘s Kiera Feldman goes to hang out with Israel’s illegal homesteaders.
  • Home alone, no really: A Siberian family was cut off from the world for 40 years and lived blissfully unaware of World War II. Great piece.
  • The Art Collector: Steven Cohen, the man behind the hedge fund SAC Capital that is consistently in trouble with prosecutors over issues of insider trading, seems to spend hundreds of millions buying up rare and expensive art. I guess one has to do something with all that money. This is a great profile in n+1 magazine.
  • The parking meters and the coming revolution: Just a great little piece.
  • The spy novelist who knows too much: The New York Times reports on Gérard de Villiers, an 83-year-old Frenchman who writes pulp fiction books — four to five a year — and they are, well, literally ripped from the headlines. Someone please help me get the English translations.

Read more here.

 

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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.

 

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Article from GigaOm.

Chinese auto tech behemoth Wanxiang has won the bidding process in an auction to buy the assets of bankrupt battery maker A123 Systems. On Sunday the companies announced that Wanxiang plans to acquire most of the assets of A123 for $256.6 million. It’s news that could be a bit controversial, given A123 received a $132 million grant from the U.S. government, and could now be owned by a Chinese company.

The winning bid beat out Johnson Control’s bid to acquire A123′s automotive division. Johnson Controls previously had offered to buy the automotive division and two factories for $125 million.

One of the reasons Wanxiang’s offer to buy up A123 had been controversial was because A123 had some U.S. military contracts, which critics didn’t want to see in the hands of a Chinese company. But A123 decided to sell off its government business, including all its U.S. military contracts, to Illinois-based company Navitas Systems, for $2.25 million. Wanxiang acquired the rest of the assets including the grid storage business.

We’ll see if that move silences politician critics like U.S. Sens. John Thune (R-S.D.) and Charles E. Grassley (R-Iowa). The deal still has to be approved by the bankruptcy court as well as the Committee for Foreign Investment in the United States (CIFIUS).

If approved, the future of A123 System’s lithium ion battery tech will fittingly be owned by a Chinese auto giant, as China is increasingly becoming one of the most important markets for electric vehicles. Money from Chinese investors, conglomerates, cities and the government, continues to drive a significant amount of the future of next-generation electric car technology.

The deal also provides a future for A123′s technology, which had a promising beginning, but had suffered a series of setbacks in 2012. Venture-backed A123 held the largest IPO in 2009, raising some $371 million, and was trading at over $20 per share when it started trading. A123 also raised more than $350 million from private investors when it was still a startup.

Yet in recent months, it suffered from manufacturing problems, and also had only a handful of customers for its premium batteries. The company had been losing boat loads of money for years.

The Wanxiang deal still won’t make back enough to cover its debts. A123 says:

Because the total purchase price for A123’s assets would be less than the total amount owed to creditors, the Company does not anticipate any recoveries for its current shareholders and believes its stock to have no value.

Now that the A123 bankruptcy is moving forward, it will be interesting to see what Fisker Automotive, one of A123′s prime customers, will do. Fisker had told the media that it is waiting for the results of the A123 auction before it starts back up assembling its Karma cars.

This isn’t Wanxiang’s first cleantech and clean energy acquisition — it’s actually its fifth in 2012, says the company in a release. Wanxiang has been aggressively acquiring under valued American cleantech and clean energy companies.

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