cleantech
cleantech insights

Water: Week in Review

Mia Javier

 

M&A/ Partnerships

Projects

Share/Bookmark

Loving (and hating) Water Outlooks?

Mia Javier

It’s only natural that as an analyst, I am consistently asked to whip out my crystal ball and share the future of water technologies. The reality is that I’m more inclined to highlight the challenges that water innovators are confronted with in the context of our global need for better water resource management. Naturally, it would be worthless to consider technologies outside the scope of the solutions that they need to solve. So while there are some days that I hate to answer a specific water technology outlook request, most days I love sharing my answer to this question.

Since a typical aspect of market research has historically been market sizing, many water outlook requests are growth trend questions. In other words, the typical question is: where should I be investing my money in the water sector? Which markets present the greatest opportunity?

For those of you that know about the Black Swan (the theory, not the movie starring Natalie Portman), it suggests that the most innovative companies that have emerged throughout history while complete surprises, were ultimately rationalized in hindsight. I’m not saying that market sizing isn’t important (our CEO would kill me if I said that!), I’m saying …

Weekly Investment Highlights

Hans Chen

Each week our research team tracks cleantech transactions across the globe. This week we recorded six VC/PE deals, two fund announcements, 13 M&As and two IPO-related announcements. Below are some of the highlights. Cleantech Group subscribers can see the full roundup of all the deals here.

VC, private company and corporate investments

Over $215 million of venture fund was raised by six cleantech companies, the two largest deals were:

  • California-based luxury electric vehicle maker Fisker Automotive raised an additional $40 million through its latest round of private fundraising, adding to the $150 million it snatched up in February. In total, between public funds and private investments, Fisker has raised in excess of $1 billion. However, according to the company, it currently has “no specific usage” for the additional $40 million, only stating that the money provides a “comfortable cushion.”
  • Smart building start-up Scientific Conservation announced that it has expanded its Series B funding round from $15.65 million to $19 million, with investment from GE Energy Financial Services and Triangle Peak Partners. The firm develops a web-based software platform that links into a building’s existing automation system and applies analytics to continuously predict, detect and diagnose system faults and anomalies.

Cleantech ROI: Follow the signal, not the noise

Josh Gould

I recently celebrated my birthday and, as is typical of such events, it initiated some self-reflection.  One area of reflection involved career choice.  I wondered: Are those of us dedicating valuable time and careers to cleantech making good decisions?  Putting aside the role that cleantech may play in avoiding a planetary/environmental disaster, what about a strictly practical or financial perspective?  Will cleantech provide us with good returns on our capital (or time)?

Those of us in the industry clearly have confirmation bias.  Quite simply, we’d all like to think we aren’t wasting our time (and money).  But what points might we make to outsiders evaluating the industry as an investment thesis?  Here’s a few:

  1. Follow the signal, not the noise: We at Cleantech Group have monitored the ups and downs of the industry since we helped define it as an investment category a decade ago (see here).  We’ve seen results change significantly from quarter to quarter.  While these findings are valuable in helping investors refine tactics, it’s important to recognize that cleantech markets are being driven by macro trends that will play out over the next few decades.  These include issues like urbanization, geopolitical instability, international competition, global resource scarcity, and the need for greater productivity and efficiency.  These trends will ebb and flow over time, but will not go away anytime soon.  This is why we believe the cleantech opportunity will

Voltea: Scalability in Clean Water? Come to Amsterdam to find out.

TroyAult

The world needs clean water.  The Millennium Project and UNICEF estimate that a billion people around the globe lack access to clean drinking water, and that number is expected to increase to 3.9 billion, or nearly half the projected population, by 2030.  Just as relevant for readers of this blog: Water scarcity represents a growing operational risk in many different areas of industry and commerce around the globe.

Enter Voltea, an intriguing cleantech company poised to present in the Entrepreneur Showcase at our upcoming Amsterdam Forum next month.

Traditionally, thermal processes such as vacuum distillation and multi-stage flash distillation have made desalination an inefficient and energy intensive business.  But around 2004, a partnership between Unilever and U.S.-based BioSource started the wheels a-turnin’ to change all that.  That relationship resulted in the 2006 Unilever spin-off of Voltea, a venture-backed Dutch company that is scaling a technology called Membrane Capacitive Deionization (MCDI) for applications ranging from small scale drinking water to heavy industry.

How’s it work?  When salt disolves in water it forms positive and negative ions.  In capacitive deionization, feed water flows through a space between oppositely charged porous electrodes.  The opposing charges of the two electrodes create a low-voltage electromagnetic …

Is Cleantech War the New Cold War?

Hans Chen

The Cold War is already part of our history textbook. For the past 20 years, the Americans have lived their lives without having to think about the nemesis, Soviet Union.

Life is good, right?

In 2000, at a time when Americans were enjoying prosperity and innovation, a high school teacher asked his American Government class, “which country do you think will become our next ‘nemesis’?” The flurry of answers included Germany, Japan, a “Unified Europe” and even Russia.

“Let me tell you what. It will be China,” the teacher said.

Sitting in the front row, I was not the only student who doubted that statement in the classroom. But after 11 years, it’s probable that no one would have any doubt in that statement. China has become a monster and we all know it. Moreover, unlike the Soviet Union, China is embracing capitalism in a totalitarian way, making the Chinese version of capitalism more efficient, in some ways, than the American version.

Just recently China announced its 12th Five-Year Plan, emphasizing cleantech more than ever. 70 billion watts of wind power, 5 billion watts of solar power, 11.4% non-fossil-fuel energy generation by 2015, 40%~50% reduction in CO2 emission…the …

Weekly Investment Highlights

Hans Chen

Each week our research team tracks cleantech transactions across the globe. This week we recorded eight VC/PE deals, one fund announcements, nine M&As and two IPO-related announcements. Below are some of the highlights. Cleantech Group subscribers can see the full roundup of all the deals here.

VC, private company and corporate investments

Over $368m of venture fund was raised by eight cleantech companies, the two largest deals were:

  • US private equity firm TPG revealed its plan to invest HK$1.2b (~$150m) into Hong Kong-listed Chinese solar wafer maker Comtec Solar Systems. The investment, which is TPG’s first in the Chinese solar sector, takes the form of HK$780m (~$100.2m) in newly-issued convertible bonds and up to HK$390m (~$50.1m) in warrants, in exchange for 21% of Comtec’s issued share capital.
  • Suniva, a Georgia-based developer and manufacturer of high-efficiency silicon photovoltaic cells, raised $94.4m of a venture round targeted at $115m from New Enterprise Associates (NEA), Warburg Pincus, et al. The company previously raised more than $130 million from investors including NEA, Warburg Pincus, H.I.G. Ventures, and Advanced Equities.

Mergers and acquisitions

Nine cleantech M&A transactions were tracked this week. Highlights included:

  • India-based Aditya Birla Group, the world’s largest viscose staple fiber (VSF)

Energy Management in Water: Focus on Derceto

Mia Javier

There has been a lot of discussion around the water-energy nexus concept. Innovators are developing new technologies to improve the energy requirements of treatment technologies while others are developing technologies that harvest the energy and mineral/nutrient content of waste streams. It is an immensely promising area due in no small part to the fact that customers of all camps are typically quite sensitive to their energy costs.

Water utilities in particular are acutely aware that approximately 90% to 95% of their energy related costs are utilized by pumps. While the prioritization of energy efficient pumps in the procurement process can save on such costs, engineering firms play a significant role in helping water utilities optimize pump scheduling of existing assets. Such services are typically based on hourly rates on a per project basis and can be viewed as either potential partnership opportunities or gating barriers for new water market entrants.

Derceto (see Company Insight Report, subscription required), is a New Zealand based company that has a perspective from both worlds. The company spun off from an engineering firm and now sells an ‘off the shelf’ software product that optimizes pump scheduling for water utilities. Their software has helped EBMUD

What’s happening in Natural Gas?

TroyAult

You’ve probably heard the spiel.  T. Boone Pickens and his biyuns of this and that.  Well in the last three years Boone and his billions have proved effective in letting the country know that we hold beneath our feet a resource that has the potential to (temporarily) appease both energy security and climate change hawks.  So what’s happening now?

1)      Natural Gas is looked at as a “bridge” fuel to better times (when the land is covered with wind turbines and PV panels and every garage will house an electric vehicle) because, as the table below shows, it is more efficiently converted to thermal and electrical energy from its original chemical state with lower carbon emissions compared to its competitors in the transportation and electric power arenas.  And thanks to recent innovation in horizontal drilling techniques, we’re now able to extract Natural Gas from impermeable shale, meaning we are now able to recover a lot more of our domestic reserves.

2)      Congress is poised to take up debate of Mr. Pickens’ baby, H.R. 1380 (don’t worry, you need not read the whole thing – congress likely won’t), which would encourage proliferation of Natural Gas as a transportation fuel, …

India, Cleantech and Cricket: 1.1 Billion People Can’t Be Ignored

David Cheng

A few weeks ago, my Facebook exploded at 4AM.  My South Asian friends from around the world descended upon my activity feed to cyber cheer on India during the 2011 Cricket World Cup Final (I unfortunately do not have any Sri Lankan friends to balance out the pro-India crowd).  While I was ignorant about cricket, I knew from my friends’ enthusiasm that this wasn’t just a game but also a declaration of India’s pride on an international scale.  This is something I know a bit about having cheered on Team USA in South Africa at the FIFA World Cup last summer.  So I did a little digging while the match was going on (even the One Day matches are long) and I soon got caught up in the spectacle of India’s historic run to become the World Cup champions.  That experience got me thinking about India’s run in energy and cleantech.  So I did a little digging and here is what I found.