cleantech
cleantech insights

Oil & Gas Industry’s Embrace of Clean Technology – Catching Up with Jean-Michel Gires of Chrysalix

TroyAult

The majority perception of the term “cleantech” dictates that folks often think my company, Cleantech Group, must be entirely uninterested in working with large traditional players in the oil & gas (O&G) industry. Indeed, this couldn’t be further from the truth. In fact, our data from i3 and my interview with Jean-Michel Gires, former President & CEO of Total E&P Canada and now the newest Venture Partner at Chrysalix Energy Venture Capital, reveal that the O&G industry is embracing clean technology more closely than ever before.

O&G Corporates Partnering with Proven Innovators

Cleantech start-ups often have it tough. Those developing technologies that require more capital and time to scale than traditional “tech” startups lead some investors to argue that the sector just doesn’t fit the traditional venture capital model. And, like biomedical start-ups, some cleantech start-ups often face highly-regulated or otherwise-entrenched traditional industries where innovation is slower to take root.

It is with this backdrop that we see large O&G companies as important drivers of cleantech innovation. Large balance sheets allow for impactful investments and we’re seeing more and more O&G majors starting to embrace innovation more directly with dedicated venturing arms and co-investments with industry peers (see chart at …

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To Do China Right, Enjoy the Food: 12 Gems For Growing Your Business in China

Josh Seidenfeld

Last Friday, Cleantech Group, Silicon Valley Bank, and Wilson Sonsini Goodrich & Rosati convened an intimate group including investors (Dow Venture Capital, Keytone Ventures, Khosla Ventures, The Westly Group), corporate innovation leaders (ABB, Applied Materials, Siemens), and startups (Efficiency Exchange, Gridium, NexSteppe, Scoot Networks) for a Power Breakfast focused on strategies for working in China. A panel of investors, bankers, attorneys, and startup CEOs with deep experience working in China led the conversation, moderated by Cleantech Group’s CEO, Sheeraz Haji (see a couple interesting slides from Sheeraz’ presentation at the end of the post.)

We promised not to attribute quotes so participants would feel more comfortable speaking their minds, but here are a dozen highlights from the experts:

  1. Enjoy the food. Personal connections drive business in China. One panelist mused, “Once you start enjoying food with people you really start to get to know one another.”
  2. Wear the mandarin hat. One seasoned investor recalled how he was advised to make clear to Chinese counterparts “what’s in it for them.” But, he added, the euphemism “wear the mandarin hat” sounds better. The need to align partnerships

“Don’t-call-it-cleantech” cleantech investors

Greg Neichin

One of last quarter’s highest profile cleantech deals, agriculture optimization software developer Solum’s $17M round of financing, was led by an investor that apparently was not interested in doing cleantech deals. Andreessen Horowitz, a firm closely associated with consumer internet hits such as Twitter, Skype, Zynga, and GroupOn, led the round with Kleiner Perkins.  This after firm founder Marc Andreessen had previously declared that the fund would not be investing in “cleantech”.

Last week’s latest addition to the camp of cleantech investors who swear that they don’t invest in cleantech is Index Ventures.  Back in June, the firm closed on a new $440M fund.  In an interview with Fortune, Index Partner Mike Volpi declared, “We looked at a lot of [cleantech] deals but didn’t think that many had the same potential as tech deals, because they relied too much on subsidies. We did a couple, including a tire recycling company, but I wouldn’t say that it’s still a focus.”

It may not be a focus, but last week Index put more cleantech money into that “tire recycling company”, otherwise known as Lehigh Technologies as the company raised $16M from Index, Kleiner Perkins, Leaf Clean Energy, and others.

In April, GigaOM …

Something Has to ‘Give’ in European cleantech M&A

Richard Youngman

This week, one year ago, it was announced that ABB had acquired Epyon, a developer of fast-charging technology for electric vehicles.  Following on from BASF’s acquisition of Inge, Alinda’s acquisition of agri.capital and  Samsung’s of Liquavista, the M&A wave of venture-backed European cleantech companies we’d all been waiting for seemed to be happening. A year on – we are still waiting. It proved a false dawn, but surely, actually, some kind of a postponed dawn.

We have spent some weeks, with Richard Cave-Bigley as our project lead, analysing the state of the market and discussing this stand-off between potential buyers and sellers with many corporate representatives (in both M&A and venturing teams), venture firms, Limited Partners, and other market agents (such as lawyers, brokers and corporate finance advisors).

Here are some of our key impressions, detailed in a fuller research report we have released to our i3 subscribers today:

Something has to give soon (the title of the report). Many cleantech venture funds, with 2005-2007 vintages are in their divestment periods, with many more following on close behind. Such fund managers are trying to strike a delicate balance. On the one hand, they wish to time exits …

Riding the solar coaster – a free mini-report from Cleantech Group

Whitney Michael

Just released – a special excerpt on Solar from Cleantech Group’s Quarterly Investment Monitor report (normally available only to subscribers).

Venture investment in solar in the first quarter of 2012 was down following on the back of a strong 2011. Companies innovating in various areas of the solar sector raised $250 million in the first quarter, down 53 percent from the previous quarter and down 56 percent when compared with the same quarter a year earlier. While the total amount invested dropped steeply, the number of deals done remained relatively strong at 28 (right near the long-running sweet spot for the sector of 30 deals per quarter).

This suggests investors are both cautious about market conditions and capital-constrained and are choosing more efficient fund allocation while still keeping an appetite for deals. The average round sizes for both the quarter as a whole and the top three deals were also down around 50 percent compared with the quarterly averages for 2011.

SolarCity’s $81 million round, the biggest round of the quarter for the solar sector, drove the large dollar share for the segment. In addition to SolarCity’s round, other PV integrators/developers including SungevityOneRoof EnergyISIS Solar

Financing Growth for cleantech companies: learning from the pioneers

Richard Youngman

In April, at Cleantech Forum Europe in Munich, I had the pleasure of moderating a panel on this subject, where we discussed some recent and current company case studies, to draw out the very real financing challenges facing growing cleantech companies and some of the possible solutions.

One of my original invitees, Richard McCombs, was unable to be with us that day, but I recently caught up with him and this inspired this interview-style blog post. Richard recently retired as CEO of MBA Polymers. Through that lens we discussed the financing challenges for growth companies with newer technologies, to draw out some tips for the future.

Richard Youngman (RY): MBA Polymers is the global leader in recycling plastics from end-of-life electronics, appliances and automobiles. What has been your experience in financing its growth journey?

Richard McCombs (RMc):  When we prepared to build our first commercial scale facility, we realized that we could not meet venture capitalists’ expected returns if we built our facilities with 100% MBA equity.  Our first facility was in China. So we structured it as a joint venture with MBA owning >50% and having full management control. We also negotiated that our partner would …

The Quarter That Was: Outsourced Reflection

Greg Neichin

Given the pace at which the business world moves these days, there is often not enough time for thoughtful reflection.  It can be all too easy to get lost in last week’s meetings and next week’s deadlines and to completely miss the forest for the trees.  With the amount of information that we all try to consume on a daily basis, it is easy to mistake a headline for a trend, hyperbole for fact.

Luckily, that’s where we come in.  Consider us your “Outsourced Reflection”.  Every quarter, for the past 7 years, we have published a comprehensive quarterly manifesto – Cleantech Group’s Quarterly Investment Monitor.  Frankly, I think that this exercise is more important than ever.  As we wrote in opening this edition:

2012 has started on a similar note [to the end of 2011] with a rising number of cleantech companies funded despite a continuing public and media fascination with the sector’s high profile failures. In responding to erroneous press accounts of his own death, noted American author Mark Twain once wrote, “the reports of my death are greatly exaggerated.” The same could be said of cleantech.

If all you read in the last three months was news of …

What is Innovation? And Why The Question Matters.

Greg Neichin

What types of “innovation” should markets and society value?

What types of products, services, and businesses can justifiably be labeled as “innovation”?

I mindlessly use the word “innovation” tens of times every single day without pausing enough to ponder these fundamental questions.  Heck, I’ve helped architect a product called i3 for “insight into innovation”, regularly assist clients build “innovation sourcing” teams, and help host a conference with an “innovation showcase” (don’t forget to join us in San Francisco on March 26-28th!).  I really should have a thoughtful opinion here.

On one hand, having spent most of my career as an entrepreneur, I think that there is a fair argument to be made that the answer to the question, “what is innovation?” should be “who cares about semantics!”  Let’s go out and build new stuff.  If it replaces the old stuff, makes for a profitable business, and nets a good return for investors, we can call it whatever we want.

On the other hand, I think we, especially in some corners of the U.S. entrepreneurial community, have forgotten what innovation truly looks like.  Jon Gertner presents his case for a definition of “innovation” in this …

2011 Investment Monitor Report Released

Whitney Michael

Cleantech Group’s final report on Cleantech investment for 2011 was released yesterday to i3 subscribers.

2011 VC investment in cleantech began the year strong and maintained momentum.  2011 is the first year in our decade of tracking that all four quarters exceeded $2 billion in cleantech venture investment.

Early stage deal count went flat, as investors focused more on re-investing their portfolio companies that are in need of capital for growth.  And while  bankruptcy filings of Solyndra and others raised questions, in the end they did not affect investors’ appetite for cleantech, as total VC investments hit $2.21 billion in 4Q11 to close out the year strong.

i3 subscribers can read the full 86-page report.  Contact us to learn more about a research subscription and the i3 platform.

 …

Trends for 2012: no cleantech-pocalypse?

Sheeraz Haji

The cleantech boom went bust! Solar is dead. Climate change is a hoax. We have all heard the doom and gloom. If you only read these sensationalist headlines you might think cleantech is dead.

Don’t believe the hype! Cleantech did not implode. While 2011 was a challenging year for cleantech, the industry continued to grow and there’s plenty to look forward to in 2012. With all the noise, you might not have realized how quickly solar installations are growing around the globe. For example, in the US solar installations grew more than 65% year-over-year. National and local governments are embracing cleantech like never before as they search for ways to stimulate their economies.  Even though a number of venture funds have struggled, we saw global cleantech venture flows grow 14% to $9 billion last year.

Global enterprises invested in cleantech at record levels: Last year we tracked $41 billion in global M&A transactions in cleantech, up 153% from 2010. Big corporations from every industry and from across the globe are evolving sustainability programs into growth-oriented strategies to source cleantech innovation.  French enterprises have led the way. Some groups have pursued an acquisition strategy: Schneider Electric, for example, made eight …