What’s Hot in Cleantech, Including a Possible Agilyx IPO and a New Russian Fund

Cleantech is out of favor. Sure, Nuventix just raised another $6.9 million, and Accel this week put $6.7 million into Vigilent, with the help of several angels. But even as startups such as BrightSource Energy appear to press ahead with IPOs, Enphase Energy this morning cut the expected price of its offering to between $6 and $7 a share. It had anticipated $10 to $12.

The enthusiasm among many private and public market investors has waned, curtailed by the perception that making money with green companies is difficult.

In this uncertain environment, a group of dedicated venture investors keeps the faith. As we have heard time and again, they shy away from capital-intensive initiatives, solar company scale ups, for instance. Instead they favor business plans that put information technology to work or that serve industries seeking greater energy efficiency and less waste.

We had the chance to speak with several at the Cleantech Forum this week in San Francisco. Here are some of their observations.

  • Long time cleantech investor Paul Straub, a director at Claremont Creek Ventures, says he is most intrigued these days by IT driven opportunities that use data and analytics to improve energy efficiency.

One example is the application of software and services to micro grids, where technology can better manage buildings and energy sources. Applications that bring data and analytics to building and fleet management also are interesting, he says.

  • Chrysalix Energy Venture Capital CEO Wal van Lierop says he is preparing a new round for portfolio company GlassPoint, which houses solar mirrors in protective glass houses to generate steam for oil recovery. The round will go fast, he says.

But his interest goes as well to technologies aimed at cleaning up existing industries. Shale gas extraction is one industry. Mining is another. Think of membranes for treating wastewater, or products used for well construction. “This is definitely a place where startups can play,” he says.

Carbon dioxide capture is another area of focus, as are advanced materials, such as carbon nanotubes and composites. The storage of hydrogen in carbon nanotubes could be safe and feasible for the transportation industry. “We see significant breakthroughs in carbon nanotubes,” says van Lierop.

Van Lierop suggests that an IPO from portfolio company Agilyx is possible in the waste-to-energy space. The company should be on its way to a public markets offering later this year, financial markets permitting, he says.

  • From his office in Germany, Jochen Wermuth, chief investment officer at Wermuth Asset Management, has raised a 110 million Euro ($146 million) cleantech fund: the Tatarstan Clean Tech Fund. The fund intends to invest in European and U.S companies that want to expand to the Russian market, and counts the Republic of Tatarstan’s sovereign wealth fund as its top LP.

Wermuth targets another 140 million Euros. He says the fund targets expansion stage companies past the proof of concept with technologies that are deployable, not necessarily cutting edge.

A first deal is with the Danish company BEHR, which has plastic covers for open-case supermarket refrigerators. Wermuth says energy efficiency, such as insulation and construction materials, are attractive investments. So is energy storage, including software for grid optimization and electric car batteries. He is intrigued by waste-to-energy technologies.

  • Electric car technology remains a focus for Michael Tinskey, director of vehicle electrification at Ford. He says several aspects of owning and operating an electric car are ripe for small company innovation. One area is wireless, or inductive, charging, eliminating the need for a driver to physically plug in an electric car. “That’s going to be an emerging space” and one where a number of standards are needed, he says.

A second place to turn for innovation is the fast-charging and two-way electric vehicle-to-electric grid communications. Standards are evolving for the necessary fast-charge connector, but software and systems for bi-directional linking to the grid is an opportunity. Imagine turning a car into an energy source at a campsite or at home. “That to me is going to be a very interesting place,” he says.

There are not a lot of companies working in the space but room for creativity. What about software that can read a car owner’s calendar and schedule recharging around five hours of office meetings, enabling the car to sell power to the grid when energy is higher priced, he asks.

“VCs in the cleantech space have to learn how to make money,” says van Lierop. “It’s a hard road.” Maybe also a lucrative one.