The most recent generation of entrepreneurs was raised in the era of recycling, electric cars and Al Gore’s An Inconvenient Truth, so it is no surprise that lots of are starting companies to combat global warming.
ON THE PLANET Day, it’s a great time to check out a crop of promising green startups. Some are centered on specific niches, such as for example clean fuels and efficient electronics manufacturing, while some are going for a consumer-focused approach, providing easy-to-use tools to greatly help everyone make green choices. Even in a challenging capital-raising environment for green companies (more on that later), these young companies are gaining the support of venture capitalists.
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Plano, Texas-based Choose Energy, for instance, announced on March 26 that it raised $4 million to expand its online platform, that allows consumers and smaller businesses to look for energy plans predicated on various factors, including how green the providers are. "About 40 percent of our customers choose wind power," says founder and CEO Jerry Dyess. "Lots of people think it’s more costly, however in most cases, you can spend less by switching to a completely green product."
Choose Energy, that was founded in 2008, operates in four states where energy is deregulated–meaning consumers can choose among different providers–and has plans to expand its services nationwide, Dyess says. The business can be developing technology for energy providers to use in customer acquisition and support. The recent fundraising, led by Kleiner Perkins Caufield & Byers and Stephens Capital Partners, can help support Choose Energy’s new satellite office in SAN FRANCISCO BAY AREA.
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Arctic Sand, that was spun from the Massachusetts Institute of Technology in 2011, is attacking a different side of the global-warming problem: heat loss from gizmos such as for example mobile phones and set-top boxes. Nadia Shalaby, CEO and co-founder of Arctic Sand, says the conversion of power in one form to another–say from AC to DC–inside the unit is normally a seven-part process, and that heat escapes during each step. The business has developed a fresh kind of semiconductor to shorten that process, thus reducing heat loss.
"About 80 percent of most energy generated worldwide is lost by means of heat," Shalaby says. "It’s a sad statistic, but one we’re able to change by investing to create power conversion better." Shalaby estimates that if Arctic Sand’s products were widely adopted, they could save seven million a great deal of skin tightening and emissions a year.
Despite the fact that Arctic Sand is greater than a year from introducing its first product, the Cambridge, Mass.-based company has recently caught the attention of the capital raising community: It raised $9.6 million late this past year from a syndicate of investors that included Arsenal Venture Partners and Dialog Semiconductor.
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U.S. Secretary of Energy Steven Chu (left) advises NuMat Technologies founders Omar Farha (center) and Benjamin Hernandez (right) at the 2012 National Clean Energy Business Plan Competition.
Image credit: NuMat Technologies
Another college spinout–NuMat Technologies, born at Evanston, Ill.-based Northwestern University in 2012–is garnering kudos for a technology it developed for storing natural gases, such as for example methane. The business developed porous materials which you can use to line natural-gas tanks, for instance, in cars. Storage of gas is so challenging that lots of experts believe it’s a significant deterrent for the widespread adoption of clean-energy solutions. That is the problem NuMat attempt to solve. "What these materials enable you to do is to store natural gases at lower pressure. Which makes the tanks cheaper and safer," says Omar Farha, NuMat’s chief scientific officer.
NuMat has raised a lot more than $1 million in prize money, including a first-place showing at the 2012 Clean Energy Business Plan Competition, run by the U.S. Department of Energy. Farha says taking part in business-plan contests not merely exposed the startup to potential funding sources, but also provided much-needed feedback on NuMat’s strategy. "The Secretary of Energy Steven Chu was brilliant. He talked to us scientifically about the advantages and disadvantages of our approach," Farha says. NuMat hopes to close a $2 million funding round soon.
Farha and other green entrepreneurs will face a lot of obstacles, though, not minimal which is that VC buying the area is apparently on a downward trend. In 2012, total venture dollars committed to clean tech startups dropped a lot more than thirty percent to $6.46 billion, according to SAN FRANCISCO BAY AREA based consultancy the Cleantech Group, which cited various factors for the drop, including an unhealthy IPO market for green companies and a hard pricing environment for alternative fuels.
Yet, such blips are not deterring this new generation of green entrepreneurs. "Like the rest there’s a gold-rush mentality initially, you then shake out the winners and losers," says Jay Webster, who was simply recruited by VC firm Kleiner Perkins to serve as president of Choose Energy and run the business’s new SAN FRANCISCO BAY AREA office. "There continues to be so much possibility to spend money on improving energy generation, distribution, and consumption. Money should come back in–it will you need to be more carefully applied."