UPDATED High-profile cleantech investor Vinod Khosla has made his first publicly announced bet in the wind industry, backing Danotek Motion Technologies, a designer and manufacturer of advanced electrical generators for wind turbines. Khosla’s venture firm Khosla Ventures led the $13.2 million round of funding for the Canton, Mich.-based startup, and according to the release, this marks the first investment for Khosla Ventures’ new “late-stage Venture Expansion Fund.”
CMEA Capital, Energy Capital Management and GE Energy Financial Services, the investment arm of General Electric also joined the round, which Danotek said will help it expand R&D, increase its staff and ramp up production of its generators. Scott Mabie, Danotek’s director of business development, told us the firm plans to produce about 1,000 generators next year and reach 4,000 units annually within three years.
Khosla, one of the most aggressive clean tech venture investors, has put money in at least 70 cleantech startups spanning a wide array of sectors including solar, water, batteries, engine efficiency, building materials and alternative fuels. But until now, he had not disclosed a direct position in the wind industry. (Update: A Khosla Ventures spokesperson has confirmed that the firm’s portfolio does not include any undisclosed investments in the wind sector, and this is in fact Khosla’s first wind play.)
Earlier this year, reports emerged that Khosla was raising $1 billion for two new funds that would largely invest in clean technology startups. Of the total, about $250 million was for a fund focused on early stage investing and the remainder — about $750 million – was to invest in later-stage ventures. Few details so far have emerged about these funds, and it appears the Venture Expansion Fund cited in the release is the later-stage fund from earlier reports. The Khosla spokesperson we spoke with said she could not confirm this point.
Danotek develops what are known as ”permanent magnetic generators,” which use high-powered magnets to convert the mechanical energy from spinning wind blades into electric power. This type of generator is not new and has been used in small applications, like home appliances, but only recently have engineers started looking to use it in large-scale power generation, Mabie said.
Danotek has added special cooling technology and other design features that the firm said have increased the generator’s efficiency at high and low wind speeds. The startup estimates its technology will enable wind turbines to harvest an average of 15 percent more energy than turbines currently on the market, providing about “$1 million in additional revenue over the life of the turbine,” according to a release. Danotek also said its generators are more reliable and less costly to maintain than conventional induction generators because they contain fewer “wear-and-tear” parts.
With this latest investment, Danotek has raised a total of $21 million in venture financing. It’s the second time GE Energy has invested in the firm, a notable vote of confidence from one of the world’s leading wind turbine manufacturers. In November last year, GE Energy, Statoil and CMEA invested $7.25 million in Danotek’s first round of funding.