The Department of Energy’s program to fund high-risk, early-stage, greentech projects is working, the DOE basically says in a release this week. The indicator, says the DOE, is that private investors have backed at least six companies — which were awarded a combined $23.6 million in grants from ARPA-E — with a total of $100 million. DOE Chief Steven Chu said the amount of follow-on private funding for these companies “indicates that the business community is hungry to invest in truly innovative solutions to the country’s energy challenges.”
At the same time, a lot of these winners were companies that had a small amount of private funding from investors before the ARPA-E award, so naturally these firms had an easier time raising funding after the ARPA-E grant compared to some other early-stage ventures. At the ARPA-E summit I attended last year, there were hundreds of really early-stage, unfunded companies that didn’t make the cut. We’ve covered all of these six companies at length, so I’ll break them down for you below:
1. Envia. Envia develops low-cost cathode materials for vehicle lithium-ion batteries and other energy storage applications, and the company is also expanding its focus to include anode technology. A battery is made up of an anode on one side and a cathode on the other, with electrolyte in between. Lithium ions travel from the anode to the cathode through the electrolyte, creating a chemical reaction that allows electrons to be harvested along the way.
Envia recently raised $17 million from investors including GM Ventures, Asahi Kasei, Asahi Glass, Bay Partners, Redpoint and Panagea Ventures. GM says it has also secured the rights to use Envia’s cathode materials for future GM vehicles. Envia, which was founded in 2007, snagged a first-round $4 million grant from ARPA-E, raised a $3.2 million first round of financing in 2008, and by September of 2009, a regulatory filing indicates Envia raised the bulk of another $7.7 million Series B round.
2. 1366 Technologies. The aim behind 1366 Technologies, a company founded on research from MIT Professor Ely Sachs, is to develop manufacturing innovations to improve the process and slash the costs of producing silicon wafers for solar panels. The company has built a technology that producers wafers directly from molten silicon, which is akin to making sheets of glass, and the company says its process can cut manufacturing costs by as much as 80 percent.
The Lexington, Mass.-based startup, which was founded in 2007, used a $4 million grant from the federal ARPA-E program in 2009, and raised $20 million in late 2010 to take its new technology out of the lab and into the factory. Investors include Polaris, North Bridge Venture Partners, Hanwha Chemical, and Ventizz Capital Fund. The company has raised $37.55 million since its inception.
3. FloDesign Wind Turbine. FloDesign is developing a “high-efficiency shrouded” wind turbine that draws inspiration from the aerospace industry. The “shrouded” design is a cage-like enclosure commonly used with jet engines (the image is a rendition supplied by FloDesign), as opposed to conventional turbines that use long blades. The shrouds work off the concept that air moving through a hole will gain speed because of differences in air pressure.
FloDesign Wind believes its design will be able to extract 3-4 times more energy from the wind than current technologies, according to this YouTube video. The spokesperson told us this would lead to turbines that are more efficient and less costly than competing products on the market today. The company has raised money from Kleiner Perkins (its first $6 million round) as well as Goldman Sachs, Technology Partners, and VantagePoint Venture Partners. Founded in 2007, FloDesign secured a $8.3 million grant from ARPA-E.
4. Sun Catalytix. Sun Catalytix was created to commercialize research from MIT Professor Dan Nocera, and the idea is to use an intermittent source of energy, such as solar power, to split water into hydrogen and oxygen via electrolysis. When the energy is needed, the hydrogen and oxygen can either be recombined to produce electricity, such as with a fuel cell, or the hydrogen can potentially be converted into a liquid fuel, like ammonia, and used to power vehicles. Sun Catalytix investor Bob Metcalfe told us last year that Sun Catalytix hadn’t yet decided whether its ultimate product will be electricity or fuel.
If Sun Catalytix’s energy storage technology is successful, it could help spur the deployment of renewable energy. Solar and wind power are intermittent, meaning the sun doesn’t always shine and the wind doesn’t always blow, and these events can’t be controlled according to electricity demand. Energy storage has long been considered the Holy Grail for enabling large amounts of distributed renewable-power projects. Sun Catalytix, won $4 million from ARPA-E, raised $3 million in seed funding from Polaris, and raised a $9.58 million round in late 2010.
5. 24M. 24M, which stands for the material concentration 24 molar, was spun out of lithium-ion battery company A123 Systems in mid-2010, and has plans to work on advanced non-traditional lithium-ion based storage technology. 24M raised $10 million in Series A funding from Charles River Ventures and North Bridge Venture Partners, and won a $6 million grant from ARPA-E.
The company has plans to work on a system for vehicles and grid storage that combine aspects of lithium-ion batteries and flow battery technology. 24M’s work is being led by Yet-Ming Chiang, a professor at MIT and founder of A123 Systems, and Chiang tells MIT Tech Review that he’s using a “semisolid” energy storage material, compared to the traditional use of solid materials. A123 said it expects to see 24M’s low-cost energy storage technology deployed toward the “latter part of decade.”
6. General Compression. General Compression has come up with an effective way to use compressed air for energy storage without burning natural gas: Its “GCAES” units use isothermal compression and expansion to generate power without burning any fuel. The company claims its 2-megawatt modular units can store power at 70-75 percent round-trip efficiency, and because the units can respond in less than 30 seconds and cycle between compression and expansion quickly, they can be used to back up wind farm power output, which is the company’s main focus. The company plans to start building its first commercial project in early 2011.
For more research on cleantech financing check out GigaOM Pro (subscription required):
- Cleantech Financing Trends 2010 & Beyond
- Report: IT Opportunities in Electric Vehicle Management
- Car Data As the Next Platform for Innovation