Summary:

Counting emissions accurately — from carbon dioxide to methane — in the air and soil has long been the domain of academia. But Silicon Valley startup Picarro is hoping to turn that practice into a booming commercial business by wooing the natural gas industry.

Picarro

Counting emissions accurately — from carbon dioxide to methane — in the air and soil has long been the domain of academia. But Silicon Valley startup Picarro is hoping to turn that practice into a booming commercial business by wooing the natural gas industry, and by ramping up business with a new round of $7 million.

The company wants to bring in industrial customers such as gas distribution companies and utilities — until recently, the company’s customers were mostly academic and government organizations, CEO Mike Woelk said in an interview. The company’s investors include Benchmark Capital, DAG Ventures, Focus Ventures and Mingxin China Growth Fund.

The U.S. has seen a boom in shale natural gas development, delivering cheap, domestic and abundant natural gas resources. But with that emergence has come thorny questions about the impact of natural gas development on nearby residents (both air and water), as well as the overall affect of natural gas electricity generation on greenhouse gas emissions. Natural gas is a fossil fuel, but is cleaner burning than coal for electricity.

The natural gas industry could be interested in buying natural gas detection equipment, like Picarro’s, to put next to pipelines, because leaking pipes can reduce both industry profits and could lead to disasters. In 2010, PG&E’s pipeline in San Bruno, south of San Francisco, exploded and killed eight people and hurt another 58.

PG&E has since spent billions of dollars to test and strengthen its gas pipelines. Woelk said leaks at a much smaller scale happen often throughout the country, but they don’t usually make national news. “I have a Google filter with natural gas (news) that I’ve stopped paying attention to – leaks happen at a fairly high frequency across the country. In aggregate, it’s a big issue,” Woelk said.

The analyzer

The company’s gas analyzer is the size of two desktop computers and it breathes in air to determine the content of a particular gas, say, methane, and sends that data to the cloud for processing. The instrument can detect molecules at one part per billion per second, a much more sensitive reading than equipment used by many gas utilities, Woelk said. Instead of being a handheld system that a utility worker would use to survey on foot, Picarro’s analyzer could be driven around in a car and cover more areas quickly, he added.

Picarro’s technology is based on its own patents and those it licensed from Stanford University. Many of its customers are research institutions, including Harvard University, Beijing University, the National Oceanic and Atmospheric Administration and China Meteorological Agency. Picarro has sold instruments to businesses as well, including PG&E, Waste Management and Rio Tinto Alcan.

The academic world is usually a niche market for scientific instrument makers because research institutions don’t typically need to buy expensive lab equipment in large quantities. Picarro prices its analyzers from $50,000 to $130,000. For industrial customers, however, the company wants to sell both equipment and data processing and access services. It’s negotiating such service contracts with some gas companies, but Woelk declined to disclose their names.

Before the latest, $7 million round, the company had raised $44 million in private equity. Picarro has changed its business model a few times since its initial founding in 1998. It wanted to sell breath diagnostic tools initially, but that didn’t take off. Then it went into the laser equipment business to serve the telecom industry, and that didn’t work well either.

In 2007, it focused on developing gas analyzers and hired Woelk as its CEO. The company has about 90 full time employees and sale offices in Beijing and The Hague. It manufactures its products at its headquarters in Santa Clara.

Photo courtesy of Picarro

Comments have been disabled for this post