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Summary:

The acquisition of solar startup Miasole by China’s Hanergy is the latest example of large Chinese conglomerates acquiring promising U.S.-born clean technology on the cheap. Miasole was sold for $30M, despite raising hundreds of millions of dollars.

MiaSole made the solar panels.

And the trend of Chinese companies buying up struggling green tech startups on the cheap continues. This weekend it was revealed that Chinese renewable power company Hanergy will buy up thin film solar startup Miasole, for a paltry $30 million.

Miasole had raised at least $500 million dollars to try to scale up its manufacturing, but investors will likely got nothing in the deal, despite their years of investment (though Miasole’s execs will get multi-million dollar bonuses). Miasole’s investors include Kleiner Perkins, VantagePoint Venture Partners, Bessemer Venture Partners, Firelake Capital and Passport Capital.

Miasole still needed more funding to scale up its manufacturing, and was desperate for a white knight to rescue it from oblivion. Those types of desperate circumstances make greentech startups, with potentially promising technologies, easy pickings for Chinese companies with large balance sheets.

Chinese conglomerate Wanxiang invested in, and could eventually acquire 80 percent of struggling lithium ion battery maker A123 Systems. A123 had been bleeding cash for months, and Pin Ni, the President of Wanxiang America, told me that despite A123’s struggles, it has one of the leading battery technologies.

Wanxiang, China’s largest industrial parts company with $13 billion in revenue and 45,000 employees, has also invested $420 million into GreatPoint Energy, a company based in Cambridge, Mass. that converts coal into cleaner-burning natural gas. Ni told me that GreatPoint’s technology showed great promise, but “economically they were finished in the U.S. The shareholders had decided to not give the company any more money.”

Ni told me that Wanxiang isn’t necessarily looking for undervalued and under performing cleantech startups. But in reality, it’s clear to me that those are the most attractive acquisitions and investments for any company. Chinese power companies across the board are no doubt eying struggling clean tech companies to see how much value their technology has, and how good of a deal they can get.

I think history will be on the side of these Chinese investors that have the funds and are willing to take a long term view of cultivating these technologies. Miasole had its ups and downs, but many people believed that their thin film solar technology was one of the leading ones. Months ago it was making solar panels at an average efficiency of 14 percent, which is higher than what its rivals such as Nanosolar, Stion, HelioVolt.

But there are downsides to this ecosystem. First, a lot of tech innovation that was built in the U.S. and Silicon Valley, won’t stay in the U.S. And secondly, the venture investors that put substantial money into these companies, are losing those investments, and thus will likely be putting less money into clean tech generation companies in the future.

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  1. “I think history will be on the side of these Chinese investors that have the funds and are willing to take a long term view of cultivating these technologies.” – go ask the Japanese what happened to their purchases of the 80s and early 90s in the US – I bet you that they would have a different opinion about this statement – its never about the technology – it is always about the business – when the time comes the US will lead with renewable energy technology – China will keep looking on and ofcourse copying!

    1. Katie Fehrenbacher nd Monday, October 1, 2012

      I hope so.

  2. Mark Blackwell Monday, October 1, 2012

    Reblogged this on e3 Innovation..

  3. Albert Hartman Tuesday, October 2, 2012

    A decade ago they invested in and eventually cornered the market on Neodymium magnets – those critical components for all modern high efficiency motors. After they got 95% market share, the price jumped up 10X, since they preferred to sell finished goods rather than magnet components. PV solar may go the same way.

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