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Summary:

Innovation in energy and transportation is still emerging from the startup world, it’s just quieter and mostly not coming from the VC community.

Achates Power Raises $19.2M for Efficient Engines

Just don’t call it cleantech — that term has morphed into a dirty word for venture capitalists and the limited partners that put money into VC funds. But Valley leader Sequoia Capital has quietly been investing in a decent number of energy, transportation and resource-focused startups that were once considered part of the cleantech sector throughout 2013.

More recent Sequoia Capital moves in energy transportation include joining another funding round for efficient engine startup Achates Power, which closed on a $35.2 million Series C round this week, and backing a stealthy robotic solar startup called Alion Energy, first reported by the New York Times this week. “Energy” is one of six verticals that Sequoia Capital highlights on its website.

Over the last few years Sequoia has actually had one of the better batting averages in cleantech, despite the fact that the firm has done a much more modest amount of investments compared to more aggressive firms like Kleiner Perkins, NEA, and Khosla Ventures. Sequoia has backed battery company A123 Systems (which went public in 2009), as well as eMeter, an energy software startup that was acquired by Siemens in late 2011.

As a significant portion of the venture investors have cooled off from backing “cleantech,” some of the firms that like to zig when everyone else is zagging could see this space as a newer opportunity. Peter Thiel, a long-time contrary investor, has made some of these newer bets, backing companies like LightSail Energy and also putting money into a growth infrastructure fund Mithril Capital Management (which tackles energy among other things). Bill Gates has upped his investments in new battery tech and other energy innovations, too, though he hasn’t been quiet about how hard energy investing is.

While Sequoia may be the rare breed of venture fund that has slowly and steadily been picking and choosing some of the standout bets in energy and transportation, startups are now increasingly looking to corporate investors for more funding. Silicon solar wafer startup 1366 Technologies just closed a $15 million round from Japanese silicon giant Tokuyama Corp. and energy data startup EcoFactor recently raised funding from new power industry investor NRG Energy.

  1. These Sequoia investments, including Alion, are all follow-on rounds to investments they made back when cleantech was still cool. This is just them trying to protect their investments and squeeze some returns out of cleantech. It is definitely not a commitment to the space. You will not see them backing any new deals that are not clearly “cleanweb” focused, if even that.

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  2. How will Peter Thiel tie this fund to his N-fund? Is that decided yet?

    http://fakevalley.com/peter-thiel-announces-new-fund-to-invest-in-newborns/

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  3. Bullshit: I remember having presented projects to them and other investors in the bay area and found pure *hatred* to our technology and where it comes from.

    Even though the technology and model are tried and true and easy to demonstrate.

    So they are not really in for the money, for mostly for their egoes.

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