Achates Power has raised $19.2 million in a second round of financing and brought in a new investor, Triangle Peak Partners, the company announced in recent days. The San Diego, Calif.-based startup, whose investors include Sequoia Capital, Rockport Capital Partners and other venture firms, is working on two-stroke diesel engine tech that it says will deliver higher efficiency and lower emissions at lower cost and higher power density (more power, less weight) than options currently on the market.
Founded in 2004, Achates said in a release that it’s now testing a 4.2 liter, 4-cylinder engine “that rivals conventional engines nearly twice its size.” This new funding comes a bit later and at a slightly smaller scale than once hoped: In June, CEO David Johnson told Cleantech Group that it was looking to raise $25 million by the third quarter of 2009.
Achates has competition from other startups in the race to secure venture capital and build a more efficient engine. For example, Khosla Ventures’ investment portfolio includes EcoMotors (working on a two-stroke diesel engine said to deliver fuel economy of 100 MPG) and Transonic Combustion, which is developing high efficiency combustion engines.
Achates said in a presentation about its business model last year that it plans to license its technology to big manufacturers and automakers, charging a $50 million fee plus 5 percent of revenue. Dain DeGroff, a founding partner at Triangle Peak who just joined Achates’ board, said in a statement today that his firm expects to help Achates grow by using its “technical background and finance experience,” as well as the startup’s investors and well-connected board, which includes Toyota North America’s former chairman.
Winning deals with big automakers won’t be easy for young companies with relatively unproven technologies. But cleaner diesel engines have a role to play in the next generation of vehicles on U.S. roads, and startups that are ready to license technology or sell plug-and-play components may be able to ride that wave.
Photo credit Achates Power