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10 ways Chinese investors are dominating cleantech

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You’ve heard it off and on throughout 2011 and 2012: Chinese investors and the Chinese government are starting to aggressively fund U.S.-based cleantech startups from electric vehicle companies to clean power developers. There’s been a half dozen of these deals in recent weeks and months, so I thought I’d put together this list to point out the 10 big ones I’ve noticed:

1). GreatPoint Energy and China Wanxiang Holdings: At one point GreatPoint Energy, a company that converts coal into cleaner-burning natural gas, had an investor list that was led by the who’s who of Silicon Valley’s greentech ambitions, including Kleiner Perkins, Advanced Technology Ventures, Draper Fisher Jurvetson, and Khosla Ventures. But according to DowJones Venture Wire last week, GreatPoint Energy has now developed a $1.25 billion partnership with industrial parts supplier China Wanxiang Holdings, including a $420 million Series D equity investment.

The article calls the deal “the largest ever by a Chinese corporation into a venture-capital-funded U.S. company.” GreatPoint Energy will use the money partly to build a large-scale plant in China to convert coal into natural gas using GreatPoint’s process called hydromethanation.

2). Smith Electric Vehicles and Wanxiang Group: GreatPoint Energy isn’t the only one that’s teamed up with Wanxiang. I reported last week that electric car company Smith Electric Vehicles is in the process of raising $40 million from private investors. And days after that article, Smith announced that Wanxiang Group has signed a letter of intent for a $25 million equity investment into Smith and an up to a $75 million investment in a JV between Smith and Wanxiang to make electric school buses and commercial vehicles.

Smith filed for an IPO in November 2011. The company sells electric trucks and vans for companies’ fleet operations and counts customers like Coca-Cola, Fed-Ex, Staples, and Sainsburys, as well as the military.

3). Bridgelux and Kaistar: California-based LED lighting startup Bridgelux announced last week that it’s getting $25 million from Kaistar, a joint venture between two public Chinese companies, Epistar and Kaifa. Bridgelux plans to use the funds for research, development and manufacturing of LED chips and packaging for light fixtures.

Bridgelux had already raised a massive $220 million in private funding and in previous years Bridgelux was on the short list for an IPO.

4). LanzaTech and Chinese steel and coal companies: LanzaTech uses microbes and fermentation to convert the carbon monoxide from waste gas from industrial operations and other sources into biofuels and chemicals. Founded in 2005, LanzaTech originally hailed from New Zealand and in recent years has started building demonstration projects in China.

LanzaTech is already working with two Chinese steel manufacturers – Baosteel and Capital Steel — to turn waste gas from their operations into ethanol. LanzaTech said it has installed equipment for a demonstration plant at Baosteel and plans to start production later this year. Last November, the biofuel company also announced a plan to work with a large Chinese coal producer – Yankuang Group — to produce fuels and chemicals from synthesis gas produced by Yankuang’s gasification equipment.

5). PowerGenix and China City Construction Corps: San Diego-based PowerGenix spent the past year hunting for a partner in China and announced in January that it’s forming a joint venture with China City Construction Corp. to produce its nickel-zinc batteries for the so-called microhybrid vehicles. By the end of this year, the joint venture, called CCCC-PowerGenix Clean Energy Co., plans to set up a factory to produce 400,000 batteries per year, or 200,000 watt-hours total.

6). TerraPower and the Chinese government: Nuclear startup TerraPower doesn’t have an official deal to build a reactor with China’s National Nuclear Corporation (despite media reports), but TerraPower investor Bill Gates (yes that Bill Gates) says that TerraPower is having preliminary discussions with the Chinese government over its nuclear tech.

TerraPower is developing nuclear traveling wave reactor technology, which is a relatively new type of small nuclear reactor design that can use the waste byproduct of the enrichment process, or waste uranium, for fuel. TerraPower’s backers have long said it will likely commercialize its technology first outside the U.S.

7). Brammo and the Hong Kong government: Electric motorcycle maker Brammo says it’s scored a deal to supply the Hong Kong government and police force with its electric motorcycles. Brammo says the Hong Kong government will replace its existing gas-powered motorcycle fleet with Brammo’s Enertia.

Hong Kong’s Water Supplies Department will use the Enertia Plus, while the Hong Kong police department will use the 2012 Enertia Plus “LE,” or the Law Enforcement edition, which has features for police. Brammo’s exclusive dealer in Hong Kong is JCAM Advanced Mobility Company.

8). Silevo and Chinese venture firms: California startup Silevo is building a hybrid solar cell design that uses single-crystal silicon as the base layer on which it adds a “tunneling oxide layer” and a layer of amorphous silicon to alter the voltage and current of the cells. Silevo raised $55 million in venture capital from investors, including three China-based firms: DT Capital (affiliated with Madrone Capital),  NewMargin Ventures, and GSR Ventures (connected to Mayfield Fund).

Silevo is in the process of building a 30 MW factory in Hangzhou, China, and expects to bring the factory into full production mode during the first quarter of 2012. The company plans to add another 200 MW in 2013 if demand is there.

9). Boston-Power and the Chinese government: Boston-Power, a lithium-ion battery maker, raised $125 million in venture capital and Chinese government incentives to move its manufacturing base to China. Boston-Power plans to build a lithium-ion battery cell factory near Shanghai and a technology center in Beijing where its staff will work with customers to integrate Boston-Power’s cells into electric drivetrains.

10). Sunpreme and Chinese investors: Solar cell maker Sunpreme raised roughly $50 million in a series B round to build a factory in Jiaxing, China. Investors include International Finance Corp. (part of the World Bank Group), Capricorn Investment Group and China Environmental Fund III (managed by Tsing Capital in China).

Images courtesy of Boston-Power, Silevo, Dainis Matisons, PowerGenix, Bridgelux, Smith Electric Vehicles and GreatPoint Energy.

8 Responses to “10 ways Chinese investors are dominating cleantech”

  1. Excellent report on joint Chinese US initiatives in conserving power and utilizing by-products effectively. Countries like India need to note and follow up such initiatives in their own interest.
    Narendra Nath

  2. Brian Leez

    WOW, it’s great that U.S. Companies are going to be the suppliers, but man are we behind. China, as a country, is building an energy infrastructure that will be low maintenance and will last generations.
    China is planning for the long-term, what are we planning for?

  3. Andrew, They are going to need a ton of power, more than even the available supply of fossil fuels (same with India), and also technologies like solar and wind can make money and be cost effective at large scale and over the life of the systems (the supply itself is free). Also most countries recognize that climate change is a threat — it’s only a debate in the U.S.

  4. Andrew Jones


    So why are Chinese companies investing so heavily in Green Tech? Is it because they are going to need a lot of power as the country develops, and green is/will be cheaper? Or are they seriously worried about Climate Change, maybe because of flooding in some parts of the country?

    • Andrew
      Years ago the Wall Street Journal ran a piece pointing out that it doesn’t matter if one believes in climate change — the fact that a significant segment of consumers do is reason enough to invest in green tech to be in on it. Sadly, many of our political leaders would rather make a point about personal beliefs and hand the new economy to other countries.

    • Louis has a point, but a better one is cost of available power. China does not have the coal resources of the USA or Australia. They are already buying coal from both and oil from Canada oil sands. Also, look at the air quality of their cities, very bad. The clear cost trends show Solar, wind, and EV/PHEVs will be cheaper. The Chinese government sees this and it will soon be a solution to their energy needs. It is already a partial solution now. Many of our USA politicians, most republicans and probably some demoncrats, are from the flat earth society. Unfortunate influence of money from large, well established, oil and coal companies. Thanks to Obama, Schwarzenegger, Jay Inslee, and others, particularly those working in the solar field, we are now starting to see a change over. It will accelerate until the lame brained repblicans look like the short sighted fools they are. Why spend billions on oil and coal subsidies when they are already profitable and their cost keeps going up? Why not terminate that spending and spend a fraction of that cost on solar, wind, EVs/EREVs, and new nukes? Look at how fast the cost is coming down and look at the fact that solar is already fully economical in Hawaii, S. California, and many other places in the world. …and the cost is still falling. We will reach the point of “solar obviousness” before 2015, to steal a phrase and prediction from Travis Bradford.

      • mds
        True, however if China’s goals were strictly to meet growing internal energy demand, they could do a lot back home in China w/o investing in the US. It would seem that they also want to make a buck in the process. It’s just good business sense.
        Isn’t it shocking how the GOP, supposedly the party of big business, seems to have completely missed the new reality where most countries now nurture entire market segments, like their auto industry, the aircraft industry, solar panel industry, etc. We can bemoan this, or we can face it (as the President has done) to get our fair share of new markets. Why do some politicians find it OK to pay millions in public funds to professional sports teams, but subsidizing growth industries isn’t… :)