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After ambitious plans, Xtreme Power runs out of cash, files for bankruptcy

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A startup with ambitious plans to build large battery banks next to solar and wind farms across the world, has now run out of cash and has filed for bankruptcy. Xtreme Power, founded in 2006 and based in Kyle, Texas, is also using the bankruptcy filing as an attempt to sell the company.

According to the bankruptcy filing, Xtreme Power has just $34,000 in cash in the bank at this point, and $10 million in debts. Some of the creditors listed include Arnel Investments, Spring Ventures in San Francisco, Horizon Batteries, which holds the license for the batteries Xtreme Power used, and the Department of Energy, which gave Xtreme Power a grant from the 1603 cash grant program. The company was funded by Sail Ventures, and Bessemer Venture Partners, among other investors.

Xtreme Power: A Super-Battery For Hawaiian Wind Farms

At one point a couple years ago Xtreme Power told us it had been seeking financing for a $425 million battery plant that would roll out an eventual 2 gigawatts of batteries per year to be used to provide energy storage for the power grid. Between 2009 and 2011 the company’s sales grew quickly, with a few new contracts from project developers like wind developer First Wind for a battery system in Oahu. The company says it had annual revenues of $22.2 million in 2011.

But following a slow down in sales of its products in 2012, and a fire at its battery farm in Hawaii in 2012, Xtreme Power saw a cut in revenues in 2012 and 2013. In early 2013 it stopped manufacturing the batteries licensed from Horizon and instead focused on selling the battery and power management software systems. In recent months the company has laid off much of its staff.

Xtreme Power’s ambition’s reflect a common tale for clean power startups. The company looked to grow too fast, and had a business model based around another company’s technology: the lead acid batteries from Horizon.

However Xtreme Power did manage to get some traction in the energy storage market before its struggles. Xtreme says it has 12 projects in the field that equal 60 MW worth of battery storage coupled with clean power.

11 Responses to “After ambitious plans, Xtreme Power runs out of cash, files for bankruptcy”

  1. Bruce Miller

    Much of American finance fandangaling is carried on this way, and is one reason that country has been at a dead stall or even running backwards for three decades now – bankruptcy with no real money lost? No body understands the complexity of American financial law and its ever-changing appearance -and some suspect that is deliberate. Even Austrailia has given up in defeat and de-coupled from the U.S. Petro Dollar and opted for the Chinese Yuan now – You Google, you see.

  2. I know XP received some $2.5m in green energy grants from the State of Texas, but I don’t believe they were the direct recipients of any other taxpayer money. The projects they supported, however, all received federal grant money or tax credits in some form or fashion. XP was basically a supplier or subcontractor on those projects. In other words, the wind or solar farm received the taxpayer money, and part of it was spent on XP battery systems. When the government stimulus money and production tax credits dried up in 2012, so did the business.

    The fire at the Kahuku facility certainly didn’t help their credibility, but they have a near-identical system still in operation on Maui, and half a dozen other smaller scale units still going strong. With oil flowing out of the ground like water these days, it is hard to justify the economics of battery storage systems with any form of alternative energy. Just too expensive, even with government subsidies. That’s my take, for what it’s worth.

  3. Felix Hoenikker

    Should ask Tom Cain formerly of Sail VC how much money he lost on Xtreme. Company was full of shady execs that wouldn’t document anything, just a lot of phone calls and went out of their way to cover up the fires their systems caused. Good riddance.

  4. The only thing missing from the article is how much taxpayer money went into this green operation that is expected to be lost forever. I don’t have any insight into this particular company, just recent history.