European Cleantech Challenge’s International Investor Roadshow : Who Are The Investors ?

         Many thanks to all of those who have taken their time to submit their entry ! We have received some great submissions so far and it will surely be a tough task for the judging panel to select a shortlist. Let us remind you that, if you haven’t done so already, the NEW submission deadline is next Sunday, August 26^th at midnight GMT.

Today, we would like to give you some details about the International Investor Roadshow. For those of you who have already registered and/or submitted ideas, you might be wondering : Who am I going to meet in this International Roadshow ? Who are these “top investors” I will get the chance to pitch to in Arena Meetings ?

         Well, here are some names of Venture Capital firms and Business Angels who participated in last year’s editions of the European Cleantech Challenge.  We hope this non-exhaustive list will reassure those who have registered to the challenge and will encourage those who haven’t done it yet !

• Sofinnova Partners (Paris, France)
• Aster Capital (Paris, France)
• Caixa Capital – Sociedade de Capital de Risco (Lisboa, Portugal)
• BASF Venture Capital GmbH (Ludwigshafen, Germany)
• 360° Capital Partners (Milano, Italy)
• Atlante Ventures (Milan, Italy)
• Italian Angels for Growth (Milan, Italy)
• IBAN – Italian Business Angels Network Association (Milan, Italy)
• Environmental Technologies Fund (London, UK)
• GP Bullhound Ltd (London, UK)
• GreenTEKventures (Switzerland)
• Clean Capital (London, UK)
• Jefferies International Limited (Frankfurt, Germany)
• Robert Bosch Venture Capital (Stuttgart, Germany)
• Earlybird Venture Capital (Hamburg & Munich, Germany)
• Vaekstfonden (Hellerup, Denmark)
• Samsung Ventures Europe (Staines, UK)
• Veraventure Oy (Helsinki, Finland)

European Cleantech Challenge : What happened to previous participants ?

Are you still hesitating on whether you should participate in the European Cleantech Challenge or not ? Sure, meeting business angels and VCs in an International Roadshow sounds like a great idea. However, is it worth the travel time and cost spent for all these Arena Meetings? Well, let’s take a look at what happened to Agroils Technology, a renewable energy company who participated in the Cleantech Challenge. Last March, we were glad to report that the Italian start-up, based in Florence, Italy had raised about $1.5 Million (€1.1 M) in the venture financing round. The investment was provided by X-Capital S.p.A. ($1.2 M/ €0.9 M) and Italian Angels ($0.27 M / €0.2 M) – Source: Biofuels International, Italy.

Agroils Technologies focuses on innovative processes enabling the production of superior quality biofuels, animal feed and molecules of pharmaceutical interest from no-food Jatropha energy crop. The Italian company intends to use the proceeds from the financing to develop its technology to produce biofuel, protein biomass for animal feed and Jatropha. Their solution has already helped many Jatropha farmers to optimize their production in Senegal, Nigeria and Dominican Republic.

This is only one of many success stories of start-ups that have successfully closed their funding round following the program. Give yourself a chance to succeed as well : www.europeancleantechchallenge.com ! Please note that registration and submission deadline is August 24^th.

UK Election Results Still Unclear for Cleantech

The UK’s first election of the decade has come and gone. The debates are over; election parties have fizzled out; political analysts are poring over the results, trying to divine the state of UK politics and the British economy in the next few years. One thing seems clear: power will be shared by the Conservative party and the Liberal Democrats, although negotiations are not yet over and no agreement has been signed. One thing which remains unclear is what direction economic policy will take; and how this election will affect the UK’s cleantech market.

Some hope, perhaps, will come from power (if any) the Liberal Democrats will be able to wield in science and enterprise policy decision-making after the Conservatives settle into Parliament. Indeed, the pre-election ‘green manifesto’ unveiled by the party’s leader, Nick Clegg, included far-reaching proposals aimed at boosting renewables deployment, cutting emissions, and providing incentives for the green building and green construction services sector, which is becoming increasingly important in the European and US cleantech markets.

However, the election has now passed, and cleantech seems to have been forgotten in the murky waters of negotiation. This is a common trend: pre-election debates focused very little on the environment, or energy, areas in which cleantech firms and entrepreneurs will play a key role in the future. Both parties will need to outline clear, synergistic plans and subsidy and incentive regimes if the cleantech market is to be supported.

This means keeping the focus on large mega-projects, such as the 300 MW Humber Gateway wind power project, or the 1GW London Array offshore wind farm, which will double the UK’s current 1GW installed wind capacity.

However, while strong backing and commitments may remain for large projects already in the pipeline, it is hoped that the election will bring more security and clearer vision to cleantech at a smaller scale, and especially at the scale of small to mid-sized enterprises, and venture-backed firms trying to capitalize on new ideas, technologies, and processes. This seems to be reflected in the current VC funding space; while investment amounts have picked up in the UK in the first quarter of 2010, investors are finding it difficult to pinpoint UK opportunities. Britain only attracts 2.5% of cleantech venture funding at the moment; this already small share is being allocated with difficulty.

The backing of small to medium-sized cleantech firms through official means, and the provision of space and resources where cleantech venture can thrive, is key to the UK’s low carbon future. In previous posts, I have argued for the importance of cleantech clusters, and for the developing maturity of the sector as its service component heats up.

However, promoting enterprise and innovation should also be a priority; and this is a sector where the UK could – and should – learn from Silicon Valley. In particular, fostering an innovation-focused national cleantech market requires changed attitudes to risk and failure; access to management teams able to exploit scale and commercialize products; opportunities for timely exits; and teams which can sell cleantech products efficiently and quickly in this rapidly changing and dynamic market. Forward thinking is needed. Indeed, as the issue of the UK’s deficit looms large on the horizon, the US is debating new, relaxed visa rules which will allow cleantech (and other) entrepreneurs to relocate to the US to start up their own ventures, subject to a minimum $250,000 funding requirement. This is a clear signal that innovation and the commercial development of new products and services is welcome and encouraged; it is, perhaps, the kind of initiative that the UK should take too.

As Nick Clegg, leader of the Liberal Democrats, argued at a security industry event in London at the end of April:

‘I feel very strongly that Britain has a fundamental problem when it comes to sustainability-related enterprise. And it is a problem brought home to me once again when I co-led a study mission of 19 founders and CEOs of UK cleantech companies to California, particularly Silicon Valley, earlier in the year. Stripped to its essentials, our basic, recurrent problem is that we are not good at bringing new solutions — cleantech or otherwise — to scale.’

By Federico Caprotti, writing for Skipso from London

Clean, Cool and Urban

As I write, the Clean & Cool Mission to San Francisco 2010 is drawing to an end. Some of the UK’s most exciting cleantech companies participated, and showcased their technologies, business ideas, and brands in the world’s premier cleantech venture space.

The Mission was also a good opportunity for UK cleantech firms to gain exposure to the wider technology funding and specialist community: indeed, the Mission dovetailed with the Cleantech Forum XXVI, sponsored by th Cleantech Group.

Some of the most interesting companies and technologies to be featured in the Clean & Cool Mission in California this year have a clear urban focus. Green building, sustainability, energy efficiency and conservation are buzzwords in an era of recession; but they are also new niches and potentially large new cleantech markets. Indeed, when considering the host of ‘green’ or ‘low carbon’ urban communities (or ‘ecocities’) springing up like mushrooms worldwide – from Masdar, Abu Dhabi, to the Sino-Singaporean Tianjin EcoCity.

These projects herald a new appetite for green building from scratch: for example, Fair Deal Investments (FDI) announced this week that it had completed due diligence on Ecocity Brasil, a 20,000 acre project dubbed the ‘Capital of the Environment’. FDI claims that the project is not only green in environmental terms, but in dollar value too: it expects a return on investment of up to 275% within three years. This may seem very high, and the risk may also be considerable, seeing as cost overruns and project cancellations and delays have blighted some recent ecocity developments.

For example, the approval of the plan for Dongtan Ecocity, on Chongming Island, near Shanghai, was announced amid much fanfare a few years ago. And justifiably so: the city was to be the world’s first large-scale ecocity, using renewables to power homes for up to half a million people. Fast-forward to 2010, and the project – organised by engineering firm Arup – seems to have been mothballed (read an incisive commentary by Austin Williams, director of the Future Cities Project, on this debacle here). However, the urban sphere has undoubtedly become the green sphere, and the green building market is a definite target for cleantech firms in the UK, US, and elsewhere.

This means firms like Cambridge-based Breathing Buildings, which develops passive ventilation stacks and other environmental solutions for making buildings more sustainable; or companies like Integrated Environmental Solutions, which apply IT tools to aid in integrated building performance analysis. Indeed, the firm, which boasts customers such as WalMart, was described by the Clean and Cool Mission as a company which is ‘widely recognised’ as a market leader; its Virtual Environment (VE) tool ‘is used by many of the world’s leading building design and consultancy firms‘. Other exciting green building-focused UK cleantech firms in California this past week have also included Modcell, which develops straw bale and hemp wall and roof cladding. The cladding is to such a high standard that buildings using it will be able to meet PassivHaus standards of comfort and sustainability in all seasons: indeed, buildings built using the cladding may well require little to no heating. PassivHaus buildings achieve energy savings of up to 90% compared with standard buildings.

By Federico Caprotti, writing for Skipso from London

Small-Scale Solar, Cleantech Funds Shine Brightly

As we head into February, some exciting new developments are afoot in the UK’s cleantech market. Firstly, the UK government seems to finally be putting its weight behind the development of a domestic, commercial micro-solar power market. A new scheme announced by the government’s Department for Energy and Climate Change (DECC) to support small-scale renewables generation includes feed-in tariffs, which can help stimulate domestic markets as well as renewables manufacturing firms. For example, Nao Nakanishi reports that Sharp, which manufactures solar panels in Wales, only installs around 1 per cent of the 5,000 panels it produces in the UK. The rest are exported to more developed renewables markets, such as Germany.

The announced feed-in tariffs will provide a boost to manufacturers through the creation of a domestic photovoltaic (PV) market: households will be able to sell the excess power they generate through their PV panels back to the grid. IMS Research has estimated that the domestic market for micro-solar at the PV level could reach 250MW of installed capacity in 2011, up from just 5MW in 2009. Indeed, PV installations of up to 5MW would receive £0.413 per kWh, which represents a positive incentive for installation.

One key question remaining, however, is whether the new tariffs will benefit the small-scale generation market and the residential market, but not the commercial building PV market. Indeed, as an executive at the Energy Saving Trust recently told me, ‘The difficulty in stimulating the installation of solar power in the commercial building sphere is due to property tenure: much of the UK’s commercial buildings are rented, so neither the current tenant businesses nor the landlords have a long-term interest in solar installation and the potential returns or savings they can make.’

These news come amid signs that interest in cleantech at the venture level is continuing to increase, albeit more cautiosly than during the ‘hot’ years before the crisis. The landscape for UK cleantech was one of VC uncertainty in 2009, with the largest declines in investment amounts since the tech bubble in 2000: in 2008, £1,001 million was invested in VC in the UK; this had dropped to £622 million by the end of 2009. While the VC funding picture remains largely unclear and uncertain, other types of investors are dipping their toes into the cleantech market in a big way these days.

Some of the good signs to have appeared over the past two weeks include the launch of the £125m Hermes Environmental Fund (HEF). The fund was jointly launched by Hermes Private Equity and the UK government’s UK Innovation Investment Fund (UKIIF), a governmental investment vehicle for high technology firms, technologies and innovation. It represents a welcome tie-up between private equity’s management experience and fund-raising capabilities, and strong government backing. Indeeed, Hermes will manage £75m in the fund of funds, while UKIIF will directly contribute £50m.

The fund will be invested by around 50 fund managers, and a minimum of 50% will be invested in the environmental sector. Around half of the fund is expected to be directly invested in Britain. The fund is allegedly expected to contribute to the creation of around one million new jobs in the low carbon economy: as Simon Havers, chairman of the British Venture Capital Association (BVCA) recently told the Wall Street Journal, ‘Today’s launch of the Environmental Investment Fund represents a positive step forward for clean tech financing in the UK’. Other firms are following suit: on 1 February, private equity firm HgCapital announced that its renewable energy investment arm, HgCapital Renewable Power Partners, had invested £260 million in three wind and solar power projects, including Scout Moor, the UK’s largest onshore wind farm.

Reporting by Federico Caprotti, writing for Skipso from London

UK Cleantech Heats Up in January 2010

Wind-powered farm tractors

No, this post is not about protest-happy farmers, nor is it about gas. Picture a wind turbine-powered tractor. Good. Now that I’ve got your attention, read on….

One of the trends to watch in cleantech is the tie-up between established engineering, power, utility, and media firms and smaller firms operating within the cleantech sector. This creates synergies and economies of scale, and gives cleantech firms access to management teams and capabilities enabled by these larger players.

However, positive synergies can also be reached when two firms with a cleantech focus merge, especially if these companies’ activities can complement their respective industrial or service focus. This is also the point made by a recent publication by Ernst & Young. The report Cleantech Matters. Going Big: The Rising Influence of Corporations on Cleantech Growth, argues that for ‘investors and entrepreneurs, the increasing interest and activity of multinational corporations in cleantech emphasize the growing market opportunities in this arena.’

Specialist Energy Group on the horizon?

A sign that this trend is heating up in the UK is the recent news that Nviro Cleantech, a UK-based low-carbon technologies commercialisation firm, is close to announcing a reverse takeover of Southbank UK. After the acquisition, the two companies would merge to form a new entity, the Specialist Energy Group. The deal would mean a tie-up between Nviro, a company with a wide experience base in the cleantech investment sphere, and Southbank UK, which describes itself as an ‘acquisitive niche engineering group’. Indeed, Southbank UK’s activities have included the acquisition of engineering firm Hayward Tyler, which is focused on pump and fluid-filled motor technologies for the oil and gas, power generation, chemical processing, and renewable energy industries.

Southbank UK is listed on the Channel Islands Stock Exchange, where it was floated in 2006. Nviro was floated in 2007 on London’s Alternative Investment Market (AIM); one of the positive aspects of a takeover, according to Tom Young at BusinessGreen, is that:

‘The move would give Southbank access to London’s Alternative Investment Market and better access to capital as it looks to reduce debt and broaden its shareholder base. It is also likely to improve its access to the fast-expanding renewable energy market.’

According to the acquisition announcement by Nviro, if a takeover goes ahead, Southbank UK’s shareholders will own approximately 52.68% of Specialist Energy Group, while Nviro’s shareholders will hold 26.34%. As a result, subscribers to the share offering will own 20.98%. Because Southbank UK’s size is larger than Nviro’s, the deal is classified as a reverse takeover.

Farming the wind: Ecotricity’s electric tractor

Another way of achieving horizontal as well as vertical synergies is through internal development and expansion into lateral markets without acquisitions. This seems to be the direction taken recently by, for example, electricity company Ecotricity. The firm is associated most closely with the delivery of electricity, although it hit the headlines in late 2009 with its announcement that it would supply biogas (‘green gas’) for the first time to UK households.

However, the firm announced plans this January to expand into low-carbon energy generation and transport: the first step will be the development of an electric tractor, tapping into the food production transport market. There are even rumours that the final design will be wind-powered, which would be an exciting development. Watch this space.

By Federico Caprotti, writing for Skipso from London

What’s Hot in Cleantech for 2010

What’s hot in cleantech for 2010

Writing from San Francisco, it is hard to imagine that 2010 will be anything but a good year for cleantech. Then again, San Francisco is not your normal cleantech city, and California is not your normal cleantech state. Indeed, as Earth2Tech’s cleantech startup map clearly shows, the Golden State is one of the main engines for cleantech innovation at the startup level. This is particularly true in the case of venture-backed companies investing in today’s ‘hot’ tech, like solar.

San Francisco, therefore, is a good place from which to do some blue-sky cleantech thinking. While working here and avoiding the dark and gloomy depths of the British winter, it feels appropriate to gaze into my crystal (or silicon) ball and to highlight the top three trends for cleantech in 2010.

1. Renewed cleantech VC activity

Compared with 2007 or even early 2008, cleantech VC funding remained fairly low in 2009. The year started badly, with record low amounts of VC investment compared with 2008: indeed, in the first quarter of the year, investment was down 46% on the previous year.

However, 2009 was not uniform by any means. Indeed, by end of the third quarter, VC investment had actually increased by 182% compared to the first quarter. Venture capital’s ‘exit velocity’ from 2009 is high. However, as data from Ernst & Young shows, what has changed is the emphasis on commercialization: 61% of new capital investment has been directed at companies which are currently shipping products to market.

This implies a continued, strong flow in terms of capital amounts, financing rounds, and number of deals in 2010. However, it also implies more caution in capital allocation at the VC level. Expect venture backers in 2010 to focus closely on firms well past initial development stages, or firms which can generate revenue streams with their early or established products.

2. Service provider consolidation

Cleantech service providers – from research and analysis firms, to consultancies, to web-based platforms and networks – are key to this information-intensive sector. As Matthew Kiernan, founder of sustainability research firm Innovest, argued in his book Investing in a Sustainable World, (published in late 2008) service providers have often been the innovative thinkers in cleantech, pointing towards new directions for more established investors, finance houses and asset managers. As cleantech grows, those firms which have a finger on the sector’s pulse will be of increasing importance as gatekeepers and providers of information and analysis.

So, expect consolidation among service providers as the cleantech service space becomes more mature in 2010. This will mean increased involvement in cleantech service provision by larger firms needing to incorporate a cleantech dimension in their research, media or consultancy offerings. Indeed, Kiernan’s own firm Innovest was taken over by the RiskMetrics Group in early 2009, so as to provide a ‘ready to go’ sustainability research arm for the group. Another sign pointing towards consolidation in 2010 is the takeover of cleantech information and research company New Energy Finance by Bloomberg in 2009. As Michael Kanellos, senior cleantech analyst at Greentech Media here in San Francisco, recently told me, ‘When these larger more established players come into the sector, that’s when these firms or their activities can take off; that’s when established firms’ structures and management can really play a role in developing cleantech service providers’.

3. 2010: the year of solar?

The technology to watch in 2009 was, supposedly, solar. It seems, however, that 2010 will really be the ‘solar year’. Indeed, 2009 provided a strong basis for the build-up of interest in solar, with the IPO landscape dominated by solar offerings. However, 2010 will see solar investment concerning not only specialised funds and venture firms, but larger companies too.

In part, this will be backed by government interest, by the tranches of stimulus packages focused on green energy, and by the continued interest in green building. In part, it will be fuelled by the more cautious investment approach taken by cleantech investors; as such, solar is an established and understandable technology, and investors will be especially conversant with solar panels, photovoltaics, and established components.

By Federico Caprotti, reporting for Skipso from San Francisco