Clean tech venture investments

Another great session in TieCon, featuring whos-who of Clean/green tech media investing.

Attendees: Eric Weschoff of GreenTechMedia, Navin Chadda of Mayfield ventures, Andrew Chung of Lightspeed venture, Mattew Denesuk of IBM venture capital, Justin Label of Bessemer Venture

• Eric Weschoff - 2009 the money invested is $3 to $4B, compared to $300M in 2005.
• Navin - 80% of energy comes from fossil fuel, however 1-2% of the energy is coming from renewable market. The next gen renewable is an over funded/over capitalized market. 25% of total VC investment went into clean tech. We must focus on energy efficiency, management, and distribution vs. cap-ex heavy industry such as setup of renewable (e.g. solar) power plants.
• Andrew Chung - China has surpassed US in greenhouse gas emissions. We are now reaching cost competitive in fossil fuel and renewable energy sources - called grid parity. We are now seeing perfect storm as we are seeing all constituents - consumers, policy makers, and VCs invest in and be aware of clean tech issues. Looking at companies which can survive in these tough macroeconomic climate - tough capital market. So, can the companies partner with other companies for market entry.
• Justin Label - Bessemer decided to get into this space in 2005. They feel that all segments such as consumer, govt, ventures are creating the need to grow in this space. They have ventures in US and India. Growing middle class in the world (1B people being added to the global middle class), commodity crunch, and the need for energy.
• Matthew - not a traditional venture firm, IBM becomes limited partner in venture firms. IBM involved in Smart Grid project. Original smart meter roll out do not help more than give utilities a read out of the consumer's home.

Discussion

Why invest in commodity market like energy?

• Navin - we invest in LED companies which have high barrier to entry. There is huge opportunity in energy management - CPower is their investment : managing peak load consumption. Manage demand - in hotels, seminar hall. We need to do this intelligently - dim lights, switch off some lights.
• Mathew - commodity trading is defined as consumer is only concerned about price - e.g. gas. So the pricing pressures are high with very low margins. However, renewable energy is not a commodity - electricity which does not create greenhouse gases.

Opportunities in this space.

• Cleantech.org - read it.
• Tons of opportunities, come on in, look globally. In China and India its a survival driven demand.
• Energy management in buildings.
• Matthew - could be a bubble when companies goes around the utilities - straight to the consumer.

Smart Grid

• Substation monitoring - no systems monitoring is happening there.

Other questions-

• Carbon trading - monitoring and dashboard. Cpower is looking at it. Its going to be competitive but dependant on policy.
• Water - under invested sector. Not many ideas for making more efficient. Not an area of focus for Bessemer. Local problem as it cannot be transported as oil.
• Solar installer founded by folks who have no background in energy - improve the workflow.
• Mayfield will invest more money into this area compared to 2008.

Blogs to read up:

1. Greentechmedia.com
2. Cleantech.org.