The financial-market turmoil continues to inject uncertainty into the greentech industry, as companies struggle to predict how long the credit crunch might last.
Until banks and other investors become more willing to finance large wind farms or other renewable-energy projects again, some companies will have to use their own money, said Reyad Fezzani, head of BP's solar- and wind-energy operations last week at the Dow Jones Alternative Energy Innovation conference south of San Francisco.
Tesla Motors realized how bad things had become when several potential investors promised term sheets only to postpone them. The startup carmaker decided to lay off people, shave other operational costs and wait for a loan guarantee from the U.S. Department of Energy to finance its expansion plans (see Musk: Tesla hit by Market ‘Freefall').
In addition to getting the $200 million loan guarantee, Tesla also plans to apply for part of the $25 billion in loans recently set aside by the U.S. government to help American carmakers build more fuel-efficient vehicles, Reuters reported.
With money wells drying up, wind- and solar-equipment makers will likely have a difficult time setting sales and production targets for 2009. Already, Spanish wind-turbine maker Gamesa said it's shutting down some of its factories and waiting for customers to confirm their purchase plans (see Wind Turbine Shortage Over?).
The U.S. Federal Reserve Board could cut interest rates again this week to shore up confidence and encourage banks to loan money. October is shaping up to be a record-setting month for the financial markets – and not in a good way.
The Dow Jones Industrial Average has declined 22.8 percent so far, the S&P 500 is off 24.7 percent and the Nasdaq has fallen 25.8 percent, likely making this month the worst since the stock market crash in October 1987, Reuters reported.
Meanwhile, there is no shortage of startups looking for capital. Companies seeking early stage deals might have better luck, since they won't have to think about exits through initial public offerings or acquisitions any time soon.
Here is a roundup of recent funding news:
PRIVATE:
Transportation:
- Better Place announced Wednesday that it would work with Australian utility AGL Energy and financial advisor Macquarie Capital Group to raise $670 million. The company plans to use the money to build a network of electric car battery-replacement and recharging stations in Australia. The Palo Alto, Calif.-based startup, founded by former SAP executive Shai Agassi and formerly named Project Better Place, raised $200 million in capital in October and also is planning to build electric-vehicle recharging stations in Israel and Denmark.
- Cobalt Biofuels closed $25 million in a third round of funding earlier this month and plans to build a pilot biobutanol plant in the San Francisco Bay area by next year, the company told Greentech Media this week. The Mountain View, Calif.-based startup plans to seek more funding to build a commercial-scale plant to produce biobutanol, which can be used as a solvent or blended into gasoline or ethanol. Life Sciences Partners and Pinnacle Ventures led the round. Other investors included Vantage Point Venture Partners, the Malaysian Life Sciences Capital Fund, @Ventures and Harris and Harris.
Batteries:
- Planar Energy Devices, a National Renewable Energy Laboratory spinoff that launched last year, hopes to close $12 million in a second round of funding in early 2009. The Orlando, Fla.-based company is developing thin-film lithium-ion batteries that it claims can provide higher energy density - and avoid the threat of thermal runaway - at a lower cost than its competitors (see Startups Undeterred Despite Weak Economy). Planar raised $4 million in its first round of funding from Battelle Ventures last October (see Can Thinner Batteries be Better?) and plans to raise $20 million in its third and last anticipated round in the fourth quarter of 2010.
- A123Systems received $30 million from General Electric (NYSE: GE) as part of its $102 million series E financing. GE has invested a total of $55 million in the Watertown, Mass., battery maker, making GE the largest equity investor and owner of a 9-percent stake in the startup. A123 filed for a $175 million initial public offering in August, but has not yet set a date or pricing range for it. Earlier this week, Reuters reported via anonymous sources that General Motors had chosen Korean LG Chemical and its Michigan-based subsidiary Compact Power, rather than A123 and partner startup Continental, to supply batteries for its hybrid Chevy Volt car.
Other:
- Hyperion Power Generation CEO John R. Deal said he's raising an undisclosed amount of financing to develop a $25 million, hot-tub-sized nuclear reactor that can produce up to 25 megawatts of electricity. The Santa Fe, N.M.-based company, which hopes to close the round in January or soon after, is using research from the Los Alamos National Laboratory to develop its product, which the company said would make nuclear-power generation more accessible. That's because Hyperion's small power plants would take less time and money to build than traditional nuclear plants, which can take a decade to build and cost billions of dollars.
- CleanScapes raised $1.6 million from SJF Ventures as part of a $10 million equity and debt financing to expand its recycling business. The Seattle company will use the money to buy trucks and hire people for trash-collection services in the city.
- Wattbot, which helps consumers determine their renewable-energy investments, is looking to raise $3 million to $5 million in its first round of venture-capital funding. The San Francisco startup is launching a Website that will calculate the types of renewable energy and energy-efficiency products that a household can afford, based on the location of the property and factors such as home appliances already in use and homeowners' goals.
FUNDS:
- Denham Capital announced Thursday it will invest up to $80 million in Plantation Energy, an Australian maker and exporter of biomass fuel. The investment will make Denham Capital a majority owner of Plantation, which is building a manufacturing plant in the Western Australia town of Albany that plans to make biomass pellets from tree-harvest residue. The plant is set to start production in early 2009.
- The Carbon Trust, a company set up and funded by the United Kingdom government, has pledged £10 million ($15.8 million) to the Offshore Wind Accelerator, a coalition of five European energy companies seeking to cut the cost of wind power. The Carbon Trust said the rest of the project's costs of about £30 million ($47.5 million) will come from Denmark's Dong Energy, Ireland's Airtricity, Germany's RWE Energy, Scotland's ScottishPower Renewables and Norway's StatoilHydro.