Funding Roundup: Dancing on the Edge of a Bubble?

The U.S. economy may be tanking faster than you can say "subprime mortgage crisis," but despite the abysmal outlook in most sectors, cleantech is the one investment gift that keeps on giving.

Cleantech investments totaled $1.25 billion in the first quarter of 2008 in North America, Europe and Israel, a 42-percent increase from the same quarter of 2007, according to a report last week by the Cleantech Group. The investment actually represents a 20-percent decline from the previous quarter, but it is a record-breaking amount invested during a first quarter in the cleantech category, the group said.

The numbers still are higher than recorded by other groups tracking the industry. For instance, according to Greentech Media’s Venture Power Report, investments totaled $998 million in the first quarter (see Funding Roundup: Greentech Sees $988M in Q1).

Still, could the growth mean the cleantech bubble is bursting? The Cleantech Group’s report says that ethanol, wind and thin-film solar investments have already topped out, but if this week is any indication, the cash is still rolling in, particularly from government and private equity funds. Below is a roundup of funding news over the past week, by sector:

Solar:
•    OptiSolar, a Hayward, Calif.-based producer of thin-film solar modules, raised $3 million from Kensington Capital Partners, which it will use to build a manufacturing plant in California as well as several 10-megawatt solar farms in Ontario, Canada.

•    LDK Solar, a Chinese solar-wafer company, priced $400 million of convertible notes and said that it would use the money to build its polysilicon factory and expand its wafer production (see LDK to Raise $400M, LDK Wants $300M and LDK Seeks Big-Time Capital).

•    Mainstream Energy Corp., a San Luis Obispo, Calif.-based solar-supplier investor, raised $40 million from Renewable Energy Corp., also known as REC. The investment gives REC, a Norwegian producer of multicrystalline solar wafers, a 20 percent stake in Mainstream -- which in turn happens to have an investment in an installer named REC Solar. The San Luis Obispo, Calif.-based REC Solar installer is not the same as the REC subsidiary named REC Solar, which produces solar panel, but having the same name apparently didn’t hurt its prospects.
 
Biofuel:
•    The Dubai Group paid $49.5 million for a 30-percent stake in GBD Investment, a Malaysian biodiesel firm that uses palm oil as feedstock at its 200,000-ton facility at Lahad Datu, the capacity of which will more than double in a second phase of expansion.

•    Leaf Clean Energy pumped $20 million into Greenline Industries, a San Francisco-based company that makes a waterless system for producing biodiesel.

•    Altira Group announced that it would invest an undisclosed amount in Evolutionary Genomics, a Colorado-based company that optimizes biofuel feedstocks via genetic screening. Altira Group’s investment in EG came from a $176 million fund it recently closed for clean-energy technologies.

•    Codexis, a developer of biocatalysts for the pharmaceutical and biofuel industries, filed for an IPO, in which it plans to raise up to $100 million.

Smart Grid:
•    Bulletin-board-traded Ambient Corp. (OTCBB: ABTG) raised $10.7 million from Duke Energy to develop "smart-grid" technologies that use power lines to transmit data (see VentureBeat post). In January, the broadband-over-powerline company closed $2.5 million from Vicis Capital, which already had invested $10 million (see Funding Roundup: Money for Solar, Transportation and Masdar).

•    eMeter Corp. last week said it had snagged $12.5 million for its software to manage utilities’ advanced-metering and smart-grid initiatives. Siemens Corp. led the round and Foundation Capital and DBL Investors participated. The San Mateo, Calif.-based company previously raised "around" $14 million, according to the announcement.

•    Silver Spring Networks, yet another smart-grid company, raised $17.4 million in its third round of venture-capital funding (see Green Light and VentureBeat posts). The Redwood City, Calif.-based company has developed a networking platform that allows utilities to connect different energy-related technologies, such as energy-generation equipment, energy-storage devices, energy-efficient appliances and energy-monitoring and management devices and software. Silver Spring was named a Technology Pioneer by the World Economic Forum in November (see World Economic Forum Crowns Greentech Pioneers).

Other:
•    Small-wind turbine startup Mariah Power, based in Reno, Nev., raised $500,000 from Greenhouse Capital Partners and Big Sky Partners, bringing the company’s total funding to $1.25 million (see Mariah Power Gets a Gust of Financing).

•    BridgeLux, a Sunnyvale, Calif.-based company that makes light-emitting diodes, also known as LEDs, raised $40 million in a round of funding led by VentureTech Alliance, bringing the company’s total funding to $71 million.

•    Scottish and Southern Energy invested $29.6 million in U.K.-based Geothermal International, a supplier of geothermal heating and cooling systems, giving SSE a 20-percent stake in the company.

Funds and Government:
•    The U.S. Department of Energy announced plans to invest up to $5.2 million in university research projects on solar cells and hydrogen energy systems, which are part of a federal-state partnership to increase competitiveness in energy-related sectors.

•    The California Clean Energy Fund said it would create a Clean Energy Angel Fund and raise up to $20 million for seed and early stage investments in clean-energy companies (see Filling Greentech’s ’Early-Stage Gap’ and Q&A: California’s New Angel).

•    The state of Ohio granted $8.9 million through the Ohio Third Frontier Fuel Cell Program to advance fuel-cell research and development in the state.

•    New York State Common Retirement Fund said it will commit $500 million to cleantech investment over the next three years.

•    Intel Capital, the global investment arm of Intel Corp., created a $500 million fund dedicated to Chinese technology startups that will include some investment in cleantech companies.

•    Tang Energy Group raised $40 million from private equity groups in the United States and Europe and said it plans to invest in Chinese cleantech projects.