Kilambi's startup,Sriya Green Materials of Marietta, Ga., backed by a global cement company and a major chemical concern, is trying to raise $10 million to build a pilot plant this year. Confident in his prospects given past fundraising successes, Kilambi needs the cash infusion at a time of notable change in the so-called clean tech arena.
For many investors, that change means shifting funds from capital-intensive alternative-energy technologies, such as solar panels, to lower-cost ventures focused on energy efficiency and “smart grid” technologies that automate electric utility operations.
“We continue to be very optimistic about things like the smart grid and the infusion of information technologies and software services” into old lines like electricity, agriculture and the built environment," says Steve Vassallo, general partner in Foundation Capital. “We’re very bullish on what I would consider the nexus of information technology and clean tech.”
Foundation, based in Menlo Park, Calif., reflects this in investments such as Sentient Energy Inc., a smart-grid monitoring company that allows utilities to remotely find power outages, and Silver Spring Networks, which provides utilities a wireless network for advanced metering and remote service connection.
Another holding, EnerNOC , a demand-response business with technology to turn off noncritical power loads during peak periods, went public in 2007.
EMeter, a one-time Foundation investment, was recently acquired by Siemens Industry.
To be sure, investors have not abandoned costlier technologies with longer-term horizons, but many — put off, in part, by last year’s bankruptcy and shutdown of solar power firm Solyndra— now favor smaller infusions in businesses with a quicker potential payoff.
Rob Day, partner in Boston-based Black Coral Capital, says his cleantech investment firm maintains some solar holdings, but he sees a shift from an emphasis on those types of plays to more “intelligence-driven, software-driven, web-driven businesses.” These technologies can be used to improve existing businesses, he says.
One Black Coral smart-technology investment is Digital Lumensof Boston, which makes high-efficiency, low-cost LED lighting for warehouses and factories. Software and controls are embedded in the fixtures, which can cut lighting bills by 90 percent, providing customers a two-year payback, says Day.