Google leads fuel ventures

Australian
Tuesday 7/10/2008 Page: 30

Google and RockPort Capital Partners has led a quarterly record $US2.6 billion ($3.36 billion) investment by developers of solar energy, grid efficiency, and algae-based energy technology, according to Cleantech Group. Venture capital firms invested in 158 start-ups in the third quarter, including a record $US95 million for Sapphire Energy and Solazyme, which are developing fuel from algae ponds that could replace diesel and gasoline. Total investments in clean technology and renewable energy in 2008 have surged to $US6.6 billion, already above the $US6 billion for all of 2007, Cleantech Group said.

Most investments were in solar technologies such as thin film panels that improve efficiency. "This year, Google has invested more than $US45 million in start-ups with breakthrough wind, solar and geothermal technology," Google climate change director Dan Reicher said last week. "We need to unleash massive private investment in clean energy." RockPort Capital Partners invested in six companies and Google invested in five, making them the most active venture capital firms.

Other top investors include Kleiner Perkins Caufield & Byers and Khosla Ventures. "Cleantech Group venture investing has continued to show strong growth despite the unprecedented turmoil in the credit markets," said Michael Goguen, managing partner at Sequoia Capital and co-chair of Cleantech's advisory board. San Francisco-based Cleantech Group, formerly called Cleantech Venture Network, is an investor group that conducts industry research.

Companies in the US received $US1.75 billion, or about two thirds of the global total for the quarter, while those in Europe and Israel got $US742 million, mostly for thin-film solar and wind technology. China and India raised $US111 million and $US6.3 million respectively. Investments in companies developing thin-film solar, which is lighter and cheaper to install than traditional silicon-based photovoltaic panels, totaled $US620 million in the quarter.

"We have seen the arms race in thin-firm solar reach new heights, and now we are seeing it in the algae sector," Cleantech research director Brian Fan said. Investors were tunneling growing amounts of capital to companies that have not yet successfully scaled up commercial production". Sapphire Energy has raised more than $US100 million from investors such as Bill Gates' Cascade Investment, Chicago's Arch Venture Partners, and London's Wellcome Trust Finance.