21st Century Regenerative Technology

1. RockPort Closes $450M Fund for Cleantech Exits
2. Iogen Suspends U.S. Cellulosic Ethanol Plant Plans

RockPort Closes $450M Fund for Cleantech Exits

2008-06-04 19:31

Craig Rubens - Big Green

RockPort Capital Partners has closed its third venture capital fund, which they claim has commitments of more than $450 million, making it their largest fund yet and one of the largest cleantech funds ever. It will be aimed at later-stage opportunities, specifically startups looking to exit.

James estimates that RockPort will invest in about 25 companies from this fund, making larger individual investments with the intention of owning more of their portfolio companies. Previously, RockPort had invested in about 40 cleantech companies from two earlier funds and currently has nearly $850 million under management.

Part of a new strategy will see RockPort taking greater equity in the companies they invest in, founding partner Wilber James tells Earth2Tech. “This fund is a recognition that it's going to take more money. It's a recognition we want to own more of the companies. And it's also a recognition that you can put more money to work in later-stage opportunities,” James says. It’s one thing to fund a laboratory-level startup, or even a pilot-phase project, he explains, but scaling up to a commercial plant, especially in the biofuel and electric car spaces, is something else entirely. Indeed, the industry has seen very few cleantech exits — perhaps they just need more funding at that crucial later stage.

James sees several trends that have developed since RockPort started investing in cleantech that he thinks will spur more cleantech exits. One of the most obvious, he says, is the increasing number of talented managers that are pushing cleantech forward. “In 2000, when cleantech didn't exist, the biggest problem wasn't finding interesting technologies but finding mangers and entrepreneurs.”

Hedge funds will also be making some late cleantech plays and James says he’s already working with several hedge funds to help some of RockPort’s investments. “Finance is going to become a bigger part of cleantech, I assure you,” says James. “Hedge funds are very good partners for VCs and some of these cleantech startups. So long as they have patience and try to work with the company, they can bring capital and access to debt to later-stage opportunities without having to do an IPO.”

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Iogen Suspends U.S. Cellulosic Ethanol Plant Plans

2008-06-04 18:27

Katie Fehrenbacher - Startups

While we just heard that land management company Alico has decided to nix its plans to build a cellulosic ethanol plant in the U.S., Canadian company Iogen tells us that it, too, is backing away from its intentions to build a cellulosic ethanol plant in the U.S. It’s interesting because both Alico and Iogen were chosen by the Department of Energy in February 2007 to potentially receive funding to build the first of the next-generation of cellulosic ethanol plants in the U.S. that can churn out biofuels made from waste, plant byproducts and energy crops.

Iogen had planned to build a plant in Shelley, Idaho; construction was due to start this year and be completed by 2010. Guess there’s been a change of plans. An Iogen spokesperson tells us that the company has “suspended” its cellulosic plant plans for Idaho to instead focus on its more advanced plant in Saskatchewan, Canada. The spokesperson says that at this time the company won’t be pursuing those DOE funds, which according to the Canadian Press, where we first read of the suspension, included loan guarantees and grant money that was estimated at some $350 million.

The Canadian Press story also quotes one Corey McDaniel, a legislative assistant to U.S. Sen. Larry Craig, who said that Iogen suspended its plant in Idaho because the DOE didn’t offer the company a bigger loan guarantee. Perhaps the DOE’s lack of potential funding for Alico’s planned plant was also a factor behind that company’s decision. Many cleantech advocates have said that loan guarantees from the federal government could be the single most important factor in getting new, large-scale, renewable energy technology built in the U.S.

Regardless of the reasoning, it’s very significant that at least two of the companies that the DOE vetted to possibly receive government funds to build cellulosic ethanol plants are now backing down. Good thing there are other private funding means and the venture world to help get almost of dozen of these things built in the next few years.