Cleantech Startups Make the Case They’re Worth the Investment

A bi-monthly gathering of investors and entrepreneurs featured presentations by three early-stage cleantech companies who say they’re poised to grow. But don’t take their word for it; check out their details below.

Entrepreneurs, investors, and other cleantech enthusiasts gathered in Midtown Manhattan last week, hoping to hear about—and potentially pounce on—cleantech’s Next Big Thing.

They’d come for the NYC Cleantech Opportunities forum, a bi-monthly event hosted by law firm Hodgson Russ that features presentations from three early-stage cleantech companies.

The most recent audience, of about 75, heard pitches from three very different startups: Besstech, a designer and engineer of nanoengineered technology for lithium-ion batteries; Bandwagon, a developer of apps and systems that facilitate taxi-sharing; and AgileSwitch, whose products seek to improve the efficiency and lifetime of power inverters and converters.

All of the companies are, or will soon be, seeking venture funding.

Besstech (Battery Energy Storage Systems – Technologies LLC)

Fernando Gómez-Baquero, CEO of Besstech, kicked off his presentation with a question: “How is it that, in an iPad, everything is shrinking but the battery?” The battery is the most antiquated technology inside these devices, said Gómez-Baquero. He believes this stalled technology presents a great opportunity, and he’s on it.

Indeed, the battery market is a somewhat frustrated one. While the technology’s development is integral to the viability of electric vehicles and many other technologies in the cleantech space, they’ve traditionally been heavy, expensive, slow to charge and quick to lose their power. These attributes haven’t exactly called out to investors: according to the Cleantech Group, in 2012 energy storage (a category that includes batteries) saw a 22.2 percent drop in venture capital deals.

Gómez-Baquero, who earned his Ph.D. from the College of Nanoscale Science and Engineering at the University at Albany SUNY, said his company can change that. He said he’s approaching battery technology with a unique perspective—that of a semiconductor expert.

“Why don’t we make batteries like we make computer chips?” Gómez-Baquero asked himself before founding Besstech.  His company manufactures a nanostructure (it can be produced in two hours) that serves as the anode of a litium ion battery; it can hold more than three times the power of graphite, the material most often used in batteries’ anodes. Because the anode can hold 1,000 charges, and perhaps as many as 3,000, its lifetime is sufficient for use in electric vehicles.

Questions still exist around the tehcnology’s ability to scale up for large-format batteries, Gómez-Baquero said; Besstech identifies this question as its biggest risk and said it’s working with manufacturing partners to address it.

The company just finished a six-month R&D phase, and is now entering a 12-month commercialization stage. It has received $1.5 million in seed funding from an international VC, and forecasts a Series-A round in the third quarter of 2014 with a goal of raising about $5 million.

Bandwagon

Bandwagon, which employs an app and a “batch-based queuing” process to gather passengers with similar paths so they can share taxi rides, is an example of an exploding sub-category of cleantech called “cleanweb.” Cleanweb companies leverage technologies such as smartphones, the Internet, and social media to encourage better use natural resources—and they tend to appeal to skittish and  risk-averse cleantech investors, because their internet-based technologies don’t require significant capital to scale up.

For its part, Bandwagon plans to capitalize on improving efficiency. According to CEO David Mahfouda, the New York City Taxi and Limo Service Commission is the seventh largest public transportation system in the U.S., and it operates at a paltry 30 percent capacity. Bandwagon’s concept, Mahfouda said, “is to resell that excess capacity.”

Bandwagon secured a deal with the New York Port Authority to create a “HOP Lane” at LaGuardia Airport—and the company received at $100,000 grant from New York State in July 2012 to develop and install the lane. If passengers are willing to be “batched,” they bypass the airport’s regular taxi line and go right to the HOP Lane. They’re charged a flat $3 fare for access to the HOP Lane, but the ride is cheaper, because it’s shared.

In March 2013, Bandwagon received another $100,000 grant from the state to integrate its mobile app into the process, allowing users to organize shared rides from their homes to the airport. The “batching” algorithms ensure that no passenger goes more than 20 percent out of his or her way.

In addition to the deal with the NY Port Authority, Bandwagon is in talks with Union Station in Washington, D.C., about a similar setup.

Mahfouda envisions the technology expanding to become a broad platform that riderse will use to get anywhere within the cities in which it operates.

AgileSwitch

AgileSwitch produces power electronics products that can be involved in every aspect of cleantech: solar, wind, electric vehicles, and more. In each of these areas, electricity needs to be converted—solar energy, for example, needs to go from DC on the panel to AC on the grid—and AgileSwitch’s aim is to make that conversion more efficient and longer-lasting, said Rob Weber, the company’s CEO.

Current inverters are known to fail in seven to ten years—typically by blowing up, said Weber. He added that the market has not yet been disrupted by digital technology—his company intends to provide that disruption.

AgileSwitch’s products include gate drive boards—which power and protect switches—among others (currently, the company has 7 products in the market, and 15 customers, who include manufacturers of solar inverters, wind turbines, motor drivers, electric vehicles, and others). Weber said his company’s products can double the lifetime of an inverter.

The company’s revenues totaled $323,000 in 2012 (with a loss of $127,926), and the company has seen $170,000 in revenues year-to-date. Weber projects a $40 million revenue opportunity by 2017, in capturing 40 percent of the market. Invested capital totals $757,000 so far—all loans, stressed Weber. He hopes to raise $1 million by the end of 2014.

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