Emerald Technology Ventures, the venture capital firm that invests in energy, water and materials, is especially interested in energy storage technologies and microgrids, according to managing partner Gina Domanig.
“We spent a lot of time in the past investing on renewables,” Domanig said at Bloomberg New Energy Finance’s “Future of Energy Summit” conference in New York last month. “We feel that storage and microgrids is an area of high interest for us right now.”
The firm is also looking at sensor development, data analytics and other “applications of industrial IT to the energy sector,” she added. “There’s a lot of interoperability that we see coming up, so there’s lot of innovation there.”
Speaking on a panel discussion about the interplay between energy and technology, Domanig warned that investors in clean tech need to have reasonable expectations.
“One has to be really realistic about how long it actually takes to prove out a technology,” she said. “The technology adoption cycles are extremely long in some cases. And even when you’ve proven the technology, the sales cycle can be very long.”
That means it’s “really important for VCs going in to really understand how long it actually is,” Domanig said. “Misalignment of interests and false expectations are things that lead to the demise of a lot of really good companies.”
Emerald, based in Zurich and Toronto, manages €340 million ($377 million) in three venture capital funds and two VC portfolio mandates, according to the firm’s website.
The firm has invested in more than 50 companies in the energy, water and materials sectors, and its limited partner investors include family offices, financial institutions and corporations. In February, Emerald announced two new investors: Korea’s Doosan Heavy Industries & Construction and French tire giant Michelin.
In the announcement, Michelin executive v.p.-corporate development Laurent Noual lauded Emerald’s “long history of working with entrepreneurs and robust deal flow,” and said his company’s investment with Emerald “represents an important pillar to support our efforts in partnering with external start-ups.
Emerald’s most recent investment was in Boulder, CO-based Terralux, which specializes in accelerating the adoption of LED-based solid-state lighting, which raised $11 million on March 4 2015. Other investors in the venture funding round included Crawley Ventures, Generation Investment Management, and EnerTech Capital.
Still, Emerald has its limits; Domanig noted at the Bloomberg conference that “not every great technology fits with venture capital,” typically due to either time or money. She did not specify any particular investment or technology but said: “There are some investments or technologies that take too long, or they need too much money, and I would just say, that’s not a place that VC should be playing.”
So how will potential breakthrough energy technologies get early funding? Domanig couldn’t say. “Who should be financing those technologies? That’s somebody else’s question to answer,” she said. “But it doesn’t need to be us.”
Energy Storage Seeing Big Investment Growth
According to data from the Cleantech Group, corporate and venture capital investment in the energy storage sector grew by 40% in 2014 versus 2013, to $443 million in 63 deals versus $317 million in 72 deals. Energy storage investing has continued its momentum in 2015, and in Q1 energy storage investment grew to $77 million versus $61 million in the prior quarter.
Notable Recent Energy Storage Fundings:
Source: CleanTechIQ’s fundings database