Impact Investing and energy: The Case of 4 Startups

Energy funds say this could be the golden age for ‘impact investing’ in innovative startups where investors support a positive environmental impact such as carbon reduction and also enjoy robust financial returns.

Here’re some clean tech funds investing in impactful startups

  • Clean Energy Trust
  • Evok Innovations
  • PRIME Impact Fund

Here’re 4 energy startups looking for funding

  • Encentiv Energy
  • Manta Biofuels
  • miQroTech
  • BuildSimHub

 


You have heard of value investing; here’s a new term gaining popularity in clean energy circles – “impact investing.”

In fact, this could be the golden age of impact investing, said Bruce Gebhardt, at a partner Pathfinder Capital Advisors LLC. He was moderating a panel Thursday titled “The Investors’ Perspective: Trends and Insights in Energy Innovation” at the Carnegie Mellon University Energy Week in Pittsburgh, Pa.

Supporting a positive social or environmental impact as well as achieving financial returns is at the heart of impact investing.

But it’s not that easy.

“How do you define impact, how do you measure impact in a consistent manner?” posed panel member Erik Birkerts, CEO of Clean Energy Trust. “We are dealing with technology coming out of the lab that’s nowhere near scalable. To measure their impact on a forward-looking basis is very difficult.”

Birkerts is responsible for Clean Energy Trust’s overall mission of fueling clean energy innovation and commercialization. To date, the trust has awarded more than $3.7 million in funding to 33 clean energy startups.

While impact and ROI are important considerations for investors,  where they put their money often is guided by force of nature, said fellow panelist Marty Reed, CEO of Evok Innovations.


 

“Everybody is admitting that climate is changing, and if that’s the case why aren’t we moving faster? If we don’t change, the planet will force governments to change and force capital to flow into those clean tech industries.”

 


A longtime Silicon Valley executive and investor, Reed moved to Vancouver in 2015 to launch Evok Innovations, a cleantech fund that is a partnership between the BC Cleantech CEO Alliance, Cenovus Energy and Suncor Energy.

Earlier on Thursday, David Danielson, managing director for science at the Bill Gates-backed Breakthrough Energy Ventures said his coalition of investors from across the world created a billion-dollar fund that will support its ventures to support cleantech investments. These projects will reduce at least half a gigaton of greenhouse gases during every year of BEV’s operation.

4 energy startups looking to take off

These nascent companies attended Thursday’s Startup Fair at Carnegie Mellon University to exhibit their innovative solutions with hopes of attracting investors who could help them grow.

Founded: 2009

Location: Pittsburgh, PA

Employees: 14 full-time

Funding: $2.4 million

Innovation: A cloud-based software solution that matches energy efficiency products and rebates in each state to help building owners manage and save energy.

“The challenge is that thousands of new energy efficiency products are coming out every month – say LED lighting or HVAC controls – and there’s a disconnect between the products and people who manage and operate buildings who ought to be using these products,” said President and CEO Stephen Moritz.

GE Lighting, Acuity and Eaton are among the lighting companies that are working with encentivenergy to educate their customers, including the building owners and managers. Moritz said given the

“We have got a lot of interest from major industry consulting companies looking for scalable technology,” he said. “It’s not unrealistic to think in the next 2 to 4 years we will be acquired by one of these companies. I would think companies like Oracle and SAP with large customer bases would be a good partner for us.”

Founded: 2014

Location: Owings Mills, MD

Employees: 12, with 6 full-time

Funding: $3 millon, including $1 million in US DOE award

Innovation: Renewable crude oil from algae that can replace fossil fuel in traditional refineries, reducing carbon emissions.

“Our solution will replace fossil fuel in refineries with renewable crude oil from algae,” said founder Onur Unal.

Currently, the product is being tested at a small refinery in Pennsylvania. Algae grown in a 5,000-acre pond is fueling the refinery which processes 10,000 barrels per day.

“According to the government, there’s more than 100 million acres of land available for algae here in the US,” Unal said. “We’ll hit a big milestone in 2022 when we plan to sell renewable algae-based crude oil to full size refineries. Once we accomplish that, we will be a target for acquisition or we will float an IPO (initial public offering).”

Founded: 2016

Location: State College, PA

Employees: 2 full-time and 1 part-time

Funding: $215,000

Innovation: An Internet of Things (IOT) solution that externally monitors the health of oil and natural gas pipelines, helping with predictive maintenance.

“Our advanced pipeline leak detection system gives oil and gas companies the ability to act sooner rather than later, preventing and reducing damage from the common causes of pipeline failure,” said co-founder Justin Stewart.

Common causes of pipeline failure include interior corrosion, sabotage, human error, earth movement, and faulty safety systems – all things that sensors can detect before they spiral out of control.

Stewart said the company is developing artificial intelligence and machine-learning backed solutions to analyze data real-time, and help companies make prompt decisions.

“We are a part of startup accelerator Ocean based in Cincinnati,” he said. “We closed one round of ECF (equity crowd funding), and are seeking funding.”

Founded: 2017

Location: Pittsburgh, PA

Employees: 3 full-time

Funding: $120,000

Innovation: A cloud-based software solution that helps optimize building performance with regard to compliance with codes and regulations.

“Our solution optimizes building performance by automating the code of compliance,” said co-founder and CTO Haopeng Wang, an alumnus of Carnegie Mellon University.

Wang said the code of compliance for commercial buildings can be complicated, depending on jurisdictions, and typically necessitates professional expertise to figure out the various requirements and performance thresholds. Building managers can seamlessly integrate their solution with their existing workflow to optimize building performance.

Helped by accelerator TechStar last year, the startup in on a growth plan.

“Our goal is to go public in 5 years,” Wang added.

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