Those who have been in the cleantech sector, and especially those who tried to raise money for anything cleantech, they will know the sinking feeling when a VC they approach tells them: But your idea is not scalable.
That indeed was one of the cleantech-as-we-know-it’s biggest problem when it came to VC investments – cleantech investments were all about engineering, core science, physical stuff where you required 10X investments for 10X growth – VCs are more used to 1X investments for 10X growth.
In this interesting Fortune article, Peter Shannon, a managing director with Firelake Capital in CA and who invests in sustainability technologies, says cleantech and VC might not any longer be mutually exclusive. Here are some of the examples he gives of the New Cleantech applications:
- Bringing control and flexibility to how we grow food, using sensors, cheap LEDs, and software algorithms
- Revolutionizing cold-chain logistics for fresh food using fuel cells, sensors, and big data
- New business models for financing renewable energy assets that increase liquidity and market efficiency
- Transforming urban mobility using computer vision, geospatial data, and leveraging the ubiquity of smartphones
A closer observation of the examples above will show that many of these have an IT component in them sensors, big data, smartphones. Which is not surprising, as anything that is super scalable cannot be pure hardware, there will need to be a software/information component to it.
One can even think of the new cleantech as the intersection of infotech & old cleantech…
Think of it in any way, but it will indeed be wonderful if cleantech starts attracting VC investments once more. Lots of research is needed in cleantech, and the traditional financing (banks, PE) are not going to fund this research!