FuelMaker Assets Finally Find a Buyer, Natural Gas Cars Still Stalled

phillbanktruptUpdated: FuelMaker, the beleaguered firm that made natural gas vehicle fueling stations for home users dubbed “Phill,” has finally found a buyer — well, its assets have. American Honda, the U.S. division of Honda (s HMC), which partly owned the decade-old Toronto-based company, has been trying to sell the firm for months — expending “considerable time and effort,” as American Honda put it recently in their statement. Meanwhile FuelMaker ceased operations and started bankruptcy proceedings in April. Well, this morning American Honda says a subsidiary of the automotive holding company Fuel Systems Solutions (s FSYS) has bought up the assets and IP of FuelMaker for $7 million an undisclosed sum (it’s got to be very low — it was previously selling for $17 million).

Despite FuelMaker’s best efforts, the natural gas vehicle distribution businesses just failed to take off. The device compresses natural gas from home gas lines, takes about four hours to fill an empty tank after a 50-mile drive (yawn), and costs between $5,500 and $6,000 (sticker shock). But the biggest barrier is clearly that natural gas vehicles are few and far between — Honda’s Civic GX is about the only consumer natural gas car around and can only be bought for $24,590 in select locations in California and New York. There’s more natural gas cars in city and enterprise fleets (AT&T plans to purchase 8,000 of ’em), but still the market is nascent.
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USB charger handles all your phones at once

We joke often about MobileTechRoundup host Matt Miller’s staggering phone collection.  Matt has more phones than probably anyone you’ll ever see and as he travels a lot it’s always a fun process to try and guess how many phones he’ll take with him.

usb-charger

A new USB charger from USBfever may be just what Matt needs with its 5 ports that can let him charge 5 phones at the same time from a single plug.  The charger has 4 standard USB ports and one mini-USB and will charge any device that charges via USB.  $26.

(via engadget)

Off-Topic: Why Citibank Should Vanish

citilogoAfter a long day, I returned home to find a mound of junk mail clogging my mailbox. Of note was a letter from Citibank informing me that it was jacking up the interest charged on my credit card, adding more fees for foreign transactions and other such issues that might result from an economic meltdown. Not much of this impacted me personally, but something bothered me about this letter dubbed a “notice of change in terms and right to opt out.” Read More about Off-Topic: Why Citibank Should Vanish

T. Boone’s Clean Energy Fuels, Honda Kill FuelMaker Deal

Clean Energy Fuels, the natural-gas vehicle distribution company of which former oil barron T. Boone Pickens is a director and largest shareholder, said last month it planned to buy FuelMaker from Honda and the FuelMaker Trust for $17 million. Well, late yesterday the companies announced that they have agreed to terminate the deal.
There were few details given in the announcement as to why Honda (s HMC) and Clean Energy Fuels (s CLNE) changed their minds, and we’re still waiting to hear back from the companies. But in the regulatory filing it sounds like Honda was actually the initiator of ending the agreement. In the filing Clean Energy Fuels says both companies had the right to terminate the purchase agreement if it did not close on or before Oct. 3, and this didn’t happen due to the fact that the sellers (Honda and Fuelmaker) were unable to deliver audited financial statements for FuelMaker’s parent company, a subsidiary of Honda, by that date. Clean Energy Fuels says it continued to negotiate but that on Oct. 13, 2008:

Honda delivered to us a notice that it intended to terminate the purchase agreement; and, after subsequent discussions, on October 15, 2008, we and Honda mutually agreed to terminate the purchase agreement in accordance with its terms.

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Pickens Meet Phill: Clean Energy Fuels Buys Natural Gas Vehicle Device Maker

In case you were wondering how T. Boone Pickens was going to break the home distribution bottleneck in his plan to get the U.S. to power its vehicles with natural gas, here’s one possible answer: Natural gas vehicle distribution company Clean Energy Fuels (CLNE), of which Pickens is a founder, said this morning that it plans to acquire FuelMaker from American Honda Corp. and the FuelMaker Trust for $17 million in cash. Founded in 1989 and based in Toronto, FuelMaker makes natural gas refueling appliances for industrial fleets, as well as a home consumer product called the Phill (seriously, it’s called the Phill).

The Phill, which was unveiled by Honda and FuelMaker in 2002, compresses natural gas from home gas lines, takes about four hours to fill an empty tank after a 50-mile drive, uses 800 watts, and weighs about 100 lbs. The biggest barrier to consumers buying the Phill is its price tag — we called the customer service line and the representative said we could get the Phill for between $5,500 and $6,000, including installation ($1,500) and shipping ($200). The representative said we were also eligible for a tax rebate of $1,000, or 30 percent of the cost.

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Blow-by-Blow: The First Fundraising

_*This article launches our Founder’s Diary, where a founder retells an experience with a challenge or task ‘blow by (agonizing) blow.’*_

*The following takes place between December 6, 2006 and February 27, 2007.*

It is my account of the experience, had alongside my co-founder, Walid Al Saqqaf, and other members of our team, of trying to secure the first $1M in seed funding for our company, “TrustedPlaces”:http://trustedplaces.com, from “HOWZAT media”:http://www.howzatmedia.com. TrustedPlaces is a user-developed city guide to London, where I live.

*Dec 6:* I wake up at 6:30, for yet another networking event – our fifth in a month that is less than a week old. It is a breakfast session this time. By accident we meet Hugo Burge, of cheapflights.co.uk. He’s a founder, too, and we quickly establish a good rapport talking about what it’s like to start-up a company in London, how some of the presenters at the event started and later “exited,” and also Hugo’s experience growing CheapFlights into a global company. Hugo tells us he is now a co-founder of HOWZAT media LLP., a freshly formed angel fund. TrustedPlaces, happens to be looking for money. We agree to talk further (!), though it’s nothing to get hugely excited about, as a number of previous encounters have taught us.

*Dec 11:* We have our first meeting with Hugo and his partner, David Soskin. We discuss TrustedPlaces in detail, our capital requirements, progress, business plans, etc. We agree on a follow-up meeting.

*Dec 19:* We have a three-hour session with Hugo and David, plus two members of the HOWZAT corporate finance team, Jo and Sascha. We cover more detailed aspects of the business, new product development. We even discuss valuation. I sense things are getting serious. We commit to delivering more detailed plans on the product roadmap and a marketing plan within a couple of days.

*Dec 21, AM:* Walid and I have had to pull an all-nighter to deliver everything on time as we had agreed. I’ve just spent 24 hours refining a business plan we thought was ready, contracts, my CV, everything we need for our corporate presentation for HOWZAT, We thought we had everything in place, but it had been a couple of months since we had looked at those docs. (How things change!)

*Dec 21, PM:* We receive HOWZAT’S first investment offer. It is not the same valuation we had suggested, but still within the limits that we had set. I have warm feeling, but also an awareness that the hard bit has just begun.

*Dec 22:* Receive term sheet. What does “dilution protection” mean again? We go back to the books, hit Wikipedia and Google. [Start looking for lawyers!

*Dec 25:* It’s Christmas. I travel home to Greece. Walid travels home to France, for the holiday.

*Jan 2:* We return to UK and sign the term sheet. We realize we still probably only about 40 percent of the way to getting the deal done. Due diligence has to be done. A lot of things can go wrong from here, but we’re positive and the investors seem positive, too. Some key changes on the TrustedPlaces product are helping traffic, reviews and the user numbers have grown since we first met Hugo. It is a big help.

*Jan 3:* I move house. I receive HOWZAT’s due diligence checklist and their request for a conference call to discuss it. I have to take the call surrounded by piles of boxes.

*Jan 8:* We still have no office at this stage, so we’re all working from home. Dima, our lead engineer has left his old flat, but the work can’t stop. He move in with me. I hand over my room, my bed and my desk while I handle the due diligence Q&A from the living room. I make Dima breakfast, lunch and dinner – it’s 5 Star service! We enjoy a big productivity jump, I suspect because we’re getting all this time to work face to face. Dima and I go for the occasional 15 minute walks to get fresh air and to problem-solve: we work out an algorithm for personalised recommendations to add to our site.

*Jan 9:* We meet three law firms and appoint one of them. The firm is expensive, but has been recommended by a fellow entrepreneur who previously went through a funding round with them, as well as an exit. Also, the partner representing the firm comes across as the smartest. She talks so fast and with such decisiveness, we figure we’ll be able to keep her billable hours low!

*Jan 10:* We spend all day with HOWZAT’s technical consultant for more due diligence. Their guy really likes the way we’re developing our software and gives a thumbs up to the way we manage code, backups, etc. Dima and Moty handle a couple of toughies really well. He asks: ‘How well does your architecture scale?’ They have schematics prepared showing a future architecture, mapped against future traffic and costs. They also have examples of previous implementations that have worked for others. I am proud of them. It is one BIG box ticked.

*Jan 14:* Most of the due diligence has now been covered. Everyone on our team is spent by the huge amount of energy required just to consolidate existing information and produce new documentation of our work product for HOWZAT.

*Jan 28:* We receive a draft investment agreement, amendments to the articles of association, and our new service agreements. We have to hit the books again to look up a few things—the number of new terms seem to increase exponentially with each set of documents. We meet up with our fast-talking lawyer.

*Feb 1, AM*: We launch a new version of our site. It’s a total refresh of the front end, plus a number of new features, like the personalized recommendations. Big exhale, then this: Hugo spots a bug in our search and recommendations feature (it had to be him!). Dima tweaks the algorithm, and tests and redeploys it – within a couple of hours. Even bigger exhale. Early user feedback is very positive and the links are starting to come in.

*Feb 1, PM:* A last minute misunderstanding on a term concerning ownership of the intellectual property adds more “excitement” to what is an otherwise quiet day (;-).We’re supposed finalise all documents tomorrow. We have to schedule a Skype conference with HOWZAT partners for 11PM to avert the crisis.

*Feb 02:* Final meeting goes as planned. We review and discuss all the documents in three-hours. Crisis averted.

*Feb 04:* Full TurstedPlaces team has dinner with HOWZAT media team. It is an equally big part of the deal’s due diligence. It is important to see if we will all get on with each other. The waiters us help us out: they confuse the day menu, twice; then manage to mix up Sascha’s order, three times. Everyone is amused, and relaxed now. We even discuss some obscure cricket rules (Turns out that a “HOWZAT”:http://en.wikipedia.org/wiki/Appeal_%28cricket%29 is a verbal appeal made by a player to an umpire in a cricket match. As in: “_Howzat_ a fair call!?”) Everyone has a great time. Another big box ticked – and they pick up the tab, which is nice!

*Feb 05:* We sign the contract and service agreements. Fantastic, but we still have not closed. Although we have agreed on everything, HOWZAT’s investment fund members still have to approve the transaction. It is a nervous waiting period, but a good opportunity to focus on the product and enjoy a bit of sport, for a change.

*Feb 23:* Three long weeks later (!) we receive word that HOWZAT’s board has approved the investment. Still more days of nervous waiting. No deal is “done” until the money appears.

*Feb 27:* Biggest bank account balance I’ve ever seen. We’ve done it! Time to celebrate. Mini pub crawl and dinner at Asakusa, my favourite Japanese spot in London. I can pick up the tab this time!

So that was it — 83 days from start to finish. It was the first time any of us at TrustedPlaces had raised such an amount, and it happened much faster than what we had expected. Then again, it took nine months of hard work to lead us to the day when we first met Hugo. The pressure was very high at times, but we got lucking with good timing on a number of occasions. And we had some great people working with us on both sides. We had done it! The lessons we learned were many. Here are my top three:

*1) Don’t underestimate the effort you’ll have to put behind due diligence. Prepare for it.

2) Find people you trust (like a fast-talking lawyer) to usher you through the process. This is critical.

3) Help yourself by reading up on legal and corporate terminology before you even begin to try and raise funds.*

Now comes the hard part for “TrustedPlaces”:http://trustedplaces.com : spending the money right!

Private Equity continues to pour into India

Earlier this morning, Cisco Systems and 3i along with Oman Investment Fund announced a $125 million investment in Nimbus, a media company based in Bombay. And with this big investment, thus began another crazy year of private equity investments in India.
The PE investments in India topped out at $7.46 billion in 2006 and are estimated to touch $10 billion in 2007. If giants like 3i and Cisco keep walking around with open checkbooks like they currently are, then it won’t take long. Cisco, as you might remember had said that it would invest $1 billion in India, of which $100 million was slotted for start-up investments.
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Seagate announces 8 GB 1 inch drive

Seagate has announced a number of new hard drives and the one that should have the greatest impact for mobile devices is the ST1. This drive is a one inch drive that has a storage capacity of 8 GB, making it a great storage solution for handheld devices.

"The ST1 Series – the first 8GB 1-inch hard drive designed for use in handheld and CompactFlash applications. It will let users store the industry’s largest libraries of music (200 hours – or 4,000 songs), video and digital photos for this class of product. Seagate’s unique RunOn Technology improves performance while in a high-vibration environment, such as jogging. The ST1 Series supports low-power modes, and the drive’s time-to-ready is a mere 1.2 seconds."