VantagePoint curbs cleantech fund raising due to lack of interest

One of the most aggressive cleantech investors, VantagePoint Capital Partners, has stopped raising its more recent billion dollar cleantech fund. Why? Lack of interest from limited partners, the investors that put money into VC funds. And that’s been an ongoing trend.

Cleantech is dead, like the Internet was in 2000

Check out an hour long discussion between myself and three cleantech investors about the state of cleantech, the future of cleantech — and importantly for them — where the money is for cleantech.

The other reason for oil dependency

When thinking about the rising price of oil, folks in cleantech tend to think in terms of transportation fuels and what can be done to replace them with renewable and clean sources of energy. And with good analysis from the likes of UCSD’s Tom Murphy showing that in 2004 oil production slowed and failed to increase much despite prices tripling, finding alternative fuels is key. But what most people don’t realize is that a chunk of the crude oil that goes into an oil refinery doesn’t end up anywhere near a car’s fuel tank. It ends up making chemicals.
A higher margin product
In 2011, the global market for petrochemicals was worth over $3 trillion, approximately the size of the entire U.S. government’s budget, and the feedstock for producing those chemicals is petroleum.  About half of that market is commodity chemicals that are low margin, but the other half is higher margin specialty chemicals like polymers that comprise plastics or substrates for pharmaceutical manufacturing.
The biofuels industry is working on producing transportation fuels through a process whereby a carbon feedstock like woodchips or sawgrass is fed to microbes to produce oil. But most of the biofuels companies that IPO’ed last year have been crushed in the market, and Amyris recently decided to scale back its biofuels production in favor of what else but manufacturing the specialty (and higher margin) chemical squalene.
So as some biofuels companies try to pivot toward specialty chemicals, which are lower volume and smaller market but with better margins, it’s worth taking a look at the potential to use microbes to manufacture chemicals from a feedstock other than oil.
Finding the right bio-chemical
I recently caught up with Charles Eggert, the CEO of Boulder, CO based OPX Biotechnologies, a bio-chemical startup that has raised $65 million from a number of VCs including energy focused Altira Group and cleantech friendly Mohr Davidow. OPX Bio is targeting the $10 billion global market for petro-acrylic, an ingredient in everything from paint to diapers, by generating the first biologically produced acrylic, so called “bio-acrylic.”
Eggert is unsurprisingly bullish on the bio-chemical market. He points out that while a less of the oil going into a refinery comes out a petrochemical than comes out a fuel, petrochemicals have much greater value in the market. Specialty chemicals have disproportionate margins and value, which is what makes them attractive. He also takes some solace in the fact that the massive scaling issues that have hampered biofuels are somewhat less of an issue for lower volume specialty chemicals and that many common chemicals from pharmaceuticals to amino acids are already produced biologically.
On the cleantech end, biochemicals are renewable, presuming you can access a widely available feedstock whose growth doesn’t harm the environment and doesn’t compete with the food supply as corn based ethanol does. But more importantly the process of using microbes to produce biochemicals doesn’t require heat and pressure, which are both needed in petrochemical processing. The bacteria that OPX uses operates near room temperature. Eggert says that producing bio-acrylic results in 75 percent less greenhouse gas emissions versus producing petro-acrylic. Additionally, large companies like Procter and Gamble have ambitious pledges, like targeting the replacement of 25 percent of all petroleum based materials with renewable materials by 2020. P&G is a significant buyer and seller of specialty chemicals for everything from detergents to cosmetics, and the option to by greener bio based chemicals could be an attractive option.
For a feedstock, OPX is currently using sugar, either from corn or Brazilian sugar cane. But ultimately the industry will need a non-food based sugar, often referred to as cellulosic sugar, which is derived from biomass materials like switch grass or energy cane.  Multiple companies, from BP to DuPont, are working on building large scale plants that can derive sugar from biomass sources.
Eggert told me that at commercial scale, making bio-acrylic is cost competitive with petro-acrylic. OPX will need to build a commercial scale plant and prove that it can get the same yield it’s produced at smaller scale, the critical scaling hurdle that every biochemical or biofuel company faces. It also has a joint development agreement with Dow Chemical, the largest U.S. producer of petroleum based acrylic, which Eggert reports is seeing demand from its customers for renewable biochemicals.
The building of a final production plant can often run a couple of hundred million dollars. “It’s not cheap,” says Eggert. “Which is why you need to make sure your process, your microbe, your engineering design are as efficient as they can possibly be.” And for the benefit of the biochemicals industry, let’s hope that the scaling goes faster and more smoothly than it’s gone for biofuels.

Question of the week

Are biochemicals a viable alternative to petrochemicals?

TeuxDeux: A Simple and Elegant To-do Service

Recently, I’ve been pondering the role that lists play in my life — from Twitter’s “playlists of people” to Umberto Eco’s thoughts on lists as a cultural tool for “facing infinity” to my own ideas about the use of “someday list” for lingering tasks — which should perhaps never be part of to-do lists anyway.

So it was with great excitement that I found Digitizd’s recent post, “9 Tools for Simple Productivity,” which highlights Fictive Kin‘s TeuxDeux, a bare-bones, elegantly designed and eminently usable list-based task manager, which also incorporates a “someday list.” (The post also discusses Ommwriter, a tool that was recently covered here at WWD).

TeuxDeux orients the user around days of the week, rather than the traditional task and priority view of most to-do applications. Each day is displayed as a column on a horizontally scrolling carousel; underneath each day is a simple text field and a list of things to do that day.

The simplicity and elegance of the user experience is striking and immediate — a running list of days, one-click editing and a separate list of “someday” tasks. Read More about TeuxDeux: A Simple and Elegant To-do Service

WWD Reader Profile: Jennifer Woofter, Sustainability Consultant

jenniferWho are you and what do you do?

My name is Jennifer Woofter and I run Strategic Sustainability Consulting (SSC). We’re a boutique consulting company that works with small- and medium-size organizations that want to “go green.” I spend about one-third of my time on billable sustainability consulting work (green audits, carbon footprinting, coaching and training) and about two-thirds of my time running the business — made up of three in-house staff, between four and six interns, and a freelance network of more than 450 sustainability experts.


What’s a typical day like for you?

I’m a night owl, and since I usually go to sleep in the wee hours, I’m rarely awake before 9 a.m. Since I work from home, that’s not a problem — I just walk downstairs to my office (stopping in the kitchen for a cup of coffee) and am ready to work by 9:05. Read More about WWD Reader Profile: Jennifer Woofter, Sustainability Consultant

Compete on a TV Game Show From the Comfort of Your Xbox

Quick: What’s the newest hybrid sensation that combines video games, television programming and social aspects? Is it:

X: 1 vs. 1oo on Xbox Live
A: Twittering With The Stars
B: Donkey Kong’s Digg for Dollars

1-vs-100-mobIf you said “X”, then you’d be right. Of course, savvy Xbox players might have been tipped off since the X, A and B controller buttons are used to answer questions in the Live version of 1 vs. 100. Microsoft (s MSFT) launched the game in late May, but I just got around to participating in a session last night. Players simply show up at the pre-scheduled “on air” time and play for free. In my 30-minute episode, over 15,000 people were logged on and collectively we were “The Mob.” Each of our Xbox Live avatars were shown in the mob and we could even control our virtual selves to a point; pressing the Y button repeatedly shows excitement, while moving the left stick can be used to taunt.

Unlike the original television show, you can answer questions incorrectly and still stay in the mob. You don’t, however, gain points for wrong answers and there are incentives for speed as well as answering consecutive questions correctly. The more incorrect answers in the mob, the more points you earn with a correct answer. Questions are answered in sets of 10 and during the commercial break, you can see how you stack up by viewing your stats.

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The Last Frontier for P2P VOD: Your Patience

Imagine you’re watching a movie via Internet-based VOD, one of those flicks you choose purely for the action scenes. Problem is, the dialogue is horrendous. What do you do? Skip ahead, of course. Such skipping can be a major technical challenge, however, especially if your VOD provider uses P2P technology to deliver its video streams. But five researchers from Spanish ISP Telefonica and UC Irvine have come up with a way to solve this problem.

The gang of five have developed a system called “Kangaroo” that promises to deal with jumpy VOD viewers by improving the architecture of the underlying P2P network. Kangaroo was field-tested during the 2008 Olympics, and its technology was presented at the 8th International Workshop on Peer-to-Peer Systems in Boston last week. While the details of this technology are admittedly a bit geeky, they help to understand illustrate why previous P2P VOD efforts like Joost and Babelgum failed and why smaller providers like Global Media Services/GridCast and MediaMelon need big content partners to make P2P work.

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Why I Jumped on the Blu-ray Bandwagon

I did it. I broke down and bought a Blu-ray player. In the middle of the worst recession of my lifetime, I spent nearly $300 on a gadget that I didn’t really need. And you know what? I love it. But not everyone is ready to make the jump to Blu-ray. So what’s holding them back? And what pushed me over the edge?
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The biggest factor for me was image quality. Since I made the move to an HDTV more than a year ago, I find myself increasingly unable to watch anything else. I tried to watch Tuesday’s Celtics-Bulls game on a 13-inch SD TV. By the time it ended, my eyes were watering and my head was pounding — and it would have been a lot worse had the Celtics not pulled off that overtime win.

I’ve been spoiled by my HDTV and I freely admit it. So when I would sit down to watch my regular old DVDs on my big-screen TVs, it always seemed that something was missing. And I have to respectfully disagree with the people who say they can’t see a difference between regular DVDs and Blu-ray discs. Without a doubt, I notice a difference.

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