Dollar Shave Club raises $9.8 million for international expansion

Dollar Shave Club, the seemingly too-good-to-be-true promise of razors every month for only $1, has raised almost $10 million in a Series A funding round for international expansion (with Canada to start), and growth into other men’s product verticals, although they wouldn’t say which ones.

Today in Cleantech

There’s an interesting post from Venrock Capital’s Matthew Nordan regarding the correlation of natural gas pricing with demand response compensation for frequency regulation. The overall point Nordan is making is that demand response players like EnerNOC and PowerSecure have been undervalued precisely because natural gas prices have been so low. For a utility, the major value of demand response is in avoiding having to turn on a natural gas peaker to provide the marginal megawatts of electricity during high demand. If natural gas prices are low, the cost of doing that remains relatively low and the value of demand response, which would have the grid turn down demand rather than have the utility turn up supply, is in turn low. But natural gas prices are creeping up, and I’ve written that with LNG exporting on the horizon, cheap natural gas won’t last forever. Which is why Nordan think the value of demand response companies will rise soon as the prospect of natural gas peakers gets less and less attractive for utilities. Nordan makes the additional point that if GDP can continue to bounce back, electricity use will itself rise, creating further need for demand response. With all the carnage in the solar industry and the IPO troubles in cleantech, investors sure could use an energy technology sector to get excited about.

Today in Cleantech

Venrock Capital’s Matthew Nordan has an excellent analysis of the evolution of natural gas pricing over the past as the price plummeted due to disruptive drilling technology—hydraulic fracking and horizontal well drilling. The new tech combined with the discovery of extensive shale gas deposits drove the price down to where it is right now, about $4.5 $2.11 per mbtus, versus where it had been, about $7 mbtus. I mention this because Nordan makes a point that I’ve made before, which is that everyone in the renewable energy sector should be paying very close attention to the price of natural gas.  As utility power generations shifts to natural gas, as well as some transportation like long haul trucking, the levelized cost of electricity (LCOE) will drop, as much as 15 percent according to Nordan’s calculations (battery powered transportation will also become less attractive). It will become even harder for wind and solar to compete. I’ve written about it recently, but the basic point is that Obama is very much in favor of natural gas and if we’re going to bet the ranch on natural gas and we also want to do something about climate change, the government will need to make a very significant technology and research investment in non-carbon emitting forms of energy.

Algae startup Sapphire Energy raising $144M

Algae biofuel is getting a massive infusion of money. Startup Sapphire Energy, which uses synthetic biology to make a green crude out of algae, announced on Monday that it’s raising $144 million in a Series C round from investors including agriculture company Monsanto.

Today in Cleantech

The second of a four part post series on earth2tech from Matthew Nordan, an energy investor at Venrock, is an excellent debunking of the myth that cleantech venture investing is a bad bet. The most striking aspect of his analysis is that cleantech companies actually take less time to IPO than general VC and that cleantech has had more IPOs relative to invested capital. I still think there are concerns right now over the quality of those IPOs, but it’s hard to argue that cleantech is underperforming overall VC in terms of time to exit or return on investment. What is of greater concern right now is the slowdown in early stage funding as more deals appear to be getting done by VC firms eager to shepherd their initial investments to a final exit, but less interested in seeding new ideas.