Oregon's cleantech sector slows the pace

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Cathy Cheney | Portland Business Journal

Gregg Semler, CEO of Lucid Technologies, is finding it challenging to close a fundraising round as investors have cooled to cleantech. 

Portland cleantech startup Lucid Energy is attempting to raise a $6 million Series A funding round to grow its technology, which involves producing electricity from water pipes.

Though the early stage company, which relocated to Portland from Indiana a year ago, has received commitments for $4 million, CEO Gregg Semler said landing the final $2 million is proving more difficult than expected.

“Most cleantech VCs have shifted their focus to later stage deals and supporting their existing portfolios,” Semler said.

Lucid Energy’s challenges illustrate how the venture capital world has suddenly cooled on clean technology, which was once one of the hottest investment categories.

Global venture capital investments in cleantech are projected to fall to $6.8 billion this year, a 28 percent decline from 2011. It would be the lowest point for VC cleantech investments since the $6.2 billion invested in 2009.

At the same time, some of the biggest players are leaving the game.

Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers — which led a $25 million venture round for Tigard-based waste-to-fuel startup Agilyx Corp. in December — last month said it would slow down the pace of its investments in cleantech over the next four years.

Bradley Zenger, a principal with Portland-based cleantech-focused VC firm Pivotal Investments, said the shift is partly due to an ongoing restructuring within the entire venture capital industry, which is seeing a decline in both the amount of capital and number of people making investments.