Corporate cash lifts cleantech companies

Cleantech companies and their venture capital backers are increasingly looking to corporate investors to share the big bills of getting their products to market — and warning that those companies who can’t find one are unlikely to survive.

With government stimulus funds that buoyed the renewable energy and cleantech industries through the recession about to dry up, and traditional project finance and tax equity markets still closed, capital-intensive companies that are successfully raising money today have one thing in common: big corporate partners. While young companies have long partnered with big corporations to share technology and know-how, the attraction is now much simpler: their money.

Palo Alto-based electric carmaker Tesla Motors Corp., which recently executed a successful public offering, has Toyota and Daimler’s $100 million behind it. Solar thermal developer BrightSource Energy, based in Oakland, has Chevron Technology Ventures and BP Alternative Energy. Redwood City smart grid technology company Trilliant, which raised $106 million in July, has General Electric and engineering firm ABB. Electric car infrastructure company Better Place, which raised a massive $350 million at the beginning of this year, has a partnership with Nissan-Renault which is supplying cars to the company. The list goes on.

Stephan Dolezalek, who heads VantagePoint Venture Partners’ cleantech investments, said corporate partners are increasingly “critical” to these companies’ successes.

“For many companies, critical validation will be finding a partner that helps both address your capital needs … but also provides the validation that will allow pure financial investors to know where it’s safe to play,” Dolezalek said.

San Bruno-based VantagePoint has more than $1 billion invested in cleantech companies including a Who’s Who of capital intensity: BrightSource, Better Place, Bridgelux, MiaSole, Serious Materials, Solazyme, Tesla and Trilliant.

VantagePoint set up a formal “strategic corporate partner program” in 2003 that includes, BP, DuPont, Procter and Gamble, Schlumberger , BestBuy, Jabil and others. VantagePoint’s partners spend lots of time in discussions with that group as well as a number of other global corporations that could partner with their portfolio companies: WalMart, Chevron and ABB among them.

"If you step back and say these are all global companies and global markets — there is an awful lot of capital available globally. But it means that from a company perspective and investor perspective have to set your sites broader," Dolezalek said. "You have to do global investing and set yourself up with global partners."

Read the full story in the San Francisco Business Times.