Cleantech Funds Lead $25.4 Million Investment in Fallbrook Technologies

1/12/09Follow @bvbigelow

One good turn deserves another, and San Diego alternative transmission maker Fallbrook Technologies is ready to shift to the next level. After working more than 10 years to develop a radical new transmission design that helps motors operate more efficiently, Fallbrook announced today it has secured $25.4 million in its first round of venture funding.

NGEN Partners, a Santa Barbara cleantech venture firm, led the financing with a $10 million investment. Another $10 million came from Robeco, the investment arm of Rabobank of The Netherlands. The remaining $5.4 million came from many of the company’s true believers, the angel investors who provided some $25 million in private funding to Fallbrook since the company was founded in 1998.

The additional funding is intended to help Fallbrook gear up and extend the commercialization of its proprietary “NuVinci” technology, a continuously variable “planetary” transmission that smoothly adjusts to increasing speeds without the need to change gears. A more detailed explanation is here.

Fallbrook introduced its transmission in markets for light electric vehicles and bicycles in 2006, and the company says market acceptance has increased steadily—especially in Europe. The company says a NuVinci-equipped bicycle won “Bike of the Year” in The Netherlands and the iF Design EUROBIKE Gold 2008 Award—which helps explain why the Dutch investment bank’s cleantech fund is in the deal. NGEN managing director Steven Parry says in a statement that his firm’s “investment in Fallbrook reflects our commitment to help companies who are leading the way to a more sustainable energy future.”

“What they saw in us was that they were not financing some science project, but real-world, commercial applications of our technology,” Fallbrook CEO Bill Klehm told me. Closing a $25 million financing in this time of capital constraints in itself represents recognition of the technology’s potential, he added, and the transmission itself can be easily manufactured. “This device is not made of unobtanium,” Klehm says.

Fallbrook’s strategy, bolstered by approximately 300 patents or pending patents the company holds on its transmission technology, is to license its design to manufacturers in a variety of industries. And the new venture deal enables the company to expand the use of its NuVinci design for use with other types of motors in cars, tractors, military vehicles and even wind turbines, Klehm says.

The NuVinci transmission is ideally suited to improving the performance of electric motors, which are generally inefficient under loads—especially in start and stop conditions, Klehm says. He told me that incorporating Fallbrook’s NuVinci technology into an electric vehicle can lead to a 30 percent improvement in the vehicle’s range and battery life.

He also sees applications in the automotive aftermarket, especially for use with “accessory drives,” the secondary systems, such as air conditioners, that drain engine power in all vehicles. Such systems especially tax the efficiency of work vehicles like garbage trucks, military and emergency vehicles.

A garbage truck, for example, typically must speed up its engine idle to accommodate the power demand of the secondary motor that lifts trash cans from the curbside and dumps them into the truck. With a Nuvinci system on the accessory drive, Klehm says no increased engine speed is necessary—which would reduce emmissions and improve overall fuel economy.

“You could put our transmission on a 190-amp alternator and see a 34 percent improvement in energy output by the main alternator over a typical drive cycle, and a 78 percent improvment at engine idle,” Klehm says. Now, if only Fallbrook’s technology could also keep the trash from occasionally missing the truck and spilling into the street.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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