Fallbrook CEO Says Latest Funding Reflects Near-Term Cleantech Prospects
Fallbrook Technologies CEO Bill Klehm was in South Korea two weeks ago, when the San Diego cleantech startup disclosed in a regulatory filing that it had raised an additional $4 million from investors.
I wanted to get more information about the deal, since it has only been a year since the developer of a new type of transmission raised more than $25 million in funding in an initial venture round led by NGEN Partners, a Santa Barbara cleantech venture firm, and Robeco, the investment arm of Dutch financial services firm Rabobank. It struck me as a little early for the company to require additional funding, particularly considering that Fallbrook was sustained over the previous decade by roughly $25 million provided by the company’s individual investors.
Fallbrook has been commercializing a continuously variable “planetary” transmission that is more energy-efficient than a conventional transmission. A little background on Fallbrook and its “NuVinci” design can be found here.
So what’s going down at Fallbrook?
“Basically, we had a group of mostly existing investors who had expressed an interest in increasing their investment in the company,” Klehm tells me. Because Fallbrook had kept its late 2008 venture round open, the CEO says the company’s existing investors could add to their stake on the same terms as a year ago. NGEN and Robeco accounted for half of the $4 million deal, and individual investors, which he estimates at between 80 and 100 families, represented the other half.
Klehm says the tranche reflects the “huge demand for high-quality deals in the cleantech sector.” While investor interest in cleantech is high, Klehm says many other cleantech technologies are expected to take decades to mature—or, as he likes to say, they are ventures made of “unobtainium”—advanced materials that don’t exist or are currently too costly to produce. While it could take years for the automotive industry to adopt Fallbrook’s innovative transmission, the company has introduced its technology to bicycles and electric carts and is moving to other applications.
For example, Fallbrook is moving ahead to commercialize its NuVinci transmission design for what Klehm calls an accessory drive that is used to run lifts, winches, and other equipment on military trucks and heavy commercial vehicles. “In 2010,” Klehm says, “there will be commercial volumes of that transmission being sold.”