Here’s another data point for New England cleantech investors. Coskata, a Warrenville, IL-based developer of cellulosic ethanol, has filed paperwork for an initial public offering. The proposed maximum offering is $100 million, but as usual, that doesn’t mean much at this point.

Coskata is backed by a couple of Boston-area venture firms—Advanced Technology Ventures and Greatpoint Ventures. ATV (owning 17.7 percent) and Greatpoint (15.6 percent) are the third and fourth largest stakeholders in the company, behind Khosla Ventures and Blackstone Group. General Motors is also an investor in the company. Coskata has raised more than $80 million in VC funding since 2008 but isn’t making money yet.

It’s a difficult climate for biofuels companies. Nevertheless, Coskata isn’t the only one testing the IPO market. Lebanon, NH-based Mascoma filed to go public in September. Mascoma, which is building a cellulosic ethanol refinery in Michigan, is backed by another pair of Boston-area VC firms, Flagship Ventures and General Catalyst, as well as Khosla Ventures.

Comments | Reprints | Share:          

It seems doubtful that the U.S. Navy has ever gotten as much media attention for offshore cruising between San Diego and Port Hueneme as the decommissioned destroyer Paul H. Foster received last week.

The Spruance-class destroyer, which has been refitted to serve in various ways as an ocean-going test platform, arrived at the naval base near Oxnard, CA, about 185 miles north of San Diego, Thursday morning after a 17-hour transit powered by a fuel blend that included algae-derived biofuel. It was the Navy’s largest alternative fuel trial.

The overnight sojourn was intended as a demonstration of the Navy’s plan to expand the use of “drop-in” biofuels that would require no changes to Navy engines, ships, supply infrastructure, or fueling piers. The only difference is that the biofuel was derived from algae, or “green crude,” instead of conventional fuels made from petroleum-based crude. (A pretty good account of the demonstration is here.)

San Francisco-based Solazyme provided the algae-based biofuel, which can be produced in its U.S.-based facility in a few days, according to Stephanie Tabor, a spokeswoman for the company. “We use standard industrial fermentation equipment to efficiently scale and accelerate microalgae’s natural oil production time to a few days,” Tabor says in an e-mail this afternoon. Solazyme’s technology is flexible, she says, “and can utilize a wide variety of renewable plant-based sugars, such as sugarcane-based sucrose, dextrose, and sugars from other sustainable biomass sources including cellulosics.”

As we reported last year, the Navy has decided for reasons of energy security, naval strategy, and environmental stewardship to develop and certify alternative fuels that can be used instead of standard-issue ship and aircraft fuels.  Navy Secretary Ray Mabus has announced a goal of conducting a test exercise next year with a “Great Green Fleet”—a 13-ship carrier battle group powered either by nuclear energy or 50-50 blends of biofuels, based on press reports.

The Foster took on about 20,000 gallons of diesel biofuel that Solazyme delivered to the Defense Fuel Supply Point at Naval Base Point Loma. It was blended 50-50 with a standard naval marine diesel known as F-76 (a NATO specification), and used in gas-turbine engines aboard the Foster that are equivalent to engines in U.S. destroyers and cruisers around the world.

“For our program with the Defense Logistics Agency,” Tabor says, “we are supplying the U.S. Navy with renewable F-76 diesel fuel and renewable JP-5 jet fuel for testing and certification.”

Comments (6) | Reprints | Share:          

Big news today in New England cleantech—a sector that could certainly use some positive developments. Lebanon, NH-based Mascoma, a biofuels firm that plans to break ground on a cellulosic ethanol plant in Michigan later this year, has filed for an initial public offering. In its SEC filing, Mascoma says it intends to sell up to $100 million worth of shares in its IPO, which is being underwritten by Morgan Stanley, UBS Investment Bank, and Credit Suisse. (The $100M figure doesn’t mean much at this point, though.)

A number of big venture firms are investors in Mascoma. Among them are Khosla Ventures (which owns 17.5 percent of the company), Flagship Ventures (8.7 percent), General Catalyst (8.3 percent), and Kleiner Perkins Caufield & Byers (7.2 percent). But the largest owner is SunOpta (NASDAQ: STKL), a Canadian food and mineral company that has gained a 20.6 percent stake in Mascoma, mostly through a $51 million merger a year ago. As of the fall of 2009, the company said it had raised about $100 million in private equity and another $100 million in government grants and loans.

Mascoma started in 2005 out of Dartmouth College and is led by CEO Bill Brady. The company has developed a process for producing ethanol from non-food plants such as wood chips and grass. So far it’s not profitable. Mascoma made $15.5 million in revenues in 2010, but had a net loss of $25.9 million. For the first six months of 2011, the firm made $6.7 million in revenue and had a net loss of $14.5 million.

Xconomy first profiled Mascoma in 2009, when the startup gave us access to its lab facilities in New Hampshire. We also wrote about the company’s plan for its Michigan operations last year, with a major update early this year.

Comments (2) | Reprints | Share:          

South San Francisco-based LS9, the developer of renewable fuel technology, said today it has awarded a $9 million grant from the U.S. Department of Energy, along with its partner, Oxford, NC-based HCL Clean Tech. The money will be used to convert cellulosic biomass into fermentable sugars and then diesel and other chemical products, LS9 said. The grant was part of a broader $36 million program the Department of Energy is running in six states, according to a statement last month from HCL.

Comments (2) | Reprints | Share:          

After maturing into a steady software company with a mammoth organizational chart, Microsoft is the source of plenty of eye-rolling in the world of tech upstarts—hometown fans included. But every so often, you see a glimpse of what the Redmond, WA-based tech titan could do if its energy was directed just right.

We’ve certainly seen that kind of promise with Microsoft’s big acquisition of Skype, and at the Microsoft NERD center in Cambridge, MA, folks were treated to a fascinating look at the future from Qi Lu, the company’s head of online services. As Xconomy’s Greg Huang details in this report, Lu’s talk touched on several areas—deals, social, mobile—where Microsoft wants to dominate. Also check out the transcript of our exclusive interview with Lu.

The rest of the past week’s tech news:

—Back out west, Microsoft scored a little coup right in Google’s back yard by landing a multimillion-dollar contract to handle cloud e-mail services for San Francisco’s city and county government. It’s not a big moneymaker for someone the size of Microsoft, but getting the city hall crowd in America’s tech capital to pick your service over the hometown offering is a big PR win.

—Google came north to do a little shopping, acquiring consumer electronics shopping startup Sparkbuy for undisclosed terms. Sparkbuy had barely taken the covers off its service, which used online travel-inspired customization tools to help shoppers find laptops and TVs—making this look pretty clearly like a talent acquisition. The Sparkbuy team will be joining Google’s Kirkland, WA office.

—Speaking of talent, we had two more entrants in what might be this year’s overarching story in tech: The lack of qualified hires to fuel growth. I’ve covered this story a few times already with reports on the overall job climate and individual California companies making aggressive hiring moves, but there’s more ground to cover. In this week’s roundup, we have a sharp analysis from guest columnist Ed Lazowska and a study from job-search site Dice, which took a national look at which states have big shortages of tech talent.

—Xconomy had another great event here in Seattle, bringing together leaders in the cleantech sector to talk about the future of alternative fuels in the U.S. The speakers on our main panel all have deep experience in the science and business of trying to disrupt oil’s dominance as the world’s primary fuel, and sparked some really interesting conversations. Also—a photo gallery!

—Clearwire (NASDAQ:CLWR) took another step away from its original business plan, handing over management of its 4G wireless network to Ericsson—the company that also manages the network of Sprint (NASDAQ:S), Clearwire’s majority shareholder. There’s been an enormous amount of change at the Kirkland, WA-based company in just the past six months or so. It’ll be really interesting to see what interim CEO John Stanton and crew have in store for the rest of 2011.

—Zaarly is technically based in San Francisco, but has strong Seattle connections: co-founder Eric Koester is based here. So naturally, Zaarly picked Seattle as one of the original cities for the crowd-buying service’s kickoff.

Comments | Reprints | Share:          

Even though the sun was finally out in Seattle, dozens of folks from the worlds of cleantech, life sciences and high tech got together to share thoughts and network at Xconomy’s latest event, “Separating Hype from Reality in Alternative Fuels.”

Our panelists and presenters dove into the past and future of biofuels, the need for balanced public policy, the promise and reality of electric vehicles, how the Pacific Northwest can drive innovation in airline fuels, and much more.

For a recap of the major themes touched on by our panelists, you can check out my wrapup of Thursday night’s discussion. We’ve also put together this photo gallery of some sights from the program, captured by Vinh Chung of Total Effects Video.

We also must thank our underwriters, partners and sponsors, without whom our events wouldn’t be possible. The Institute for Systems Biology was the host, the Washington Clean Technology Alliance was our partner, and Mixtur was our design sponsor.

Our valued underwriters were Alexandria Real Estate Equities, Christensen O’Connor Johnson Kindness, Cooley, Davis Wright Tremaine, Fenwick & West, Graham & Dunn, the ISB, Invest Northern Ireland, J. Robert Scott, Kauffman Foundation, Latham & Watkins, the Science and Technology Directorate of the U.S. Department of Homeland Security, Seed IP Law Group, and Swedish Medical Center.

And our venture capital members for this event were ARCH Venture Partners, Vulcan Capital, and WRF Capital.

Comments | Reprints | Share:          

We had a great time at our latest Xconomy Seattle event, “Separating Hype from Reality in Alternative Fuels,” held last night at the new Institute for Systems Biology headquarters in Seattle’s South Lake Union neighborhood.

The presenters sketched some meaty ideas about the drive to develop oil alternatives, challenged a bit of conventional thinking, and got the audience to dive in with great follow-up questions. Here are a few of the big themes that emerged as Luke moderated the main discussion with Ned David and Kristina Burow of Arch Venture Partners—two of the co-founders of San Diego-based Sapphire Energy—and Margaret McCormick, the co-founder and CEO of Seattle-based Matrix Genetics. If you want to see some images from the event, check out this Flickr gallery from Vinh Chung of Total Effects Video.

—Biofuels 3.0: David pointed to the U.S.’s last two attempts to develop biofuels—after the 1970s energy crunch and in the mid-2000s, when national policy ramped up the production of ethanol. Neither of those eras, of course, have delivered much in the way of energy independence.

David said the 1970s saw the first big effort to cultivate algae as an alternative fuel source, but that fell short because the technology wasn’t advanced enough to get results. That wrongly led many to believe that algae wouldn’t work, he said.

The ethanol boomlet of the past decade was the 2.0 wave of biofuels for this country, but that hasn’t produced anything like what all those optimistic politicians pledged at the outset. “Forty percent of the U.S. corn crop goes to replacing 8 percent of our transportation fuel,” Burow said. “That is not sustainable.”

At present, David said, we’re in the 3.0 phase of U.S. biofuels. Algae was a big focus of this particular discussion, since all three of our panelists have direct experience with that field. With projects like Sapphire Energy’s drive to put a huge algae-fuel production facility in the Mexican desert, you’re seeing “the first building blocks of world-scale capability” for these fuels.

“I think that microorganisms can solve most of the problems of the world. If you go back, it was alcohol or it was cheese,” McCormick said. “There’s so much potential that can be harnessed out of these microorganisms and the DNA that’s in them, and we can look at them to solve all kinds of problems.”

—High stakes, but no quick fixes: McCormick said the latest phase of alternative fuels work is not purely driven by an economic need to reduce spending on oil, but is also by the need to address climate change and national security issues.

Burow added a fourth factor: “This has got to work. By 2020, we’ll have increased our need for energy by 40 percent as a world. And there’s simply no way to meet that increase without these types of alternative fuels.”

At the same time, Burow said, the cycle for developing such culture-shifting technologies is still much slower than we expect from other areas of innovation. “This isn’t Twitter. This isn’t … Next Page »

Comments (4) | Reprints | Share:          

A chat with the nation’s first chief technology officer was one of the highlights of the past week in tech news. Aneesh Chopra, President Barack Obama’s CTO, is in town this week for a panel discussion at the Technology Alliance’s State of Technology luncheon. He had lunch with local corporate execs yesterday, and we published this interview that touched on just a couple of the administration’s main topics: Why innovation is primed to take off in healthcare, and how the new Startup America Partnership can help the private sector develop strong infrastructure for new companies.

Elsewhere in Seattle-area tech news from the past week or so:

—I profiled startup Pinpoint Pickup, a towncar-booking app that has bootstrapped its way to services in seven cities. This all comes as competitors like San Francisco-based Uber get tons of press and millions in investment, all without anything near the scope of expansion that Pinpoint has achieved.

—Xconomy’s Greg Huang checked in with Charles River Ventures about the firm’s stake in Intellectual Ventures, the intellectual property machine founded by former Microsoft CTO Nathan Myhrvold. Charles River Ventures has put a whopping $300 million into Intellectual Ventures. Partner Izhar Armony says more investors would get into the developing market if they weren’t convinced that IP is “a dirty world controlled by lawyers.”

—Like just about everybody in the local startup scene, I swung by the Seattle 2.0 Awards. It was an interesting mix of celebration and navel-gazing (the good kind), punctuated by an energetic keynote speech from California VC Mark Suster—lots of F-bombs, a Public Enemy reference, and even a bit of aggressive crowd control. Also featured: Rampaging mascots.

—There were a couple of acquisitions to report, both on the same day. BuzzLabs, a member of Seattle’s burgeoning social media cluster, was snapped up by CityGrid Media, a unit of Barry Diller-headed IAC. BuzzLabs works on social media monitoring, helping other companies sort through the tons of things people are saying about them online. The other deal involved Seattle’s Smashing Ideas, a 15-year-old digital media and marketing company. It was acquired by Random House, the publishing unit of Bertlesmann AG. Terms were not disclosed for either deal.

—Finally, two bits of Xconomy news. We have a recharged Facebook page, to which we’re adding photos, stories, and all the other goodies you’d expect—with more to come. And it comes with a promise: No spam. We’re selecting three of our best stories throughout the day to push through Facebook, so we won’t clog up your feed with every last tidbit. We’ve also added more horsepower to our upcoming event, “Separating Hype from Reality in Alternative Fuels.” Kelly Ogilvie from Blue Marble Energy joins folks from Harvest Power, General Biodiesel and more as we sort through the opportunities for this industry in the years ahead.

Comments (1) | Reprints | Share:          

We’ve got biofuel on the brain here at Xconomy as we prep for our next big event.

—Boeing and Alaska Airlines are taking the lead on a regional network that wants to turn the Northwest into a hotspot for biofuel production by growing the plants, refining the oil, transporting, and consuming it all locally to fuel airplanes. The final recommendations of the Sustainable Aviation Fuels Northwest group is expected out in early May.

—We’re gearing up for the next big Xconomy event, “Separating Hype from Reality in Alternative Fuels,” on May 19 at the Institute for Systems Biology’s new headquarters in South Lake Union. John Gardner of Washington State University will be on hand to give a presentation and field questions about the plan, and we will also hear from a couple of leaders in the algae biofuel business—Kristina Burow, a co-founder of Sapphire Energy, and Margaret McCormick, the chief operating officer of Targeted Growth and a co-founder of Matrix Genetics.

—Seattle Genetics (NASDAQ: SGEN) expanded its alliance with Denmark-based Genmab to develop one more souped-up antibody against cancer. Seattle Genetics is getting an undisclosed upfront payment, and has retained an option to co-develop and co-market the new drug candidate Genmab has its eye on.

—The biotech industry is concentrated in a few hotspots on the U.S. map, but this week in the BioBeat column, I argued that it makes sense for companies to do more to connect with small towns and rural America.

—The Life Sciences Discovery Fund, the state fund designed to support biotech R&D projects with commercial potential, is once again finding itself in a tight spot, as the state wrestles with yet another daunting shortfall. Two years ago, the state cut 41 percent of the fund’s budget, and the cuts could go even deeper this time.

—I knew Stewart Lyman had really mastered the guest editorial thing when he turned in his latest piece with the following headline: “Why Do I Love Drug Regulation? Simple: It Keeps Us Safe.” Lyman, as usual, has lots of links and data to back up his argument, and it has sparked a healthy debate among readers about exactly what kind of drug regulation the country ought to have.

—Lastly, Ken Stuart of the Seattle Biomedical Research Institute urged members of the community to rally behind what he says is a great investment opportunity—investing in science education of young people.

Comments (3) | Reprints | Share:          

Energy independence and reducing greenhouse gas emissions were big issues in the last couple Presidential elections. Yet, if you look around town in 2011, it’s still the norm to see people filling up inefficient cars with gasoline from non-renewable sources, at a cost of about $4 a gallon.

Lots of entrepreneurs are pursuing dreams of creating cleaner, more cost-effective alternatives to traditional fossil fuels. Biodiesel, ethanol, algae fuel, hydrogen, liquid natural gas, etc. all get a fair bit of attention, but none of those options have broken out into mainstream usage.

It would be easy to write off the movement as a lot of hype and turn the page, but I don’t think the story is that simple. That’s why we are organizing our next big Xconomy Forum on “Separating Hype from Reality in Alternative Fuels” in Seattle on May 19th.

The stakes in this business are about as high as they get: Cleantech was minted by venture capitalist John Doerr a few years ago as the greatest opportunity of the 21st century. The global energy and transportation market is about as big as any market in the world, worth an estimated $7 trillion a year. Despite all the talk, what kind of progress is really being made with alternative fuels? How far has the field come? How far away is biofuel from becoming a mainstream alternative to fossil fuel? What needs to happen in order for this promising sector to reach its potential?

I plan to moderate a keynote chat to cover these issues with a couple of leading thinkers in this field of science and business—Kristina Burow of Arch Venture Partners, who co-founded San Diego-based Sapphire Energy, and Margaret McCormick, the chief operating officer of Seattle-based Targeted Growth, and a co-founder of a new algae-based biofuel company in Seattle called Matrix Genetics. Tom Ranken, the president of the Washington Clean Technology Alliance, will provide some opening remarks, and I’m planning to add a number of short “burst” talks from top West Coast entrepreneurs with interesting approaches to the alternative fuel business. And, as always, we will leave time at the end for the top-notch networking that is a hallmark of Xconomy events.

I’ll be sure to post more updates on key details about this event, such as the location and names of new speakers, as we get closer to game day on May 19th. For now, I’d encourage readers to save the date on their calendars and check out the registration page to book yourself a seat.

Comments (3) | Reprints | Share:          

The way Neil Senturia talks about his “rules” for entrepreneurship reminds me of the way the Pirates of the Caribbean adhere to the pirate code—which is to say the code of conduct among buccaneers is really more what you would call guidelines than actual rules.

Senturia describes his rules as immutable and inviolate. But if you listen, you can hear him concede that there might be some exceptions, and after that maybe if you break a rule of entrepreneurship every now and then, so what? I mean, just between you and me, what’s going to happen? Are the startup police going to come and arrest you?

Nevertheless, Senturia has been around this town for a long time, and he’s had his successes, culminating in a series of San Diego startups—some good and some not so good—and enough money for an office in La Jolla and a little startup fund that he calls Blackbird Ventures. So he might have some worthwhile advice in there somewhere.

Senturia started his career close to 40 years ago, writing TV scripts in Hollywood and jokes in Las Vegas. There is still a Woody Allen-doing-standup quality to just about everything he does, or maybe it’s more like Henny Youngman in the Poconos because sometimes his jokes are so old. After a decade in Hollywood, Senturia found a second career in Southern California real estate and development. He did some big deals, including one in downtown San Diego that created the twin tower condominiums across the street from the San Diego Convention Center. He started his first Internet company, Atcom, in San Diego in the early 1990s—and he rode the dot com wave like Duke Kahanamoku all the way to the beach. Now Senturia is the CEO of a company developing synthetic liquid fuel “with zero-to-negative carbon impact,” whatever that means. He tells me he can’t talk about it, but then he does.

I always wanted to ask him why he ever thought he could start a synthetic fuel company or an Internet company in the first place, and I finally got a chance to do just that. Senturia recently self-published a business book about entrepreneurship that he wrote in his inimitable way. He says the book is really about how to live your life, because “how you behave reflects how you think, and it matters.” The title of his book is “I’m There for You Baby: The Entrepreneur’s Guide to the Galaxy”—and already I’m pretty sure he’s exaggerating. The book has been out about a week, and already there is a used copy available on Amazon. I quizzed him about the book and his career, and I have condensed and edited our conversation.

Xconomy: When you started Atcom, what made you think that you could run an Internet company? Did you know anything about computers at the time?

Neil Senturia: I knew how to turn them on! More importantly, I knew what a client-server was. I thought it was a waitress. They talk about client-server architecture, and I’m thinking, “OK, just bring me a menu.”

X: I have the same question, essentially, about your latest venture. What makes you think you know anything about biofuels?

NS: I don’t have to know anything about biofuels. What I have to know is how to build a team, and motivate them, and bring out the best and brightest and have them be successful. You’ve asked a really important question. There’s a little bit of chutzpah and arrogance that says you built 2 million square feet of real estate, but what the fuck Jack, what do you know about a computer? You’re not in Silicon Valley. You’re not a computer scientist. You can’t write code. But as a CEO, I don’t think you have … Next Page »

Comments | Reprints | Share:          

Cambridge, MA-based Joule Unlimited, a biofuels technology company, announced today it has been granted a U.S. patent for an engineered bacterium that produces liquid hydrocarbon fuels from sunlight and carbon dioxide. The company says it is the first to patent a direct, single-step, continuous process (based on photosynthesis) for producing hydrocarbon fuels without using raw material feedstocks like sugar or corn, or other intermediate steps. Joule says this process could be made cheap enough, and could be employed at large enough scale, to help replace fossil fuels. The news was first reported by the New York Times; a CNET report also has some useful context. Other companies in the biofuels technology sector include Amyris Biotechnologies, Aurora Algae, Bio Architecture Lab, LS9, Sapphire Energy, Synthetic Genomics, and Targeted Growth. Joule says it will begin pilot production of diesel fuel by the end of this year.

Comments (1) | Reprints | Share:          

A rising star of the Boston-area venture capital scene is in Seattle today. He’s David Berry, a partner with Flagship Ventures, and he’s speaking on a panel tonight that will tackle a question on every young company’s mind, when it comes to financing: to VC or not to VC? The event is organized by the MIT Enterprise Forum, and the other speakers will include Jonathan Sposato from Picnik (a bootstrapped startup recently acquired by Google); Mark Ashida from OVP Venture Partners; Michael Butler from Cascadia Capital; and moderator Chase Franklin from Daptiv (the former CEO of Qpass).

Berry’s background is quite different from the other panelists—and from most VCs. He graduated in 2005 with an MD-PhD from Harvard and MIT, where he studied bioengineering under professors Ram Sasisekharan and Robert Langer. Flagship Ventures stole him away from an academic career to work on building new companies and developing technologies in energy and therapeutics. He has since co-founded LS9, a Silicon Valley-based synthetic biology firm developing new fuels and chemicals, and Joule Unlimited (formerly Joule Biotechnologies), a Cambridge, MA-based startup that’s using genome engineering to create other types of clean fuels. (Given the strong interest in biofuels and renewable chemicals in the Northwest, Berry has plenty of connections out here.)

When it comes to advising entrepreneurs, Berry is frank about the alternatives to venture money. “It’s unusual for a VC to say venture capital is not always the best choice,” Berry told me by phone yesterday. “But with venture capital firms folding, you have to know where your money is coming from. While money is fungible, long-term money isn’t.”

Here are a few edited highlights from my chat with Berry:

—On his general advice to entrepreneurs:

“At some point you do need capital. There are ways where you can get government grants and so forth. In certain areas you can get some revenues to offset capital needs. As [entrepreneurs] think about where they want to go, the real question is who are the best partners to have along the way, to build the company. That means someone who’s not only trusted around the board table or as an advisor, but someone who will challenge you and push back and make sure you’re thinking strategically in the best way possible.

“From our end [Flagship], we invest in the beginning of a company—the two most important assets are its people and its IP. We care about having the best people around the table, entrepreneurial people who want to solve big problems. Also, people who have a very interesting approach to that—differentiated technologies that are IP protected, and that have some degree of validation.”

—On alternatives to VC in energy and biotech:

“Venture has played a bit of a mainstay role as of late. In energy, there are sovereigns and private wealth holders which have played significant roles—Temasek, and Masdar has been quite active … Next Page »

Comments (1) | Reprints | Share:          

Propel Fuels, the alternative fuel company founded in Seattle but now based in Sacramento, CA, announced today it has raised $12 million in Series C equity financing led by new investor Craton Equity Partners, along with $8 million in debt financing. Previous investors Nth Power and @Ventures also participated in the equity round. The money will be used to help Propel expand its network of fuel stations around California. The company currently owns and operates 11 stations around Seattle and Sacramento, selling ethanol and biodiesel fuels.

Comments | Reprints | Share:          

It was a quiet week for deals in the Northwest—too quiet. Maybe companies are steering clear of breaking news so they don’t get drowned out by all the big quarterly earnings news and Apple’s much-anticipated product announcement tomorrow. Probably there’s a storm coming.

—Ryan took us inside a major partnership between Bothell, WA-based Seattle Genetics (NASDAQ: SGEN) and Millennium in Cambridge, MA. The deal, which we originally reported last month, calls for Millennium to sell Seattle Genetics’ experimental drug for Hodgkin’s and other lymphomas in all markets outside the U.S. and Canada. Millennium, which began a research collaboration with Seattle Genetics back in 2003, is acting as the Bothell firm’s global development and marketing partner, thanks to Millennium’s global parent company, Japan-based Takeda Pharmaceutical.

—Wade reported that Harvest Power, a Boston-area renewable fuels company that has operations in Seattle and Vancouver, BC, has formed a partnership with Waste Management (NYSE: WM), the Texas-based waste hauling giant. Waste Management has invested an undisclosed amount to help Harvest Power expand to more cities, starting with the East and West Coasts.

—Dow Jones VentureSource broke out VC data for Washington state in the fourth quarter of 2009, as Bruce reported. The venture dollars invested shot up almost three-fold in the quarter, when $239.4 million was invested in 25 companies, compared with the same quarter in 2008, when less than $85.6 million was invested in 18 companies. For all of 2009, however, Dow Jones showed a 9 percent decline, with $793.4 million invested in 107 companies, as compared to $875.6 million in 97 companies the prior year.

—Bellevue, WA-based Motricity, a software firm that helps wireless carriers and media companies deliver mobile data services to customers, filed a form S-1 with the SEC, saying it plans to sell up to $250 million in an initial public offering. The company was founded in 2001 and is backed by more than $400 million in venture funding; it moved headquarters from North Carolina to Washington following its $135 million acquisition of the mobile services unit of InfoSpace (NASDAQ: INSP) in 2007. Motricity generated revenues of $117.1 million in the 12 months ending on September 30, 2009, but is not profitable.

—Lastly, we had a fascinating guest post from entrepreneur Jasper Kuria, a former Microsoftie, on the reasons behind the “evil” term sheets that VCs negotiate with startups they want to fund, and the ensuing strategy discussions about company growth and exits.

Comments | Reprints | Share:          

Seattle-based AltAir Fuels announced yesterday it has signed agreements with 14 airlines to negotiate the purchase of up to 750 million gallons of camelina-based jet fuel and diesel. AltAir plans to produce the biofuels at a new facility in Anacortes, WA, which is slated to open in 2012. The participating airlines (which entered into a memorandum of understanding) are American Airlines, Air Canada, Alaska Airlines, Atlas Air, Delta Air Lines, FedEx Express, Hawaiian Airlines, Jet Blue Airways, Lufthansa German Airlines, Mexicana Airlines, Polar Air Cargo, United Airlines, UPS Airlines, and US Airways. AltAir Fuels was formed in 2008 to produce jet fuel from renewable and sustainable oils.

Comments | Reprints | Share:          

Seattle-based Imperium Renewables said it has shut down operations at its Grays Harbor biodiesel plant in Hoquiam, WA, following an explosion of a 10,000-gallon glycerin processing tank yesterday afternoon. No injuries were reported, and there was no fire. The cause of the blast is still under investigation, but the company says the rupture was caused by over-pressurization of the tank. Two adjacent tanks containing biodiesel and other materials, including sulfuric acid, were damaged as well.

Comments (1) | Reprints | Share:          

It was a fairly busy week for deals heading into the Thanksgiving holiday. The Northwest saw some action across aviation, alternative fuels, wireless, software, and biotech.

—Kent, WA-based Naverus was acquired by GE Aviation, an operating unit of General Electric (NYSE: GE). Terms of the deal weren’t disclosed. Naverus, founded in 2003, makes aviation navigation technologies that help make airline flight paths faster, safer, and more fuel-efficient.

—Seattle-based Bio Architecture Lab, a startup using synthetic biology to make alternative fuels and chemicals, has raised $8 million in its first round of venture financing, as Luke reported. The investors include Energy Capital Management, the venture arm of Norway-based Statoil; Chile-based Austral Capital; and X/Seed Capital of Menlo Park, CA. Bio Architecture Lab has also scored a partnership with DuPont to make biofuels from ocean seaweed.

—Bellevue, WA-based Root Wireless closed a $3.25 million Series B funding round, co-led by investors Fred Warren and Oliver Grace, Jr. Existing investors in the company include Scott Anderson, Jack Roberts, and John Stanton, all of whom participated in the latest round. Root Wireless makes technologies that analyze and map the performance of cellular networks and devices in eight metro areas around the country, with 12 more in the works.

—Infinia, the Kennewick, WA-based developer of solar power technology, raised $2.6 million in new financing from equity and options, as Luke reported. This means Infinia has raised about $13 million this month in debt and equity (including $10 million in short term debt), largely from existing investors, according to CEO J.D. Sitton. Infinia is generating electricity by collecting and focusing heat from sunlight and using it to drive a Stirling engine.

—Seattle Genetics, the Bothell, WA-based cancer drug developer, will receive a $12 million upfront payment from Agensys, an affiliate of Japan-based Astellas Pharma, under a renegotiated partnership to make targeted and more potent antibody treatments, as Luke reported. Seattle Genetics (NASDAQ: SGEN) formed its first partnership with Agensys in January 2007. The new deal allows the companies to collaborate on new targets of cancer drugs.

—In our second monthly installment of “under the radar” deals, I detailed 12 Northwest company financings under $1 million from October. The data comes from ChubbyBrain, a New York-based company building data-driven tools for investors and entrepreneurs. Some of the companies highlighted were Portland, OR-based Zapproved, and Bellevue, WA-based Intellisist and 1000Museums.

—Seattle software company Cozi has formed a strategic partnership with MeadWestvaco (NYSE: MWV), a Sidney, NY-based maker of school and office supplies and planning tools. Financial details weren’t given, but the deal gives MWV consumers access to Cozi’s Web-based tools for helping families manage their schedules. The tools include a family calendar, customized to-do lists, and messaging systems.

—Voyager Capital, the Seattle-based venture firm, participated in a $5 million investment in 1020, the San Francisco developer of Placecast, a location-based advertising and marketing platform. Quatrex Capital and Onset Ventures also joined the Series B round. Voyager is a returning investor in the company.

Comments | Reprints | Share:          

The activity in the Northwest picked up a little bit around the holiday weekend. In the past week, we’ve seen some interesting deals in alternative energy, healthcare, and software.

—Seattle-based Qliance Medical Management raised $4 million in venture capital led by Second Avenue Partners, with participation from New Atlantic Ventures and Clear Fir Partners, as Luke reported. Qliance provides basic healthcare to patients without involving health insurance companies, with the idea of paying doctors to spend more time with fewer patients. The company was founded in 2006 and has raised a total of $7.5 million. Luke first profiled the firm, which is led by CEO Norm Wu, back in December.

—Xconomy reported that Prometheus Energy, a Redmond, WA-based producer of liquid natural gas, raised $10 million from Shell Technology Ventures (managed by Netherlands-based Kenda Capital), with $10 million more coming down the road if Prometheus meets certain milestones. It’s a big deal for Prometheus, which has developed a novel method of producing alternative fuel from waste gases at landfills, coal mines, and other facilities. It’s also a big deal for Seattle cleantech and for the alternative fuels industry, which needs support from big oil companies.

—R.W. Beck, a Seattle-based engineering and business consulting firm, has been acquired by SAIC (NYSE: SAI), the San Diego government contractor, as Eric reported. Financial terms weren’t given. SAIC performs research and services for U.S. intelligence, defense, and security agencies. R.W. Beck was founded in 1942 and focuses on the energy and infrastructure sectors.

—Seattle stealth startup Ground Truth raised $2.6 million in equity funding, according to an SEC filing. The investors include venture capitalists Tom Huseby and Erik Benson of Voyager Capital in Seattle, and Beau Laskey of Steamboat Ventures in Burbank, CA. Ground Truth is led by executives Sterling Wilson and Michael Libes.

—Burnaby, BC-based Ballard Power Systems (NASDAQ: BLDP) has teamed up with Bend, OR-based IdaTech to sell 310 hydrogen-fueled generators to ACME Tele Power, a wireless infrastructure company in India, as Eric reported. Terms of the sale weren’t disclosed. The generators will help ACME produce backup power to maintain wireless networks during outages.

—The Financial Times reported that Microsoft (NASDAQ: MSFT) is in the process of selling Razorfish, its Seattle-based online advertising subsidiary. The report, which has not been confirmed by Microsoft, claims Morgan Stanley has been appointed to find a buyer, and that Publicis, a French marketing firm, is a possible bidder. Microsoft acquired Razorfish in 2007 as part of its $6.4 billion purchase of aQuantive in 2007.

Comments (1) | Reprints | Share:          

Kirt Montague is the Comeback Kid of the Seattle cleantech community. We saw the fire in his eyes back in March when he rocked the room with a killer presentation on waste-to-energy at Xconomy’s cleantech forum in Seattle. And we see it again now that his company, Redmond, WA-based Prometheus Energy, which produces liquid natural gas from waste, has just closed $10 million in financing—with another $10 million to come upon reaching certain milestones—from Shell Technology Ventures Fund, which is managed by Netherlands-based Kenda Capital, a division of the Dutch oil giant.

Prometheus Energy, and Montague, have been through some rough patches. The company was founded in 2003 and raised more than $20 million in venture funding through the alternative fuels heyday of 2006. That year, Montague took Prometheus public on London’s Alternative Investment Market (AIM). The move didn’t work out, and the company was de-listed in 2008. Prometheus went through layoffs, personnel changes, and slumping revenues. Last September, the assets of the company were acquired by Black River Asset Management, a large private equity firm based in Minnetonka, MN, and San Mateo, CA.

“We’ve hung in there, we’ve weathered the storm,” says Montague (pronounced “Mon-tag”), Prometheus’s co-founder and CEO. “It hasn’t been easy. It’s been painful. But we’re still here, and we’re growing. Having Shell [Technology Ventures and Kenda Capital] close this deal validates a lot of what we’ve done.”

Indeed, it’s a big deal for Prometheus Energy, for Seattle cleantech, and for the future of alternative fuels. It also highlights some broader and more globally important business trends. One is that big oil companies are starting to invest heavily in alternative energy technologies, even in the midst of the recession. Another is that the capital for these deals in the U.S. increasingly is coming from overseas. “You’ve got a situation where the market for this technology is not just domestic, it’s global,” says Michael Butler, CEO of Seattle-based Cascadia Capital, the investment bank that brokered the Prometheus deal. “Kirt went to Shell [Technology Ventures] because of the value they bring.”

Gaining a strategic partner like Shell Technology Ventures appears to be quite … Next Page »

Comments (1) | Reprints | Share: