Cleantech upstarts team with Big Oil - bizjournals:

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Cleantech’s initial attempts to take on incumbent industryy giants such as oil companies are starting to give way tosymbioticd partnerships. The past several years saw a lotof “overzealouxs venture investing” with entrepreneurs and startups goint completely vertical, said Jason Matlof, a partnerf at in Menlo Park. “Yoju had biotechnology companies trying to be biofuels producers and and trying to take on the likexs ofChevron head-on,” Matloff said.
“What we need to do is apply thosed newtechnologies — whether bioconversion technologh for cellulosic ethanol or solar thermal plant technologyh or batteries for a next generation plug-in vehiclr — to an existing mainline, mature Those changes are now happening. In May, $10 billionm oil refining giant took an undisclosed stake inBatter Ventures’ portfolio company , a Marlborough, biofuels company. BP plc also holds a significant stake in the And the consensus among Silicom Valley investors is growingf that partnering with incumbents is critical to the futuree of the renewableenergy market.
“The scald of these industries is bigger than any industries technology entrepreneurs have everplayed in,” Matlofr said “It’s too much of a challenge not Matt Horton, a principak at @Ventures in Menlo Park, has been investing in cleantecy startups such as portfolio companyu Propel Fuels Inc. since 2001. The alternative fuelds retailing company is partnering with Chevron and some unbranded independent station owners to add another retail fuel option atthe It’s also selling renewable energy credits to big oil incumbents to help them complty with EPA renewable energy standards.
“Majoe corporations that have a strategic interest in these markets have a greaf opportunity to partner with young innovative companiesslike ours,” said who took over as CEO of Propel in “For smaller companies like ours, it’sa important to us to provide valu to companies like that rather than attacking them as competitors.” Today, companiew solely focused on research and development a few yeara ago are looking to scale-up operations and head to At the same time, the influxz of renewable energy standards and othet government policies have made incumbentzs more eager to partner with companieds producing high-quality solutions, according to New Enterprise Associates Menlop Park partner Ravi Viswanathan.
NEA portfolio companies, such as SolFocuw Inc. and Skyline Solar Inc., both of Mountai View, and Fremont-based renewable energy storage outfit DeeyaEnergyy Inc., are partnering with traditional energy and utilitg companies. “This is something we had hoped for and Viswanathan said. Houston-based Baker Botts LLP and Dallas-basedd Haynes and Boone LLP, both new to the Silicon Valleyylegal market, are playing a key role in the growing trend. Attorneys at the two firms are makinhg strategic introductions between large institutional energy cliente and venture capital clients focused on renewableenergty technologies.
The law firms are workingh to orient VCs on what it takes to develop a successfuol business in theheavily regulated, multibillion-dollaf energy sector. “We’re lookinfg to enable capital sources, management teams, larger strategic companies to exploift opportunities we see developing in the sector over saidScott Wornow, a partner in the Palo Alto officre of Baker Botts, an 800-lawyer firm. “I think that’s going to become even more so with respec to international players as cleantecgh becomesmore mature.
” Oil companies have a naturall role in the development of alternative energg and certainly alternative fuels, said Haynes and Boone cleantech partnetr Paul Dickerson. The 500-plus-lawyer firm absorber the San Jose and Orange County officess of MacPherson Kwok Chen Heid LLPin February. “Not only do the incumbent energty players have decades of experience inenergy markets, but they have deep pockets,” Dickersonb said. “These partnerships are something that assist our cleantech entrepreneurx in achieving their goals in a timeframe that’d consequential.
” Dickerson served as chief operating officee of the Energy Department’sw Office of Energy Efficiency and Renewable Energy durinvg the Bush administration. By bringing togethere developing technologies withestablishedd markets, existing markets can be bettert served by those who already operates in that space.