The second day of the Cleantech Forum highlighted a recent trend: big corporations have become increasingly active by opening their infrastructure and investing in later-stage start-ups. Josh Green from Mohr Davidow Ventures actually noted on a VC panel in the morning that corporate investors led the rounds of financing for two of its portfolio companies in the last six months, which is unusual. Matt Maloney from Silicon Valley Bank, who moderated the panel, concluded that "corporate partners are becoming a critical ingredient of clean-tech innovation".
The outlook for 2011 is however less bright for earlier-stage start-ups. The CEO of the Cleantech Group, Sheeraz Haji, commented during lunch that "social gaming and mobile application start-ups still dominate VC investment because they are more capital efficient". He added that "cleantech is an important theme" and confirmed the role of large infrastructure companies to accelerate the deployment of new clean-tech technologies.
Veolia with 300,000 employees worldwide is one of those companies. Veolia Environment announced today their first partnerships with start-ups part of their Innovation Accelerator Program. I sat down with their VP for Innovation, Marie-Anne Brodschii. Contrary to many Fortune 500 corporations that use business plan competitions mainly to extract market information, the program filters diligently a large number of companies through a three-step process to bring efficiencies in their operations.
“Our experts reviewed about 200 new technologies this year” explained Marie-Anne. “After engaging the business units, about 25% of the start-ups go through a pilot trial phase. The whole process takes 12 weeks typically.” She concluded that “5 companies were selected for commercial deployment this year and more are in the funnel”. GreenRoad is one the start-ups that Veolia picked. They provide an integrated monitoring platform for fleets to reduce accidents and fuel consumption.
Eric Weiss, SVP Worldwide Marketing and Services at GreenRoad explained that "more than 30% of fuel consumption is caused by poor drivng behavior". GreenRoad benefited from the experience by deploying the software solution accross 8,000 vehicles owned or operated by Veolia. He was surprised how relatively fast the process was. The seven year-old start-up was the most developed company in the group, evenly divided between North America and Europe.
The cleantech sector remains dominated by North Anerica and Europe. The Global Cleantech 100 list shows a rise in AsiaPac but American companies represent 57% of the leading clean tech companies while Europe is falling behind with 37%. In the last year, Energy Efficiency has taken over Solar as the hottest sub-sector within clean-tech.