On the Radar…

Venture Capital in the Rockies (VCIR) Winter, a conference of entrepreneurs, venture capitalists, and service professionals, was held on March 4th in Beaver Creek, Colorado. The day began with a panel featuring business media experts, and was followed by presentations given by twenty-four startup and early-stage companies. To allow for digestion we’ve partitioned this event into four categories, including the Panel, Clean Tech companies, Consumer IT (and Peanut Butter) firms, and Business-to-Business IT organizations.

TerraLUX provides the engine that powers light emitting diodes (LEDs). LEDs operate under substantially different conditions than traditional bulbs, including lower voltage and temperature, so one “can’t just screw [an LED] into an existing socket.” Significant engineering must go into the machinery placed behind the LED in order to maximize the 10X potential extended life offered by the bulb. TerraLUX currently markets its own line of LED products, which are primarily manufactured in China, as well as doing engineering for companies looking to incorporate LED technology into their lines. Products the company has worked on range from flashlights to a laryngoscope. The Boulder-based company has four patents with an additional eight on file, as well as “a lot of know how” that differentiates it from competitors. In order to truly scale, CEO Dr. Anthony Catalona believes the company will have to move away from customizing products for each application and limit SKUs. His dream is to have “TerraLUX inside” branded on lighting products in the same way Intel co-opted PCs. The company, founded in 2003, achieved close to $3M in revenue in 2008 and was entirely self-funded until this year, when it acquired convertible debt from Access Venture Partners. The company plans a $3-6M Series A near the end of 2009 for the purpose of hiring personnel to meet demand.

Ampulse seeks to bring down the cost of silicon components embedded in photovoltaic cells. The company’s technology, based on research from NREL and Oak Ridge National Laboratories, produces film silicon by gas deposition on top of a metal substrate through a patented technology that produces large-grain and well-aligned silicon crystals. The film is only about 5-10 microns thick – relative to 100-200 microns for wafers currently in use – which substantially reduces the costs of raw material silicon. According to CEO Steve Hane, Ampulse technology could reduce the total cost of solar power to the $0.50 per watt level, compared to current standards for crystalline silicon of around $1.50 per watt. Hane emphasized the company, based in Littleton, Colorado, works on a very lean model using continued partnerships with national laboratories and consultants, and only recently adding two additional full-time employees beyond the CEO. As technology development nears completion, the company will seek to partner with a contract manufacturer skilled in silicon. The company is looking for $8M in Series A funding.

OPX Biotechnologies engineers microbes to make useful products without the use of petroleum. The company’s EDGE technology combines genetic manipulation, quantitative experimentation, and parallel processing to optimize microbe engineering for commercial production. Through this process the company attempts to optimize four key areas that substantially impact production and separation costs: titer (essentially concentration), productivity, yield, and purity. The company’s initial target product is acrylic acid, a raw material used in many goods including serving as the super-absorbent material in diapers. The Boulder-based company believes it will deliver substantially lower costs using sugars or syngas (40-60% reduction) as the main feedstock compared to traditional manufacturing processes, where cost is driven by the price of petroleum. The company’s acrylic acid production is currently achieved at 100mL laboratory scale with plans to scale up to 10L, and then pilot at 100L, which should be completed in the next 24 months. Beyond the pilot demonstration OPX will seek to develop strategic partnerships or joint ventures to commercialize its products. The company raised $12M in December in Series 3 funding and is seeking an additional $3 to 5.5M to close this round.

Ion Engineering is focused on removing contaminants, including carbon dioxide and hydrogen sulfide, from natural gas. The most accessible application for the company’s technology is the $14B industry for processing “sour” natural gas reserves, which currently relies on an aqueous-amine solution. ION’s solution replaces water with ionic liquids (molten salts) and in so doing provides several advantages. The ionic liquids are non-volatile, non-corrosive and generate a high reaction rate, all of which should enable substantial costs savings. The Boulder-based company seeks to produce portable pilot processing units that could be pulled up to plants and process about 1% of the gas stream as a demonstration. The company anticipates revenue both through licensing of the method (for which the company has a patent), sales of ionic liquids, and optimizing the engineering for individual customers. CEO Alfred “Buzz” Brown believes the company’s technology can be applied to existing plants using aqueous-amine processes without substantial upfront expenditure on capital equipment: “they would just have to change a few valves”. The technology also has potential for use in cleaning emissions from coal-fired power plants, but this application is still in the R&D stage. The company anticipates a $5M raise in mid 2009.

SkyFuel solar makes utility-scale concentrating solar power systems. These systems use parabolic mirrors to concentrate solar energy on a receiver column, subsequently heating fluids within the column, which in turn powers a turbine. Core to SkyFuel’s differentiation in the field is the use of its ReflecTech technology in the system’s mirrors, which is both 94% reflective (as good as the best glass mirrors) and unbreakable. Along with ReflecTech, the company also boasts an ability to produce systems that use 30% less materials at about half the weight of competing systems, resulting in installation that can be assembled twice as fast. The company, which maintains offices in Albuquerque and Denver, also offers wireless control of the mirrors for sun-tracking purposes. SkyFuel has been through two rounds of venture financing to date and is engaging in commercial demonstration projects this year. The company is seeking another $4M to continue growth through 2009.

Infotility offers a pure play software option for utilities seeking a network management solution. While the company’s software can incorporate information from the smart grid and associated devices, the products can deliver results based solely on the data currently collected by utilities. The Boulder-based company seeks to provide targeted decision support to help utilities better manage their networks, leading to cost savings in a variety of areas including avoidance of service outage penalties and longer lives for physical assets (e.g. transformers). Infotility’s products include the Smart Builder which allows utilities to model scenarios on the grid, as well as the Smart Dashboard which filters and feeds information to network operators. In being agnostic to the specific hardware solution a utility chooses, CEO Dave Cohen sees an advantage for Infotility in the opportunity for utility adoption without placing its bet on a particular smart grid horse. Currently, pilot projects are ongoing at the ConEdison and PG&E headquarters and a beta test is underway with ConEdison in Manhattan. Infotility has been financed by over $6M in innovation grants from the Department of Energy, as well as cost sharing agreements on its beta test with ConEd. The company is now looking to raise a $5M Series A round.

PorousPower’s Symmetrix battery separator is twice as porous as other options, which generates multiple benefits including faster charging, increased cycle life, and better thermal control (i.e. less risk of fire). CEO Timothy Feaver refers to Symmetrix as “the index fund of Lithium ion batteries,” as it can be used in any manufacturer’s products. Such utilization could include systems as complex as hybrid vehicles as well as the $1B battery market for small electronics and other products. The Lafayette, Colorado based company currently has fifteen trials ongoing in a variety of applications and plans to double factory capacity in the next six months. The company plans to sell Symmetrix to other battery manufacturers as well as develop its own cells. To date, the company has received $3 M in funding, $1.3M in the form of non-dilutive SBIR grants. PorousPower expects to reach cash flow positive in late 2010 and is in the process of raising a $7M Series A round.

Cocona, Inc produces a fabric that provides a natural alternative for high performance clothing. This material, which offers enhanced cooling, UV protection and odor control, incorporates small pieces of coconut shells that contain activated carbon. Many leading sportswear companies currently use Cocona fabric across a variety of clothing types, from ski parkas to yoga shirts. The company’s focus is not entirely on fabric, however, as its process of inserting active particles into polymers has much broader applications. Yet CEO Brad Poorman believes that, as a consumer product, clothing represents an ideal entry point to support broad brand recognition. Poorman noted this entry model was successfully employed by Gore-Tex (alma mater of several on Cocona’s management team), as once consumers became aware of the technology the recognition brought new opportunities to the company. Expansion opportunities include food storage, medical applications, and home goods. The company, which is based in Boulder and generated $12M in revenue last year, is looking for a Series B round of $10M.

Please check back with RockyRadar (@rockyradar) for more coverage of the VCIR company presentations.