Cleantech upstarts team with Big Oil - San Antonio Business Journal:

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Cleantech’s initial attempts to take on incumbent industry giantzs such as oil companies are starting to give way tosymbiotic partnerships. The past severa l years saw a lotof “overzealous ventures investing” with entrepreneurs and startups going completely vertical, said Jasob Matlof, a partner at in Menlo Park. “You had biotechnology companies trying to be biofuelws producersand refiners, and trying to take on the likees of Chevron head-on,” Matlof “What we need to do is apply those new technologies whether bioconversion technology for cellulosic ethanol or solar thermal plant technology or batteries for a next generationj plug-in vehicle — to an existintg mainline, mature industry.
” Those changex are now happening. In May, $10 billion oil refining giant took an undisclose d stake inBattery Ventures’ portfolioo company , a Marlborough, Mass., biofuelds company. BP plc also holdws a significant stake in the And the consensus amont Silicon Valley investors is growing that partnering with incumbentse is critical to the future of the renewablweenergy market. “The scale of these industriex is bigger than any industries technologh entrepreneurs have ever played Matlofsaid “It’s too much of a challengs not to.
” Matt Horton, a principal at @Ventures in Menllo Park, has been investing in cleantech startups such as portfolio compan Propel Fuels Inc. sinc 2001. The alternative fuels retailing company is partneringwith Shell, Chevron and some unbranded independentg station owners to add another retail fuel option at the pump. It’ds also selling renewable energy credits to big oil incumbentx to help them comply with EPA renewable energy standards.
“Major corporations that have a strategic interestg in these markets have a great opportunity to partnef with young innovative companieslike ours,” said who took over as CEO of Propel in “For smaller companies like ours, it’sx important to us to provide value to companies like that rather than attackingt them as competitors.” Today, companies solely focused on research and developmenty a few years ago are lookinv to scale-up operations and head to At the same the influx of renewable energy standards and other governmenf policies have made incumbents more eager to partneer with companies producing high-quality solutions, accordingb to New Enterprise Associates Menlo Park partner Ravi NEA portfolio companies, such as SolFocus Inc.
and Skylinde Solar Inc., both of Mountaih View, and Fremont-based renewable energy storage outfit DeeyaEnergyt Inc., are partnering with traditional energty and utility companies. “This is somethinhg we had hoped forand expected,” Viswanathan said. Houston-basexd Baker Botts LLP and Dallas-based Haynes and Boonw LLP, both new to the Silicon Valley legal are playing a key role in thegrowingy trend. Attorneys at the two firmes are making strategic introductions between large institutional energy clientx and venture capital clients focused on renewable energy technologies.
The law firms are working to orient VCs on what it takea to develop a successful business in the heavily regulated, multibillion-dollar energy sector. “We’re looking to enablr capital sources, management larger strategic companies to exploit opportunities we see developintg in the sectorover time,” said Scott a partner in the Palo Alto office of Bakeer Botts, an 800-lawyer firm. “I thinlk that’s going to become even more so with respect to internationalo players as cleantech becomes more Oil companies have a natural role in the development of alternative energy and certainly alternative said Haynes and Boone cleantech partnerPaul Dickerson.
The 500-plus-lawyert firm absorbed the San Jose and Orange County offices of MacPherson Kwok Chen Heid LLPin February. “Nog only do the incumbentf energy players have decadews of experience inenergy markets, but they have deep Dickerson said. “These partnershipd are something that assist our cleantech entrepreneurs in achieving theidr goals in a timeframe that’se consequential.
” Dickerson served as chieg operating officer of the Energy Department’s Office of Energ y Efficiency and Renewable Energy during the Bush By bringing together developingf technologies with established markets, existing markets can be better servee by those who already operate in that