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Wednesday, June 29, 2022

Clean Nordic Power Seeding A Brand In Silicon Valley

Nordic and Estonian cleantech companies showed off their latest innovations in smart grid, biofuels, renewable energy, green building and water management in Silicon Valley last week at Nordic Green II. The event, hosted by research institute SRI International in Menlo Park, attracted over 250 participants but only a fraction were startups.

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Eagle Wind Power from Lahti was the only Finnish startup present.  Eagle offers an innovative wind turbine technology for households, farms and small companies.  Board member Timo Rapakko revealed that the company is negotiating a five million euro funding round in Finland, part of which will go into completing a manufacturing facility. Denmark and Germany are initial target markets.

Eagle is currently researching market opportunities in the US and will hire a person in the Silicon Valley area to organize sales efforts, said Rapakko, who was a key dealmaker in the Sumea-Digital Chocolate merger in 2004. Eagle has already been offered land in US for assembly purposes. Eagle has revenues and is negotiating sales contracts in US.

Eagle’s turbines are to Rapakko’s knowledge approximately two times more efficient than any existing products on the market. The company utilizes nanotechnology and advanced aerodynamics to produce rotor blades that are light, strong and efficient. The company has also developed gearless generators and a control unit to match the advanced blades.

Another Finnish startup, AW-Energy, was unable to attend due to the travel challenges caused by the Icelandic ash cloud, but plans to visit Silicon Valley within the next few weeks. AW-Energy has a $4.4 M contract with the European Union to demonstrate its WaveRoller technology, which harnesses ocean energy.

Why were only two Finnish startups signed up for a prime networking event with Silicon Valley cleantech players and funders? As a comparison, a handful of Estonian startups did the rounds at the event and beyond.

Cost is an obvious threshold for young companies. Santtu Hulkkonen from Cleantech Finland says that maturity also plays a big role. “Those Finnish startups that are ready to seek venture funding in Silicon Valley are already networked and in discussions”, he estimates. Many promising cleantech startups are still in very early stages and are arranging funding in Finland and therefore not quite ready to take on the US. The VCs at Nordic Green echoed the sentiment; recommending startups to first seek funding in their home markets.

Venture capital investors and American corporate representatives acknowledged the quality and pioneering work of Nordic cleantech companies. But the leap from a local market in a Nordic country to the vast markets in the US is gigantic. Clean tech companies may do well in following the example of those Nordic ICT-startups, which in the past have entered the US by partnering. Opportunities exist, but finding and pursuing them will require effort.

Ronald Kent, Project Manager from Sempra Energy Utility, a Fortune 500 energy services company based in San Diego, California said he would welcome relevant approaches.

“We continually scan the field, but we do not want to just follow the bandwagon. We look for companies that fit our needs. We are interested in biogas cleanup and gasification, and possibly a combination of biomass and petcoke”, Kent said after participating in a panel discussion.

Testing technology in a small project is a good start, which Sempra is doing with a Swedish company. “We sent some algae to them so that they can try in their gasifier. We are interested to see if we can grow algae and gasify it, because we want fuel flexibility.”

Kent stressed the importance of the human factor. “You can have a great technology but if you have crazy people involved, it is going to be a bad ending. You have to have people who stay the course over five years or more and make it happen. We are looking for character in the individuals. “

Successful co-operation can turn into a corporate investment that is a viable alternative to VC funding. Sempra, for instance, has an investment in about 20 companies. So far, all are American. Just like American VCs, corporations want to see a local presence and a US subsidiary before making any monetary investments in overseas companies.

Many of the Nordic participants talked about the desirability of partnering with each other when entering the US market. Each country has complementing areas of expertise, especially when it comes to renewable energy.

A few Finnish corporations used the opportunity to showcase their innovations. Elisa attracted attention with its energy generating Espoo data center and Nokia Siemens Networks got visibility for its know-how and elegant solutions in intelligent energy grid technology. Kemira and VTT promoted their future Center for Water Efficiency Excellence.


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