In the past year, Venture capital (VC) funding for early-stage cleantech companies seems to have mostly dried up. The good news is that other cleantech investors are stepping up to fill the void- including our own University. But before diving into the details of Berkeley’s Cleantech University Prize, let’s explore the VC cleantech funding issue further.
The energy industry is in a state of rapid change – the traditional role of electric and gas utilities is being re-envisioned, distributed energy generation is growing and advancing, and energy storage is becoming more economically viable. One might expect that new cleantech ideas, technologies and business models would be popping up all over the place. But the sad reality is that cleantech venture funding is the lowest it has been in 5 years. And according to PWC, only a fraction of the (already minimal) amount of VC cleantech investment is going to early stage startups or initial investments.1
Many believe that cleantech VC investing has rapidly declined due to the long development timelines and significant capital requirements that often characterize new clean energy technologies.2 Unfortunately, these days VCs have found that they can make an easier and quicker buck by investing in software and mobile technologies.3 So what happens now? Will new cleantech companies die or never even get started because of the lack of venture capital funding?
Fortunately, there are new forms of funding that are emerging to fill the gap that VCs have left. For example, the Breakthrough Energy Coalition was recently founded by a group of wealthy investors led by Bill Gates to establish funding for early-stage cleantech companies. Corporations are helping to develop new technologies by strategically investing in or acquiring cleantech start-ups.4 And federal, state and local governments and institutions are finding new ways to support cleantech innovation.
The U.S. Department of Energy’s Cleantech University Prize is an excellent example of far-reaching and effective government funding. The DOE’s CleantechUP “aims to inspire the next generation of clean energy entrepreneurs and innovators by providing them with competitive funding for business development and commercialization training. Cleantech UP builds on its precursor, the DOE National Clean Energy Business Plan Competition, which expanded student engagement in clean energy technologies from 2011 to 2014 and attracted more than 1,000 teams, resulting in more than 70 ventures, 120 jobs, and $60 million in follow-on funding.”
UC Berkeley is one of 8 institutions that hosts an annual regional CleantechUP competition, managed by BERC and the Berkeley Energy and Climate Institute (BECI). The Berkeley Cleantech University Prize is now accepting applications from students at universities across the U.S. to submit their innovative cleantech ideas. If selected, student teams will have a chance to partake in a 15-week mentorship and training program and compete for a $50,000 grand prize. The winner of the regional competition will then advance to the DOE’s National Conference where they will compete for an additional $100,000.
Berkeley’s CleantechUP Applications are now available online until October 31, 2016. VC funding won’t come along fast enough, so I hope all student teams with an innovative cleantech idea will take advantage of this unique funding and mentorship opportunity.
Christie Howe, BERC Co-President