Bloomberg reports on the move in cleantech investment circles away from renewable energy generation, and anything involving technology and scaling risk, toward efficiency plays.
The story quotes Neil Suslak from Braemar Energy Ventures:
“We continue to push energy efficiency, which is less capital intensive and allows a company to get into a very big market by improving existing infrastructure rather than having to build a new way of delivering power. Efficiency and capital-light deals are the flavor of the month.”
And so it goes. The other benefit of being an efficiency play is not just that it’s cheap to scale but that you don’t have to compete with East Asian conglomerates which can crush you on economies of scale (LEDs, solar).
Efficiency plays are software plays and those favor the startups with the best technology. Even in terms of solar or batteries, it’s really only the companies trying to go after breakthrough tech like battery maker Ambri or solar maker Alta Devices that can draw funding right now. It’s because those companies are insulated by the potential of their next generation technology. Which leaves VCs to pick the best technology, not try to go head trying to finance their companies against organizations like The China Development Bank. Because we saw who won that financing war.