The IT in Green Investing. Venture capitalists are going ga-ga for “green” start-ups, even though most of them know nada about alternative energy. But it turns out green investing doesn’t have to be about solar panels and ethanol made from wood chips—it’s also about old-fashioned information technology, says Foundation Capital’s Paul Holland.
green“This is the hottest IT market in the world,” says Holland, who has been talking up Foundation’s seven green, or “clean” tech investments lately. They include a company that sells Internet-based networking products to upgrade utility meters, called Silver Spring Networks. Another one, Naverus, makes software to help airplanes take off and land more efficiently, which saves them fuel.
Such companies can have a big impact on the environment by lowering the consumption of fuel and electricity, says Holland, just like more high-profile companies that make ethanol or promote wind power. Technology from companies like Silver Spring might even allow utilities to price electricity more rationally for different customers, he says: Someone who runs the air-conditioner during the heat of the day might pay more for that privilege, while an eco-conscious consumer who puts off running the washing machine until nightfall could get a break on rates.
Of course, Foundation, of Menlo Park, Calif., is also touting its green investment in a start-up developing “next generation drywall”, called Serious Materials. This is high-tech?
Holland—better known for working with wonky software companies like Ketera Technologies and Mendocino Software—tells the Business Technology Blog that making drywall is actually “very energy intensive.” Still, he allows: “It’s a big umbrella that we’re under here as far as looking at cleantech.”
Indeed, Holland may be having the last laugh. While many other venture capitalists are pouring hundreds of millions of dollars into companies building solar and ethanol plants-and haven’t yet seen any return-Foundation made a tidy sum when one of its green investments, EnerNOC, went public in May. EnerNOC, based in Boston, uses technology to help utilities and businesses better balance power consumption during periods of peak demand. EnerNOC’s shares have surged nearly 83% from their IPO price of $26 a share.
–Rebecca Buckman
