Dozens of solar, biofuels and battery companies failed, unable to show enough promise to go public or attract the attention of bigger companies. “Investors are still waiting for their cleantech investments to produce returns,” says Dallas Kachan, who runs the San Francisco clean technology consulting firm Kachan & Co. “Nobody's seen the stellar home runs they were hoping for five years ago.”
Even when clean energy companies have gone public, they haven't fared well. An index of clean energy companies is down 69 percent since it began in 2005. A similar index of traditional energy companies is up 75 percent over the same period.
The value of global clean technology deals fell 29 percent last year to $7 billion, from a record $9.9 billion in 2011, according to the Cleantech Group. But the portion of that sum focused on conventional fossil fuels nearly tripled, to a record $556 million.
A few clean technology investors have stayed away from oil and gas despite the temptation. Khosla Ventures, for example, has been a major backer of advanced biofuels even as most of these companies have failed to live up to their promise. The firm does not invest in companies that support fossil fuels.
But the drilling boom has led to countless investments in this gray area between clean and dirty.
— Axine, which is backed by Chrysalix and Royal Dutch Shell, wants to make the drilling process known as fracking less dangerous by treating wastewater produced during drilling without chemicals.
— Picarro, one of the cleantech investments of Greylock Partners, is attempting to make natural gas production less harmful to the climate with its leak-detection system.
— Neos Geosciences is backed by a “greentech” fund at Kleiner Perkins Caufield and Byers, where Al Gore is a partner. The company helps oil and gas companies find the most promising places to drill for oil and gas — and avoid drilling in ecologically sensitive locations — using sensors mounted on helicopters.
In 2007, a Sunnyvale, California-based company called Liquid Robotics, Inc. began developing a seagoing drone that required no fuel. Its original purpose was to transmit live songs of humpback whales over the Internet.
VantagePoint's Alan Salzman thought Liquid Robotics' technology was great, and he had a good idea who might agree. He set up a meeting with Schlumberger, the giant oil and gas drilling services company. The two companies have since formed a joint venture.
Liquid Robotics' drones will likely be used to help detect leaks from drilling operations and make sure the water is free of whales when oil companies search for oil. But the robots will also help locate new deposits of oil and gas.
“We are not philosophical purists,” Salzman says. “We're investors.”