CHICAGO — Some of the most promising clean-energy startups from across the Midwest spent yesterday making their best pitches to a panel of investors, with hopes of seizing a share of $1 million in seed money to help their companies grow.
The 10 early-stage companies and four student-led teams, armed with PowerPoint presentations and ambition, were finalists in the Clean Energy Trust Challenge, which bills itself as the largest single-day clean energy pitch competition in the nation.
In the end, four teams claimed the prize money:
- Hazel Technologies of Evanston, Ill., won the $500,000 Illinois Clean Energy Fund Award for an Illinois-based company with a market-ready product and early customer adoption. The company’s product, FruitBrite, helps produce retailers and distributors extend the shelf life of fruits, vegetables and plants by as much as four times.
- Netmatix of St. Louis claimed $310,000 of awards, including the $240,000 Wells Fargo Award for Midwestern startups focused on energy efficiency or technology for deployment in buildings.
- SPLT of Detroit won the $100,000 Pritzker Foundation Award for startup or early-stage companies. SPLT is a ride-sharing application marketed specifically to corporations.
- NovoMoto, based in Madison, Wis., claimed three prizes totaling $90,000. The company is building a business to provide locally operated solar-charging stations for residents in the Democratic Republic of Congo who lack access to reliable electricity or use kerosene to meet their lighting needs.
Other finalists represented a broad range of products and software. CrystalE, a startup out of Case Western Reserve University in Cleveland, developed piezoelectric sensors that use ambient motion to harvest energy. SonicLQ of Chicago is selling devices that use sound waves to detect air leaks in buildings. Ann Arbor, Mich.-based Current Motor developed mobile, solar-powered nano grids. There’s also a version that comes with a set of four electric motorcycles that the company calls a "mini fleet in a box."
The 14 teams chosen to compete for prizes yesterday were selected from 70 applications. Despite the wide range of markets they’re trying to penetrate, they all share one thing in common: They need money to grow.
"This capital is lifeblood for these companies," said Erik Birkerts, CEO of Clean Energy Trust, the Chicago-based nonprofit formed to accelerate development of the clean-tech industry across the region.
The need for capital, and the constant struggle to attract it, is particularly acute for startups engaged in "deep tech" innovation that is based on a scientific discovery or technological innovation.
"It’s hard, takes a long time and is extremely expensive," Birkerts said. "And if there is an exit, the premiums don’t adequately compensate for the risk and time horizons associated with that investment."
Challenge pays forward
Since the first Clean Energy Challenge in 2011, 29 companies have claimed $3.2 million in investments. Those companies have subsequently used the funding to help leverage more than $86 million in follow-on funding, Birkerts said.
Each of the companies at yesterday’s competition got nine minutes on stage at a downtown Chicago auditorium to present its business plan in a format similar to the reality television show "Shark Tank." Judges including investors, venture capitalists and energy executives spent four minutes asking follow-up questions.
The daylong event also included keynote speeches from leaders in energy and sustainability. They included Jim Rogers, the former CEO of Duke Energy Corp., and Adam Lowry, the co-founder of Method Products, the maker of environmentally friendly soap products.
Lowry, formerly a climate scientist at the Carnegie Institution for Science who worked on the Kyoto Protocol, turned to entrepreneurship because he grew frustrated by the lack of progress in addressing global warming.
Just 4 percent of consumers use sustainability as the primary driver when making purchasing decisions, Lowry said. So he brought "green" to the masses by making environmentally friendly soap products that are better known for attractive packaging and design.
The company uses 100 percent recycled plastic in its packaging, runs its fleet of trucks on biodiesel and hosts a garden on top of its Chicago manufacturing facility, which is powered by solar panels and a utility-scale wind turbine.
All of the company’s sustainability initiatives are "not terribly transparent to consumers," he said. "But it’s something that, when you dig into the brand, is there."
Rogers, meanwhile, spent 25 years as a utility chief executive and was chairman of the Edison Electric Institute when the utility lobby changed its position to support federal climate change legislation.
These days, Rogers’ passion is helping to bring sustainable electricity to the developing world. But he keeps a close eye on the evolution of the U.S. utility industry, which he believes will continue to undergo transformation.
"Fast-forward 10 years, and I think the power sector will look much different than it does now," he said during a lunchtime question-and-answer session.