General Electric, the huge global conglomerate, has entrepreneurial aspirations.
On Thursday, the company announced $63 million of investments in 10 home energy companies as part of its so-called ecomagination Challenge. The initiative, announced last July, is a $200 million commitment to invest and develop partnerships with promising clean technology start-ups.
The company along with its venture capital partners — Emerald Technology Ventures, Kleiner Perkins Caufield & Byers, RockPort Capital, the Carbon Trust and Foundation Capital — have so far deployed $134 million.
“It allows us to connect to these incredible, innovative companies,” said Mark L. Vachon, the vice president of G.E.’s ecomagination effort. “We can help get these ideas faster into the commercialization process.”
For General Electric, which spent $1.5 billion in 2009 on clean technology research and development, the program is a low-cost way to identify promising start-ups with potentially breakthrough technologies. So far, it has made 22 investments and one acquisition, FMC-Tech, a power grid technology company.
The latest batch of investments includes GMZ Energy, a company that helps convert heat to energy, and Hara, an energy management software maker. Kleiner Perkins, an early backer of Google and Amazon, participated in both financing rounds.
While it is still unclear what these investments will yield, G.E. announced on Thursday that it was planning to expand the program. It will open a similar ecomagination Challenge in China later this year that will represent about $100 million in financial commitments.
In addition, it is partnering with the Carbon Trust to establish a $5 million seed fund in Europe for clean technology start-ups. According to Mr. Vachon, General Electric may eventually apply the ecomagination Challenge strategy (of investing in a broad swath of early stage companies with venture captial firms) to other parts of the company.
“This platform has a lot of applications, it could work with other parts of G.E.’s portfolio,” Mr. Vachon said. “We’ll start with China, and that will certainly keep us busy for awhile.”
Source: New York Times