by Paul Bonanos
[Posted on February 11, 2008 - 6:48 PM]
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DiggHedge fund GLG Partners has led a $50 million second-round funding in solar energy device developer Infinia Corp., a company already backed by a number of blue-chip West Coast technology investors.
Existing stakeholders also participating in the round include Khosla Ventures of Menlo Park, Calif.; Vulcan Capital, the firm operated by former Microsoft Corp. executive Paul Allen; and Idealab, a technology incubator founded by entrepreneur Bill Gross. Another new investor, Wexford Capital LLC of Greenwich, Conn., joined existing stakeholders Equus Total Return Inc. of Houston and Power Play Energy of New Canaan, Conn., in the new investment.
The previous investors supplied Infinia with $9.5 million in a deal announced last summer. Concurrent with that deal, Infinia said it had acquired Stirling Cycles, another Idealab-backed company. Power Play provided an early round of capital to Infinia.
Infinia chief financial officer Gregg Clevenger the company is likely to raise an additional $15 million in the near future. Although Infinia considered working with more traditional venture firms, the company's rising valuation and significant capital needs prompted it to consider alternative investors, he said. The company chose U.K.-based GLG in part due to its existing holdings in the alternative energy sector, Clevenger said.
Infinia's core technology uses a Stirling engine, which involves a piston driven by heated gases, to harness solar power. Sunlight is focused from a dish toward a single point, heating one end of a cylinder, causing the gas to expand and in turn push the piston toward the cooler end of the cylinder. The company developed heart-assist pumps that also used Stirling engines in the mid-1980s, before its recent shift in focus to solar energy and subsequent fundraising.
Although he acknowledged that the cost of entry is higher, Clevenger said Infinia's technology is more efficient than photovoltaic cell technology in the long run.
Khosla Ventures holds a stake in photovoltaic innovator Stion Corp. of Menlo Park, as well as reflector-based technology developer Ausra Inc. of Palo Alto, Calif. Ausra's mirror arrays also focus sunlight on a single spot, but heat a water pipe that drives a steam turbine instead of gases that drive a piston.
Ausra's $40 million round included Kleiner Perkins Caufield & Byers of Menlo Park, Calif., which also employs Khosla Ventures founder Vinod Khosla. Ausra's technology is designed for large solar arrays, including a 177-megawatt plant to be constructed in California. Infinia's dishes provide about 3 kilowatts apiece, and will likely be used in much smaller arrays, although Clevenger said the company expects that they will be used in "multi-thousand unit" lots.
Infinia's products are geared toward solar asset developers, including potential buyers in Spain, the southwestern U.S., China and India. The company could pursue an initial public offering as soon as mid-2009, Clevenger said, adding that the company does not expect to pursue a third round of funding.
Alan Smith at Orrick Herrington & Sutcliffe LLP of San Francisco provided counsel to Infinia. The company did not hire a financial adviser.
