Investments in Innovative Technologies
Advanced Materials, Nanotechnology, Green Chemistry and Green Industry (Cleantech)
Trends and Characteristics of the Venture Capital Market, Startup Companies
and Leading Corporations
Part II – Investment Bodies and the Technological Challenges
Dr. Dov Reichman
Among the investment bodies active in the field of advanced materials, Cleantech and Nanotechnology in Israel, a number of Incubator companies, Venture Capital Funds and the innovative bodies of the large corporations are worthy of mention.
Hutchison-Kinrot invests in water technologies and Cleantech, and constitutes part of the incubator program of the Chief Scientist in the Economy Ministry. In 2012, it was acquired by Hutchison Water, which belongs to the giant CH Hutchison Corporation from Hong Kong.
Terra Ventures is an investment and incubator fund that focuses on Pre-Seed initiatives and initiatives at more advanced stages in which green technologies and those that are beneficial to the environment and the quality of life are developed.
Capital Nature engaged in investments in early stage investments and those intended for renewable energy.
Our Crowd invests in startup companies in relatively early stages in diverse technologies, including advanced materials and Cleantech, and comprises a platform for the Equity-Based Crowd Funding model.
The Innovation Incubator of Israel Chemicals locates, invests in and supports initiatives that can integrate into the business activity of the corporation, and among them are advanced materials for agriculture, food supplements, as well as materials for various infrastructures.
Worthy of mention are the worldwide investments made by investment bodies of corporations such as General Electric – GE Capital, which also publishes reviews of the trends in industry and relates to the need to preserve the sector of mid-sized businesses that employ about 60% of the workers, and currently constitute a national target in for the preservation and strengthening of the advanced manufacturing processes in the United States. Development of advanced manufacturing, which is a national target in the United States, is also nourished, of course, by investments in innovative technologies.
In the first half of 2015, Applied Materials invested in the RayVio, Company that develops a LED-based UV lamp, using nanotechnology of semiconductors and which is intended for disinfection of food, water, air and various surfaces.
Since its founding in 2005, the venture capital body of Applied Ventures – Applied Materials has invested 192 million dollars in 62 portfolio companies, some of which were acquired by other companies, and shares of two of them were issued on the Stock Exchange.
Samsung Ventures, which participated in the round of investment in the Israeli StoreDot Company, can be added to the list of the corporations’ investment bodies.
During the first half of 2015, three million dollars were invested in green technology for the concrete industry of CarbonCure Technologies Inc., which specializes in developing materials for green construction. Pangea Ventures, a leading venture capital fund in the field of advanced materials intended for global challenges, led the investment round.
Khosla Ventures is a fund that invests in both early and advanced stages, and a number of companies in the field of advanced materials can be found, among them:
View Glass, NanoH2O, Celera, Arcanum Alloy Design.
In Israel and in the world there are numerous private investors that invest in technologies and companies in the field of advanced materials, however the investments are not usually specifically for these areas alone.
These Angels at present cover investments to the extent of $100K – 500K, however there are private investors, known as Super Angels that invest one million dollars and more in a company.
In addition there are Angels clubs in Israel and the world that benefit from the group’s experience, jointly conduct due diligence and jointly raise capital to receive a greater share of ownership of the company.
As an example one can mention the New Mexico Angels Club, whose representatives have already visited Israel to locate opportunities (www.nmangels.com).
The iAngels site provides access to a large group of Angels and diverse investment opportunities (www.iangels.com).
The Technological Challenges – The Market Needs
On the site of the World Economic Forum, 10 necessary groundbreaking technologies that were specified by a sizeable team of experts are mentioned.
These technologies are, of course, a target for investment, for technological development and regulatory progress in that field.
In first place on that list appears a vehicle powered by fuel cells.
A hydrogen-powered vehicle that does not pollute the environment continues to be a technological challenge in the field of materials, energy and environmental quality. Following years of development, vehicles based on fuel cells are beginning to appear for sale, although their price is expensive (about $70,000), however it is expected to drop in the coming years, as the extent of production increases.
Vehicles based on fuel cells from a hydrogen source do not require charging, as do electric vehicles, and they can travel 650 kilometers without refueling like a conventional vehicle. The hydrogen refueling is supposed to take only a few minutes, the fuel burning is clean and its sole byproduct is water vapor.
An additional example of the need for groundbreaking technology that appears on this list is the development of advanced materials that facilitate the breakdown of thermosetting plastic materials.
The plastic materials are divided into two main groups: thermoplastic materials and thermosetting materials.
Thermoplastic materials can be more easily repeatedly melted for breakdown as waste.
Thermosetting material have undergone chemical cross linking processing to achieve improved mechanical properties, and these processes are irreversible. Consequently, it is extremely difficult to break these materials down after they become refuse once there is no further use for them, and the extent of these materials is accumulating in huge quantities.
During 2014, a breakthrough was reported in the field by the respected Science magazine, after a thermosetting plastic material was developed that could be broken down after use of the product. This harbinger certainly raises hope for expansion of the investments in, and development of polymer plastic products of this type.
Among the technological challenges the market seeks, the London Environmental Investment Forum report mentions the need for lighter materials, without, of course, compromising their other properties, especially for the aviation, vehicle and robotics industries, and corrosion preventing materials and technologies for the petroleum, gas and infrastructure industries.
The main factors for the accelerated growth in investments in advanced materials are:
- Development and discovery of advanced materials and innovative materials such as nanotechnology.
- Regulation that requires solutions that are friendlier towards the environment, utilization and preservation of energy.
- Development of state-of-the-art instruments such as drones and robots necessitates innovative and quality materials with properties of durability and strength at competitive prices.