Small Wind Company Altaeros Snags $7M from SoftBank

It’s not every day that a wind energy startup attracts investment from a telecom company, but that’s exactly how Altaeros Energies financed its Series A round.

Altaeros said today that Japan-based telecom company SoftBank invested $7 million in the Somerville, MA-based wind company. The money, the startup’s first institutional round, will be used to bring its first commercial product—an airborne wind turbine—to market, says Adam Rein, the company’s chairman and co-founder.

SoftBank has a couple of reasons to invest in renewable energy. Japan, of course, suffered massive disruptions from the 2011 tsunami and earthquake, which led to the Fukushima power plant disaster and a national effort to find alternatives to nuclear energy and fossil fuels. Altaeros’s wind turbine, which is held aloft by a donut-shape balloon, could be used to power remote villages in Japan and the Asia-Pacific region, SoftBank chairman and CEO Masayoshi Son says in a statement.

Also, the company’s high-altitude wind turbines could be used to provide both energy and telecom network service. SoftBank is a 70 percent owner of cellular provider Sprint. “We’ve always had in mind being a hybrid energy and telecom platform,” Rein says. “Having a second revenue stream is real value-add that can make it much more economical than producing wind energy alone.”

SoftBank has a venture capital arm, but Altaeros was seeking an institutional investor, Rein says. Having a “strategic partner” gives Altaeros more credibility with potential customers and, in theory, an investor with a longer time frame than a venture capitalist.

Altaeros built a prototype of an airborne wind turbine and ran it through a multi-month test at a remote village in Alaska. The company’s wind turbine is a generator that is elevated by a helium-filled shroud and anchored to the ground with wires. It can operate at up around 1,000 feet where wind tends to be steadier and stronger. Telecom signals operate at longer distances at higher elevations, too.

The product isn’t designed to compete with grid energy but is an economic way to provide power to off-grid locations, such as villages, commercial locations, or microgrids, Rein says. Now with Softbank’s investment, the company’s vision of a dual-duty tower—providing both telecom service and energy—is closer to reality.

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