It takes perseverance to make it in cleantech, perhaps even more in recent years than before.
Venture capitalists have scaled back their cleantech investments since 2011, thanks in part to big failures like Solyndra and macro trends like cheaper natural gas and solar panels, according to a Brookings Institution report last year.
That has led cleantech entrepreneurs to seek alternative sources of funding at the early stages. They’re relying more heavily on supporters like angel investors, philanthropic groups, and large corporations, which have been willing to invest in and partner with cleantech startups lately, says Emily Reichert, CEO of Greentown Labs, a cleantech incubator located in Somerville, MA.
Organizations like hers have helped, too, she says. Startups that rent space at Greentown get access not only to work desks, conference rooms, Wi-Fi, coffee, and other amenities now expected after the co-working space boom; they also get access to lab space, expensive equipment, and connections with potential investors and business partners.
“It’s actually very interesting to see how scrappy cleantech entrepreneurs have become,” Reichert says. “You used to think of cleantech as you need $100 million [in venture capital] to do anything. Well, actually, if you’re in a place like Greentown Labs, you have a lot of resources at your disposal that are going to keep those costs low in your beginning years and help you move further, faster.”
Now, Greentown’s 85 member companies—which also include research and development teams from large businesses like BASF and Saint-Gobain—have access to even more resources and space. The organization opened a new facility several months ago, which more than doubled its footprint to about 100,000 square feet spread across three buildings in Somerville, near Union Square. Greentown held an event Wednesday showcasing its new space (see photo slideshow above).
The building was used to manufacture copper and bronze tubes for steam engines in the 1850s, and more recently it was home to an auto body repair and paint business. Greentown and its business partners spent about $15 million renovating the facility to become the incubator’s new headquarters, a spokeswoman says.
The new 53,000-square-foot space added a few amenities to Greentown’s offerings, including space on the roof for testing weather-related technology and solar-powered products, and a “wet lab” for working on things like battery chemistries or water products, Reichert says.
“There were all of these different uses we weren’t able to accommodate in the old space,” she says.
The 40,000-square-foot former headquarters, located adjacent to the new center, will be converted to lab space only. (The organization also operates a 7,000-square-foot facility down the street, a spokeswoman says.)
Greentown was bursting at the seams before it opened the new center—it reached capacity within a year of opening its previous headquarters in 2013, and companies were on a wait list, the organization says. Now, Greentown has filled up about 60 percent of its expanded capacity across its three buildings, and it anticipates being full within about 18 months, Reichert says.
Since Greentown’s original location opened in east Cambridge, MA, more than seven years ago, the organization says its member companies have collectively created 1,000-plus jobs and raised more than $340 million in funding. Four of its startup members have been acquired, Greentown says.
The incubator’s tenants demonstrate the wide variety of opportunities in cleantech, spanning wind and solar energy, advanced battery and lighting technology, robotics and artificial intelligence software, and more. Its current members include Accion Systems, a spacecraft propulsion startup; Grove, an indoor farming company; Promethean Power Systems, a refrigeration systems developer and a founding Greentown member; Spyce, which created a robotic kitchen; and 3D printing firm Voxel8.
Reichert says some of the most active areas in cleantech lately are electric mobility and transportation technologies, microgrid products, and energy storage, which is receiving big investments from large corporations, as well as state governments like Massachusetts, New York, and California.
As for federal policy, Reichert says the Trump administration’s stance on climate change hasn’t had as much of an impact on the cleantech sector as she expected.
“The day that Trump was elected, we had people crying in the building” at Greentown, she says. “We had a whole bunch of debriefs on, ‘What does this mean? How will this change things?’ When he pulled [the U.S.] out of the Paris [climate] agreement, we had another round of, ‘what does this mean?’”
At this point, Reichert says renewable energy investments make enough economic sense that businesses are going to keep investing in them, regardless of federal energy policy.
“When you have market forces—when you have Wall Street underwriting massive developments of wind and solar—the train has left the station,” Reichert says.