CANTON TOWNSHIP – Four of the world’s leading renewable energy
venture capital firms are partnering for the first time with co-investments to bring to market new technology that will make wind turbines more efficient, reliable and affordable by investing $13.2 million in Danotek Motion Technologies of Canton.
GE Energy Financial Services, CMEA Capital, Khosla Ventures and Energy Capital
Management will invest in Danotek, a company that develops and manufactures advanced generators and components to supply wind energy to the power grid. The company also produces motors, drives, pumps and other accessories for electric and hybrid vehicles.
The investment enables Danotek, based in Canton, MI, to expand research and development, install utility-scale Mega Watt load testing equipment, hire and train workers and launch production of a projected 4,000 permanent magnet generators annually.
“We are gearing up to support the rapid growth of the global wind market,” said Dan Gizaw, President and CEO of Danotek. “Wind turbine manufacturers and wind farm developers are significantly expanding operations worldwide, particularly in Europe, China and the United States. We design and manufacture advanced permanent magnet generators and power conditioning systems that enable those business ventures to dramatically improve energy efficiency, cut costs and increase revenue.”
Danotek’s permanent magnet generator is leading a technological leap forward for the wind power industry. The PMG’s competitive advantages over conventional generators include:
Feed energy from the wind-to-the-grid more easily and efficiently.
More reliable and less costly to operate and maintain because PMG?s contain no wearand-tear parts.
Compact and lightweight design simplifies wind turbine construction and lowers material costs.
Produces power at low and varying wind speeds returning higher overall performance.
Overall, PMG technology enables wind farm owners to harvest an average of 15 percent more energy, providing approximately $1 million in additional revenue over the life of the turbine.
“Danotek’s permanent magnet technology is bringing cost savings and efficiency gains to several high growth markets, including wind turbines and electric and hybrid vehicles,” said Faysal Sohail, Managing Director of Energy and Materials and Information Technology at CMEA.
“CMEA Capital has been an investor in this company since day one because we recognized the wide applicability of its breakthrough technology. We are excited about the incredibly strong investment syndicate we have been able to put together to fund this expansion of Danotek and help fuel the green economy.”
This latest round of venture capital brings the total private funding invested in Danotek to $21 million. The cash infusion comes as clean and renewable energy remains a high priority for governments, companies and communities around the world. Many financial experts who track the trend predict that 2010 will be a record year for investment in clean and ?green? technologies, products and services.
“Danotek is an attractive investment with a strong value proposition to the fast growing wind industry,” said Richard Erskine, Partner and CEO of Energy Capital Management. “The company has the potential to become a leading service and technology provider to both the land and the offshore wind industry and enable operators to further reduce the cost of electricity.”
GE Energy Financial Services, CMEA Capital, Khosla Ventures and Energy Capital
Management, which manages the venture portfolio of Statoil ASA, each have positioned themselves on the cutting edge of renewable energy. This latest investment in Danotek is the first time the four firms have formally established a mutual interest in a single company.
GE Energy, Statoil and CMEA together invested $7.25 in November 2008 to support Danotek?s startup. Now joined by Khosla Ventures, the investment team is committing an additional $13.2 million to move Danotek into production. The investment from Khosla Ventures is the first from its late-stage Ventures Expansion Fund.
“At Khosla Ventures we invest in great entrepreneurs determined to build companies with lasting significance,” said founder Vinod Khosla. “Danotek has innovated a key technology that promises to significantly enhance the economic proposition of wind energy. We are thrilled by the opportunity to help bring their advanced generators to the global market.”
“Permanent magnet generators continue to offer the opportunity for higher efficiency and better economics in wind turbines,” said Kevin Skillern, a Managing Director and head of venture capital at GE Energy Financial Services. “Joining with Khosla Ventures for the first time will help Danotek expand its presence in this growing market.”
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