ARPA-E Spurring Innovation and Funding

Xconomy reported that 1366 Technologies Wrapped Up $5.2M
1366 Technologies, a Lexington, MA-based company developing more efficient photovoltaic panels, has raised a $5.2 million Series B round from North Bridge Venture Partners and Polaris Venture Partners, says company president Frank van Mierlo. An SEC filing puts the total offering amount for the round at $6.2 million, but van Mierlo says the round closed at $5.2 million, with $5 million coming from the venture firms and the remainder coming from investments by 1366 management. He says investors were spurred by funding 1366 received from the U.S. Department of Energy Advanced Projects Research Agency – Energy (ARPA-E) program, which looks to fund innovations in energy efficiency.

While that is great for 1366, what is more exciting for MA as a whole is that the ARPA-E grants are spurring follow-on funding. Often it is said that government initiatives are not compatible with promoting innovation, in part due to the conservative and slow nature of government spending, as compared to the quicker, riskier VC-funding. Since the recession hit, it seems that bit of a role reversal has happened. What is great for MA is that of the ARPA-E grants awarded in October ‘09, MA captured 22% of the total money. If this trend continues, there will be continued investment in the MA clean energy space and may make it the center for the country’s cleantech innovation. Keep your eye on this trend.