Cleantech Investor

First published in Cleantech magazine, November/December 2009. Copyright Cleantech Investor 2009

We reported the appointment of Christian Reitberger as General Partner at Wellington in the last issue of Cleantech magazine. Since then we have had a chance to catch up with Reitberger and chat about his background and the Wellington approach to cleantech investment. Reitberger is a rare example of a cleantech venture investor with two high profile exits to his credit. As a Partner in the Tech & Telecom group at Apax Partners, where he spent nine years, he oversaw the investments and exits for solar company Q-Cells and wind turbine gear box manufacturer, Hansen Transmissions. Q-Cells was listed on the Frankfurt Stock Exchange, netting a return of €280 million for Apax over 22 months. Hansen Transmissions, which has subsequently been listed on the London Stock Exchange, was sold by Apax to Suzlon Energy in 2006 for €465 million.

Reitberger says the decision to invest in Q-Cells was taken when it appeared to be a semiconductor play. Q-Cells had the insight to ramp up production quickly at a time when large solar manufacturers such as Sharp were reluctant to invest. Q-Cells also moved strategically into IP – and the transformation and growth of the company coincided with excellent timing for an IPO in the sector. “Q-Cells proved that serious money can be made from the sector, it proved the category”, Reitberger reflects.

Reitberger, who joins Bart Markus at Wellington, says cleantech is now entering a “phase 2.0”. He argues that many cleantech industries are now in adolescence – with solar having reached early adulthood. Although the growing pains are over, solar now faces all the issues which a commodity industry must contend with, including competition from China. “It remains to be seen now whether the European and US players can survive”, he comments.

Wellington is still invested in solar manufacturers, including Heliatek, a Dresden University spin-out company which is involved in third generation organic photovoltaics. Today, however, Reitberger considers that it is too late to invest in device manufacturers. “In solar, the value has moved away from upstream/manufacturing activities into downstream, distribution and financing activities”. He considers the role of the venture investor in solar today as funding the differentiators. “The investment opportunities will be in add-ons”, he notes, pointing to the example of Wellington portfolio company Enecsys, which has developed micro inverters – super reliable and relatively cheap inverter technology which can be integrated into individual solar panels and used without a high voltage licence. Cambridge University spin-out Enecsys received $10 million in funding in June 2009 in a round led by Wellington Partners.

The emphasis at Wellington is on four sub sectors where the team considers it can add value: solar, ‘wet’ or marine renewables (the firm is an investor in Cornwall-based wave company Orecon), energy storage and biomass.

In the biomass space, Reitberger is enthusiastic about the prospects for Agnion, a biomass gasification specialist. Wellington invested in Agnion alongside Kleiner Perkins and Munich Venture Partners in June 2009. Agnion’s Heatpipe Reformer produces synthetic natural gas (SNG) as well as combined heat and power or hydrogen from wood biomass at distributed plants.

In energy storage, Reitberger points to EnStorage, a company with a system for power grid load levelling and for solar and wind generation plants. Reitberger describes EnStorage, an Israeli company, as an “heroic” investment, referring to the fact that it is an early stage, pre revenue company. But he points out that Wellington had identified the challenge of grid level stability as an attractive investment area and comments that the firm can bring value to EnStorage through its top down analysis of market opportunities in this space.

Commenting on the challenge of his new role, Reitberger modestly notes that cleantech is more complex than semiconductors. “The semiconductor industry has a relatively clear structure, whereas cleantech is complex with lots of sub sectors”. But at just 41, Reitberger already ranks as a cleantech veteran. His experience in ramping up businesses such as Q-Cells, as well as his years in the semiconductor industry, look set to stand him in good stead at Wellington. As the cleantech industry matures and Wellington portfolio companies emerge from the technology development stage to enter the production phase, we can expect Reitberger to play an important role.