conduit ventures: observations on investing in fuel cells daniel carter 26 th february 2004...
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Conduit Ventures:
Observations on Investing in Fuel Cells
Daniel Carter26th February 2004
Financing the Hydrogen Revolution, London
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► Conduit Ventures: Overview
► Our Portfolio Companies, and Why We Invested in Them
► Observations on Valuation and Fuel Cell Commercialisation
► Conclusions
Overview
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► Europe’s first specialist venture fund focused on fuel cell and related hydrogen technologies
► Only focussed fund w/investment in North America AND Europe
► Initial cornerstone investors in the Partnership:
► Focused on achieving financial returns for the Partnership
► Broad deal flow stemming from network and market positioning. >125 opportunities identified: 3 investments so far
Conduit Ventures
A Unique Venture Fund
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Our Portfolio Companies and Why We Invested in Them
Company and
Location
Value Proposition
InvestmentRationale
Vancouver CambridgeBoston
Micro fuel cell stack developer based on patent-pending “flow-through” technology
Potential to shrink the size of portable fuel cells whilst making them more robust and reduce cost
Small-scale fuel cell power systems developer based on patent-pending technology
Low cost stack manu-facturing techniques adopted from high-tech filtration cassette production
Industrial efficiency-driven applications: forklifts, airport tugs, etc.
Strength of management, customer relationships, technology
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Market timing is critical
Source: TD Securities, 2004
Valuation Environment
Bubble
Revaluation
Low Point Recovery?
ConduitInvestments
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Valuation Environment
Date Company Amount Transaction
14/11: Plug Power (PLUG) $59 million Follow-on
14/11: Medis $13 million Follow-on
3/2: Hydrogenics (HYGS) $60 million Follow-on
3/2: CalPERS / CalSTRS $1.5 billion To invest in Clean Tech
10/2: Xantrex $53 million Files for IPO
12/2: Stuart Energy (HHO) $16 million Follow-on
17/2: FuelCell Energy (FCEL) $100 million Files shelf equity/debt
18/2: Millenium Cell (MCEL) $6 million Private placement
Increased public market activity indicates momentum…
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Timing is critical
Valuation Environment
Residential CHP
Val
uatio
n -
Uni
t S
ales
Time
Micro fuel cells
Backup & Standby
Remote Stationary
Automotive
2000 2003 2006 >2010
Conduit investment
► Valuation stabilising as realistic market introduction approaches
► Sea-change expected with product launch
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► Supporting our portfolio companies for value creation and product introduction
► Taking advantage of market opportunity and seeking the right opportunities
► Working with the sector to promote awareness
► Catalysing investment by providing industry expertise to generalist investors, enabling investment in the right companies
Summary: What is Conduit Doing?
